Canadian students anxious over tuition fees and high interest loan repayments will soon have a little more breathing room, if the NDP has its way.
Last week, Denise Savoie, Victoria MP and NDP post-secondary education critic, set forth a campaign she plans to bring to campuses across Canada. The NDP’s Fix Student Aid petition calls for the federal government to reform Canada’s current federal Student Aid program.
The petition calls for measures such as lowering the interest rates of federal student loans, and the creation of a needs-based grants system. The petition also proposes an increase in the number of available study grants and suggests the instatement of a Federal Student Loan Ombudsperson to investigate and resolve complaints by student loan borrowers.
“If we look at the loans, it’s nothing but high interest rates,” explained Savoie during a phone interview. “Where countries like Australia have 2.4 per cent, Canada’s students pay 8.5 per cent as a minimum on their student loans. New Zealand and Germany—no interest rates. Even in the USA, which Harper likes to model Canada’s policies on, students pay 3.3 per cent.”
Savoie intends to increase the amount of needs-based grants for student borrowers. Her 2007 proposal suggests giving $1,500 to every student in need of a loan for every year of their study. The plan proposes phasing out the money set aside by the government for tax credits, and instead using that money to create a needs-based grant system for students.
“If you look at Ontario and B.C., the average debt load is $25,000, which is a large debt for someone who is just graduating,” says Savoie. “It’s really an unfair position to put them in at the time they’re just starting their career. If we expect them to be in a position to contribute to society and compete in this economy, we have to do so without burdening them with these astronomical levels of debt.”
Jen Hassum, Chairperson of the Canadian Federation of Students, and former SAC president, levelled similar criticisms.
“All the time, students are complaining about the amount of inflation they have to pay, how they wish tuition fees are lower, how they wish they could have needs-based grants,” said Hassum. “We get those kinds of sentiments all time from e-mails and letters and from students on the streets.”
Savoie added that a great deal of government resources go to recovering defaulted loans. “So instead of putting all that energy in, I’m saying let’s fix it, because there’s an obvious problem.”
According to a 2007 Auditor General’s report, the Canada Student Loans Program distributes an approximate $1.9 billion every year to postsecondary students. The total value of the Federal Student Loan Portfolio is reported at $11 billion.
“It’s quite a big chunk of our economy,” said Savoie.
Overdue and defaulted loans are estimated to add up to over $800 million, which is recovered from student borrowers by 12 different collection agencies and the Canada Revenue Agency.
“I’m hearing and have had first-hand experience with collection agencies that insult student borrowers, bully them, and harass them. They act like pit bulls, whose only incentive is to recover and collect,” says Savoie. “We have to have, and I’m calling for, legislative collection standards.”
According to Canada’s Coalition for Student Loan Fairness, a non-profit, non-governmental organization that keeps track of the needs of Canada’s student loan borrowers, the most common complaint from borrowers is being “unduly threatened or harassed at their places of work or at home” by collection agencies.
