Students call on government to change federal loan program

Students call on government to change federal loan program

Canada’s student loan program is again about to hit its funding limit and, without any change, threatens to bankrupt a generation before they land their first job, the Canadian Federation of Students warned Monday. File photo.

Photograph by: Getty Images. Postmedia News

OTTAWA — Canada’s student loan program is again about to hit its funding limit and, without any change, threatens to bankrupt a generation before they land their first job, the Canadian Federation of Students warned Monday.

The Canada Student Loans Program is projected to surpass its legislated loan limit of $15 billion in January 2013, which it has done once before in 2010 — the first time in the program’s history.

As more students are expected to access the fund for loans, the CFS is asking the government not to increase the program’s funding limit.

Simply raising the limit does not solve the issue,said CFS president Roxanne Dubois, and only increases the amount of students graduating with debt.

This country is effectively bankrupting a generation before they even get to their first job interview, Dubois said at a news conference in Ottawa, standing alongside a digital counter showing the total student debt in Canada.

The CFS says the government should provide grants to provinces to reduce tuition fees in lieu of tax credits to students and convert some student loans to non-repayable grants. Dubois said the system could act in the same way that the federal government provides provinces with health-care funding.

The idea is to give students the money they need when they need it most and not continue to burden them with debt, she said.

The money would go much further if it was delivered to students in the form of grants, Dubois said.

Under questioning in the House of Commons on Monday, the minister in charge of the loan program wouldn’t say if any changes to the scheme are being pondered. Human Resources Minister Diane Finley said the government has helped more students go to school through the introduction of a grants program and by making scholarships and bursaries tax exempt.

We are concerned about making sure students do have access to post-secondary education, she said.

A spokeswoman said the government has the regulatory tools to revise the debt ceiling if it is reached.

Setting the portfolio limit with regulation, as opposed to legislation, provides greater flexibility so that we can effectively ensure students have full access to student loans, now and into the future, Alyson Queen wrote in an email.

We highly encourage the CFS to review their facts more closely and help Canadian students take advantage of the many, accessible programs available to them as they pursue their post-secondary education.

The Canada Student Loans Program provides up to $210 per week of study to eligible students. Since its inception in 1964, about $32 billion in loans has been handed out to some 4.3 million students.

More students have accessed the fund in recent years as the cost of a university education — specifically tuition fees — rises faster than the rate of inflation. An audit of the loan program released two weeks ago found that tuition fees have risen by about three per cent above inflation for the last 10 years.

The audit for Human Resources and Skills Development Canada found that tuition costs about $6,300, while students usually have about $4,365 to spend. On average, a student will graduate with $25,000 in debt, Dubois said.

Students are more and more reliant on student financial assistance, in the forms of loans and grants, to pay their tuition bills, Dubois said. The reality is that students are not getting by.

HRSDC’s Actuarial Report on the Canada Student Loans Program says the worldwide economic crisis has put a renewed pressure on the program. More students have gone back to school and, without a job, more students have turned to the federal loan program to fund their education.

The financial review projected an increase in student loans issued to 581,000 by 2035, up from 405,000 last year, which will cost the government almost $800 million per year.

The rise in the number of students accessing loans comes despite projections that the number of full-time students will decline to just over one million from about 1.2 million. More youths are expected to enter the labour force as jobs open up as a result of the expected mass retirements of baby boomers.

Although the expected labour force shortage will cause a decrease in the number of students enrolled full-time in a post-secondary institution over the projection period, the increasing student need will increase the number of students receiving a CSLP loan, the report says.

jpress@postmedia.com

Twitter.com/jordan_press

Students call on government to change federal loan program

Canada’s student loan program is again about to hit its funding limit and, without any change, threatens to bankrupt a generation before they land their first job, the Canadian Federation of Students warned Monday. File photo.

Photograph by: Getty Images. Postmedia News

OTTAWA — Canada’s student loan program is again about to hit its funding limit and, without any change, threatens to bankrupt a generation before they land their first job, the Canadian Federation of Students warned Monday.

The Canada Student Loans Program is projected to surpass its legislated loan limit of $15 billion in January 2013, which it has done once before in 2010 — the first time in the program’s history.

As more students are expected to access the fund for loans, the CFS is asking the government not to increase the program’s funding limit.

Simply raising the limit does not solve the issue,said CFS president Roxanne Dubois, and only increases the amount of students graduating with debt.

This country is effectively bankrupting a generation before they even get to their first job interview, Dubois said at a news conference in Ottawa, standing alongside a digital counter showing the total student debt in Canada.

The CFS says the government should provide grants to provinces to reduce tuition fees in lieu of tax credits to students and convert some student loans to non-repayable grants. Dubois said the system could act in the same way that the federal government provides provinces with health-care funding.

Students call on government to change federal loan program

The idea is to give students the money they need when they need it most and not continue to burden them with debt, she said.

The money would go much further if it was delivered to students in the form of grants, Dubois said.

Under questioning in the House of Commons on Monday, the minister in charge of the loan program wouldn’t say if any changes to the scheme are being pondered. Human Resources Minister Diane Finley said the government has helped more students go to school through the introduction of a grants program and by making scholarships and bursaries tax exempt.

We are concerned about making sure students do have access to post-secondary education, she said.

A spokeswoman said the government has the regulatory tools to revise the debt ceiling if it is reached.

Setting the portfolio limit with regulation, as opposed to legislation, provides greater flexibility so that we can effectively ensure students have full access to student loans, now and into the future, Alyson Queen wrote in an email.

We highly encourage the CFS to review their facts more closely and help Canadian students take advantage of the many, accessible programs available to them as they pursue their post-secondary education.

The Canada Student Loans Program provides up to $210 per week of study to eligible students. Since its inception in 1964, about $32 billion in loans has been handed out to some 4.3 million students.

More students have accessed the fund in recent years as the cost of a university education — specifically tuition fees — rises faster than the rate of inflation. An audit of the loan program released two weeks ago found that tuition fees have risen by about three per cent above inflation for the last 10 years.

The audit for Human Resources and Skills Development Canada found that tuition costs about $6,300, while students usually have about $4,365 to spend. On average, a student will graduate with $25,000 in debt, Dubois said.

Students are more and more reliant on student financial assistance, in the forms of loans and grants, to pay their tuition bills, Dubois said. The reality is that students are not getting by.

HRSDC’s Actuarial Report on the Canada Student Loans Program says the worldwide economic crisis has put a renewed pressure on the program. More students have gone back to school and, without a job, more students have turned to the federal loan program to fund their education.

The financial review projected an increase in student loans issued to 581,000 by 2035, up from 405,000 last year, which will cost the government almost $800 million per year.

The rise in the number of students accessing loans comes despite projections that the number of full-time students will decline to just over one million from about 1.2 million. More youths are expected to enter the labour force as jobs open up as a result of the expected mass retirements of baby boomers.

Although the expected labour force shortage will cause a decrease in the number of students enrolled full-time in a post-secondary institution over the projection period, the increasing student need will increase the number of students receiving a CSLP loan, the report says.

jpress@postmedia.com

Twitter.com/jordan_press


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