As thousands of post-secondary students return to Canadian colleges and universities, the roughly 350,000 who rely on government loans surely have their burgeoning debt-load on their minds.
A recent graduate survey found many students are completing their studies with numerous forms of debt, including government loans, credit cards, and student lines of credit.
In this week’s column, I’ll continue my discussion of student loans in Canada.
In listening to my constituents, the issues surrounding student loans are complex and numerous. Interest charges are only one part of the problem.
This country’s “patchwork” approach to financial aid has created a maze of rules and regulations that entangle students every year.
To this end, the Vancouver-based Coalition for Student Loan Fairness, launched in April of this year, has prepared a comprehensive report entitled an “Eight-Point Plan for Reform.”
The plan calls for a strategy for student loan management.
This reform addresses all levels of concern that constituents have discussed with me. Point #1 recommends the federal government significantly reduce or eliminate the interest rate on student loans.
With interest rates of 8.75-11.25 percent, borrowers end up paying interest of over 35 percent over the lifetime of the loan.
Point #2 calls for improved access to grants, interest relief, and debt reduction. This would include the promotion of the Interest Relief program to ensure all borrowers who need this help are aware of it.
Every constituent who has shared a story about navigating the student loan maze is supportive of Point #3, which calls for the creation of a student loan ombudsperson office.
This office would have the power to prescribe resolutions to service providers, including banks and credit reporting offices.
Points #4, #5, and #6 speak to creating efficiencies with the recording and payment of student loans. Graduates would be able to expect one integrated loan and one payment with real-time access to statements.
Business and consumer protection acts would be harmonized to create consistent service regardless of where the student lives.
Often bad things happen to good people through no fault of their own. Points #7 and #8 address some of those remedies, including the provision of hardship relief, as well as the reinstatement of the six-month interest-free grace period following graduation.
This Eight-Point plan presents a comprehensive strategy to remedy an unresponsive student loan system.
I encourage students to access the coalition’s website at www.studentloanfairness.ca to voice their concerns.