Student groups sour on loan repayment plan

 

The education minister, Pierre Reid, announced a new student loan repayment plan on Jan. 12 aimed at giving relief to graduates when their income is low.

Graduates with an annual income of less than $25,621 will have all or part of their interest costs covered by the government.

Single parents with higher incomes could benefit, depending on their number of children. Students who don’t graduate could also take advantage of it. Anyone who has not paid off their loan within 10 years can apply to have their debt forgiven.

Roger Côté, Executive Director of Enrolment and Student Services, calls the plan “income-sensitive” rather than “income-contingent,” because the repayments would be scaled down only for those whose incomes are below the threshold, whereas students with higher incomes will not be asked to pay a higher marginal rate.

“This program is for borrowers who are experiencing financial hardship. It’s a very positive step,” Côté said.

When he made the announcement, Reid, a former university president, said the program would protect the credit ratings of graduates and make their life easier. Their creditors, in this case, are not the universities, but the banks.

Student groups say they don’t think much of Reid’s announcement, because it doesn’t compensate for the cuts of $103 million in bursary programs last fall.

The Concordia Student Union is urging students to take part in a province-wide campaign that started Jan. 17 to call selected members of the National Assembly 10 times every day for five weeks.

“The idea is to increase pressure on the Quebec Liberal party from the inside,” explained CSU VP communications Melissa Gruber.

“We started the campaign against the $103-million cut to the bursary program last semester in conjunction with other student associations across the province. Telephoning Liberal MNAs was effective because there is a lot of dissent within the party to the cut.

“Since the Liberals have not yet responded in a clear fashion to student concerns, the campaign will heat up this semester. The CSU has been delegated 20 MNAs and the goal is to call them 10 times every day for five weeks.”

A fact sheet provided to the participating students says the average debt load for an undergraduate degree has increased from $14,000 to $21,500. Whereas a student used to receive about $2,400 in loans and $2,600 in grants, the same student now receives $4,700 in loans and only $300 in grants.

The FEUQ (Fédération des étudiants/es universitaires du Québec) says Quebec has money from the federal government that has not yet been budgeted, i.e. $30 million from improvements to the Canada Student Loan program and $73 million in extra equalization payments for the next provincial budget. They are calling for this money to be reinvested in student financial aid.

On Nov. 10, 10,000 students took to the streets across Quebec to oppose the cut, and the CSU plans more protests this term.

The youth wing of the government’s own Quebec Liberal Party also denounced the government for replacing bursaries with loans, and is urging the government to reinvest in student aid.

The program, which is likely to benefit 15 per cent of Quebecers with student loans, or about 60,000 students, will cost $22 million a year starting next fall. By 2015, it will cost $60 million.

The CSU’s Gruber concluded, “Student debt is rising across the province because of the government's cut, and there would be no interest to pay if there were no debt to begin with. Student debt can only be improved by directly addressing the problem and reinvesting the $103 million that was cut.”

Tim McSorley, a recent Concordia student who is now chair of the Quebec wing of the Canadian Federation of Students, said, “What we need is upfront bursaries for low-income students, not more loans. Debt is debt, no matter how much relief you provide.”

Asked if he saw it as a precursor to the thawing of the tuition freeze, McSorley said, “If history holds true, that will be the next step. We have seen it in Australia and Britain, and closer to home in Ontario and B.C. In Ontario and B.C, bursaries have also been completely eliminated; students can only take out loans.”

In its brief to the university last year, Concordia proposed lifting the tuition freeze to help cash-strapped universities. It favoured a model adopted by Britain and Australia whereby tuition is increased and the government pays the student’s tuition. The student repays the government through the tax system when his or her income rises to a certain level.