Updated December/ 2008.
For information purposes only. This page is not legal advice.
New for March '04: "specified educational institution" means an institution of learning, whether within or outside a province, that offers courses at a post-secondary school level and that is designated by the lieutenant governor in council of that province, either particularly or as a member of a class, as a specified educational institution within the meaning of this Act.
I have a nagging fear certain government certs like SmartServe might also be included.
This web site is for students, by a student. Unlike the government sites, I have no vested interest in:
-enticing you to take schooling that you do not need, unlike educational institutions
-encouraging you to take out loans through my bank so I can profit on the interest
making you pay back a debt that you most patently cannot afford to.
Here are a few hyperlinks to key sites:
-this shows the 1990's student debt situation - http://www.aucc.ca/en/briefs/renewing.htm#Student
-the predicted effect of retiring boomers on education funding - http://www.gordonfn.org/ccsd.htm
-arguments for freezing tuition levels - http://www.cfs.bc.ca/research.htm
-ethical guideline for collection agencies (they HAVE to) - http://www.ccsottawa.com/
-an explanation for high student loan default rates - http://www.hrdc-drhc.gc.ca/common/news/hrib/00-19.shtml
-a portrait of typical student indebtedness - http://www.hrdc-drhc.gc.ca/hrib/learnlit/cslp/profil/pt4.shtml
-a senate review of the crisis in education - http://www.parl.gc.ca/36/1/parlbus/commbus/senate/com-e/post-e/rep-e/repfinaldec97part1-e.htm
-the damage caused by the 10 year rule of student bankruptcy -http://ursu.uregina.ca/~carillon/sep25.97/features/index.html
-student default rates with explanations - http://www.ontla.on.ca/hansard/37_parl/session1/committees/accounts/P012_1.htm
-an argument refuting the value of an education at today's costs -http://www.gov.ns.ca/staw/studentb.htm
-a UW student paper article on the chilling effect of tuition hikes - http://imprint.uwaterloo.ca/issues/112798/1News/news08.shtml
The scoop on those rumours that there is a way out before the ten year wait-
http://www.mun.ca/muse/archive/Volume50/Issue01/news/bankrupt.html
Most recently, rural student have been choosing vocational instead of academic training, due to costs (see G&M).
Though public subsidy of liberal arts has fallen from c. 2/3 to c. 3/5, this amounts to a subsidy of the wealthy since the loan terms are so harsh that nobody considers them a way to go through school anymore. And rightly so. Ergo, I advocate an end to tuition subsidies - you pay the whole thing - BUT with very generous grant systems. Closer to the US system. Ours only worked until we let tuition spiral out of control. This way, funding acts as a 'other-end' progressive tax system - progressive fiscal policy.
Now that you are politically sensitized, I'm gonna outline your choices.
FUTURE STUDENTS
Law of 72 - 72 divide by interest rate (annual) = # years for investment to double.
Rule of 40 - 40 divide by MER (service fee of banks per year) equals # years for their fee to erode 1/3 of your principal investment.
PRE-TEENS - PARENTS READ HERE
This is best. At c. 6% interest return, if you save half as much for 18 years, rather than twice as much for the last 9 years, the investment yields 1 1/2x as much! Start early! When born - immediately. Even if just $100 per year.
TEENS - PARENTS READ HERE
Better than nothing. Early teens (13-15). The important thing here is to invest $100 for at least 4 years prior to age 16 in RESPs, or a lump of $2000 in any one year prior to 16. This qualifies you to get the CESG grant!!! Then you can catch up and failed max match grant years prior to that.
Bias alert: I just qualified to sell RESPs. I work for a non-profit foundation. I truly believe mine has the best product for young children - but dare to compare - check them out! You cannot trust anybody - in case I'm a bugger - with an agenda - do your homework!
E-mail me for a blow-by-blow comparison! I am not a salesman - more like an advertiser. I merely inform you - then let you decide. Yes, I'm that confident in my foundation! Send people you know with newborns here!
TEEN 16-17
Looks like you're either on your own, or your folks will not be able to help using special student scholarships. Oh well. If they don't support you through school, just remember that when they get old enough to retire...
If you are a high school student or in the work force, then you stand to benefit the most from what advice I can give you. First of all, you should consider why you are going to school. If the subject you will take is a labour of love, then 'nuff said. The education is its own reward. In this case, the employability of the education matters less, but you should still consider debt load. If you are going to school to be wealthy and (as if it follows) successful, then you should consult the institutions you wish to go to. They have default rates for their programs, which gives an indication of how good job prospects are at the end of it all. Dirty college trick: show placement rates for grads, but hide the shocking dropout rates. Look CLOSELY- everyone has an agenda. You might consider fast tracking, or taking a short program. This minimizes the chance of the job prospects shifting as other people like you saturate the field, thus sating demand for workers. Also, what was hot yesterday may not be hot in a few years as industry changes. Seriously consider a practical education in the sense of apprenticing, co-op, and career-specific training.
My fave trick: U presidents talking about cohort studies. Boomers skew the results- as if that matters to X&Y gens going to school. They're screwing with you... plus, watch the 'employed' (but not in field) scam. Finally, they like the 'make more' (but not enough to offset debt) trick. They're all out to use you.
Consider moving out of the house. Being out of the house a few years (check the rules!) means your parents are not assumed to be supporting you. You can also get them to sign off before that. Watch the paper trail.
Beat the new Ontario credit check (a dumb idea - people with the least money need the loans the most) by applying prior to the minimum age -age 22). This means age 20 or 21 might be ideal. You're independent and still not getting the credit check. Consider working and saving while changing your dependency status. The new Ontario 'graduate at Grade 12' scheme favours you in this. You have more time to save, get out of the house, or beat the credit check. Of course, it also means you pay directly for Grade 13, in the form of minimum 4 year undergrad degrees (that's the trend).
One last thing. Consider you social life. If you lack a clear idea to the contrary, pick where and what you take based on BABE RATIO (or STUD RATIO, for the other sex). For example, right now psych ,environmental science and fine arts is mostly women. Especially at U-o-Guelph. It's nice to have a degree. It is also nice to date in school, and meet your future spouse. You do want to have fun too, don't you?
Consider not applying for loans at all. Get it from family or friends. Try private banks for standard loans instead. Consider working part-time in school. Or working full-time while going to school part-time. Consider applying to a local school so you can live at home to lower costs. I'm for residence first year, to meet a new set of people, regardless - if you have the coin. Consider making your savings and income say what you want on paper. Keep in mind that grants are almost unheard of now. Almost all of that money will have to be paid back. The rules for student loans are draconian in the extreme! You may have to resign yourself to being harried by ruthless collection agencies for TEN YEARS! If they find you, it might become a lifetime sentence if they take you to civil court! They'll be eligible for 20% of everything you earn FOREVER. I have had friends driven near murder & suicide by their student loans. Literally. If you are not sure how much you should borrow, consider the following advice - only borrow as much during schooling as you could pay back with a 'marginal wage' job at full-time hours. The rule of thumb is the debt should not exceed one year's wages. So to be safe, that is about, um, c. $16,000. Even this would have proved overly cheery for me...
IN SCHOOL NOW
The important thing here to know what the rules on part-time studies and income are. It may not make sense to work beyond a certain point when you consider the clawback rules, and the level of your marks.
I don't know a single person that didn't get hit by debt repayment during school due to paperwork errors. Nobody else cares, so you better make sure ALL forms are sent to the RIGHT people ON TIME. If you don't take this advice seriously, expect to pay hundreds of dollars back early and learn the hard way.
If you are a woman/disabled/etc. , you're eligible for c. $10,000 if you take one of many grad programs - check it out!
Check your school for the option of writing the exam without taking the course. Some let you. It's cheaper, but requires much more self-discipline and energy. Make sure you get all your prerequisites FIRST. It will bite you on the ass in your last year, if you don't. Many students end up in school five years, for a four year degree...
I'm personally against combined honours - doesn't let you take interest/useful pickups. Consider Independent Studies instead.
DONE SCHOOL
Oh, I am SO sorry. Most advice is not useful once you've finished school.
The best case scenario is that you got your dream job and you're knocking off your debt at a brisk pace. There are lots of tax breaks now for ex-students - use them.
A less cheery scenario is that you are having some difficulty paying back your loan. I think they can retract the debt forgiveness now, so make sure you do it right - you have to apply for it! Listen carefully to this next part - use up your extended interest relief as if your life depended on it! If you don't, then you're not eligible for debt reduction at the 5 year mark. You might screw yourself out of $10,000 in debt reduction if your debt is high compared to your income. God knows I did. Once your debt is in default, it's too late to use the options - so use them as soon as possible, and as soon as your qualify!
The worst scenario is the one that all too many of my bright and motivated friends are in. You cannot pay the debt. No amount of tax relief or interest relief is mattering. Strategies you can include the following.
Pay it anyway. Drive yourself into absolute poverty. Borrow from everyone to do it. Let your folks pay it. Maybe you consider it a matter of honour to pay your debt, even if you really aren't able to.
Pay some of it. Negotiate like a third world nation with an international bank. This is very important, as you'll see later. Attempt to mediate a settled amount that your ARE capable of paying. Pay just part of the total amount. We call this 'acting in good faith'. Check out HRDC income supplement programs if you are working some. Goto local credit counselling. Find out what collection agencies can and cannot do. Document everything!!! They aren't used to people who know their rights.
Don't pay it. Maybe you are just a jerk that never intended to - this is dumb with the new rules. Or maybe, like me, you have not been able to. Expect a lot of heat, if you choose this option. Collection agencies are mean as heck, and completely without scruples. Here are few things I know they do.
Call parents claiming to be old school chums, or posing as a government ministry. Don't expect the police or the ministry in charge of consumer affairs to do anything (they didn't) - too bad cuz this would have allowed said student out of said debt - if he could prove it.
Love notes from mysterious women - with agency phone numbers attached. Calls to any relatives. Terrorizing your mom into paying it for you, convinced your future is doomed if she doesn't.
Most commonly, a pattern of harassing phone calls that would be subject to stalking laws if done to anybody else. You cannot kick your student debt and they KNOW it. You cannot threaten them. They've got you. Caveat - check my hyperlinks of what they cannot do legally -not that I'm aware of that ever stopping them...
Words put into your mouth in court that you never said. Generally violent talk or claiming you are trying to screw the system and expect to get away with it. Trying to change the court venue to towns you cannot get to.
Claiming you have not been in contact, and they have been - did this to me! Too bad I keep all registered mail and money order receipts... haha.
Banks have been known to 'forget' you had some of the loan forgiven, or are finally paid up. STAY SHARP.
DON'T talk to them. DON'T have a last known address. DON'T pick up unknown purolator packages at the nearby post office- they're trying to prove you got it! This is not war in the conventional sense. You are totally outclassed by a corporate entity of professionals who do this for a living! Record any transactions you do have. Send a copy to yourself, using the mail stamp as proof of date. Have a tape recorder or camcorder for any conversations - refuse to speak without it. To be 'officially' admissible as evidence in court, they have to know they are being recorded. They've kept track of mail to the family home, to see when you will return to country. Use a post office drop box, or a pseudonym. This is guerilla war. You pick your fights, then flee at the first sign of major units approaching. Don't kid yourself - the entire legal system is against you. There isn't a person in the world looking out for you. Except me.
Think the gov't is on your side? Ha! A bud of mine tried to complain when the agency fraudulently misrepresented itself. Then called him at work - talked to his employer -which they CANNOT do. The police wouldn't touch it. The gov't branch which was misrepresented couldn't - the agency just claimed it was one guy only, and that they talked to him. The call was unlisted and couldn't be traced (first sign...). The Harris gov't branch to look into consumer affairs wouldn't touch it - the money is owed to the gov't!!! Moving on...
I'm here to provide guerilla leadership, a resistance of sorts for ex-students unable to pay back their student loans despite their best intentions. To throw off the yoke of oppression, I suppose.
Detection must be avoided. Have utilities in some other name, real or not. Unlisted phone number, or in another name. Don't update at Canada Post with mail forward. Consider no driver's licence, or not updating promptly. Tell your relatives and friends not to admit knowing you to anyone who contacts you. Change jobs once in a while or work without a paper trail - a credit counselor I know is convinced they illegally access government databases. Don't put your real name on any web site - anything that a good search engine might find. Don't do anything that would cause a credit check - a banker I deal with used to work with a collection agency. That means applying for a new SIN number, a credit card (get one near the end of school instead!), or applying to security-conscious jobs. I've had great luck simply confessing I owe dollops of money and offer to get a criminal background check if that's what they want to know. Wanna know if somebody is looking for you on the web? Check out the tracerlock service from peacefire. Obscure trick : register your van as your 'primary residence'. Have fun sending the subpoena to the doorstep!
You KNOW what they're gonna do. Anticipate and counter. They assume each ex-student they approach is completely naive about their rights, how to enforce their rights, and how to operate in court. Read on small claims and civil court! Play THEM instead. Sun Tzu -let them misunderstand the actual situation and surprise them.
If you cannot figure out how to protect yourself after reading this, then there is just no saving you.
Tell me about your experiences at [email protected] (which of course is NOT in my name!)For the record, I'm paying back as much as I can afford. Sadly, my debt size exceeds how much I've made since I got out of school 5 years ago. Strangely enough, the debt is a problem. A society can be judged by how it treats its weakest and most helpless citizens. I've judged mine - and found it wanting.
Want to sway public opinion? Read my hyperlinked articles. Form intelligent and persuasive arguments for naysayers. Change their minds - don't just get pissed off. There is no shame. Just misfortune. Study logic. Study debate. Study rhetoric. Study social psychology. You WIN when you change someone's mind. Enough of that, and public opinion could cease being 'fat, lazy, overeducated buggers wasting my money'. Just make sure they aren't in a position to turn you in! I write under a nom de plume for the local city's paper occasionally, on key issues.
Stay tuned for more generation X&Y (sub-Boomer, really) advocacy from ASSP - Advocating Sustainable Social Programs. ASSP as in snake. As in: don't tread on me.
Tell me the dirty tricks the agencies have tried on you and your friends! I'll list them for others to learn from!
NEW- March '02. Heard f/ few of you. Glad to be of help. A few updates:
- they will use any account they have ever accessed, even if that means your rent. Set up a new account if they have ever accessed the old one.
-the province negotiates. the feds do not.
- i checked at KPMG - cannot declare bankruptcy twice to get out of it - rumour - shields you for only 9 weeks and then your butt is theirs
- child bonus may be immune.
2008: well sonofagun. Here I waited for the 10 years to pass. (11 now). Then a new rule says you only hafta be out SEVEN years! &*^^(*)(_(_)&^%^%^(
http://www.student-loan-bankruptcy.ca/
Student Loans After a Consumer Proposal - The Lenders Are Getting Aggressive
Over the last two weeks I have had a higher than usual number of people coming into my office who finished their consumer proposal in 2008, and now they are getting phone calls from collection agents for their student loans.
Under the old rules, if their student loan was less than 10 years old at the time they filed their consumer proposal (7 years under the new rules), the student loan was not automatically discharged in the consumer proposal (or bankruptcy). The lenders don't go after you while the proposal is running (they can't), but as soon as it's finished, they resume their collection activities.
These people had other debts, and since a bankruptcy would not have discharged their student loans, a consumer proposal made sense at the time; it allowed them to deal with their other debts, and "buy time". If their job situation has improved, they may now be able to deal with their student loans.
D: there was a suggestion going around that declaring bankruptcy prior to that was some sort of out. Nope.
E-Mail me with questions and feedback.
