Social Work 2510 Assignment
“The Problems of Student Debt”

It would be nice if a person could finish high school and having decided to further their education by attending a post-secondary school without having to worry about a student loan debt. Sadly, this is only a dream for most of the young adults about to enter the post-secondary world.  Fortunately there are people out there who have parents that have the financial stability to support their children who attend institutions such as Memorial University of Newfoundland or College of the North Atlantic without acquiring a student loan. Many potential students, however, must rely on student loans in order to achieve a higher education.  
One of the major problems with obtaining a student loan is when the students application has been reviewed they find out that they cannot receive the full loan that they are probably entitled to because the government feels that the parents income is sufficient enough. What the government must realize is that there are families across the country that cannot afford to support themselves as well as support their child who is attending a school which costs a few thousand dollars per semester. Also there are some families out there that have a couple of children that are attending or about to enter post-secondary school. So the question that arises is how are they supposed to support themselves and their children? Yet when child reaches the age of twenty-two they are considered a mature student. Thus the income of their parents does not affect their loan in anyway at all. 
One of the most important issues a person must consider when applying for a loan is that after having spent five to ten years in school then they have to pay that loan back. Most people who have major loans basically live from paycheck to paycheck until they gets their student loans paid off. In recent years the government has finally realized how hard this is on a person and have incorporated ways in which paying off the debt is easier and more manageable. This paper will be looking at many issues such as historical background of the student loan program in Canada, some of the values of the student loan program through its students, if there are any possible alternatives to these programs and feasibility, and the recommendations that can be made to the student loan program.
	Most people do not realize that the Canadian Student Loan Program has been around since 1964. It was put into place for students who could not afford to pay the high costs that are required for attending a post-secondary institution. So the federal government put in a program that would give students the opportunity to pursue a degree at a university or a diploma at a private or community college. The way that the program worked was,
Between 1964 and 1995, loans were provided by financial institutions to post-secondary students who were approved to receive financial assistance. The financial institutions also administered the loan repayment process. In return, the Government of Canada guaranteed each Canada Student Loan that was issued, by reimbursing the financial institution the full amount of loans that went into default
(Government of Canada, Human Resource Skills Development Canada. Oct. 2003. Retrieved from April 2005. <http://www.hrsdc.gc.ca/asp/gateway.asp?hr=en/hip/cslp/
About/01_ab_MissionPprogram.shtml&hs=cxp).  	         
In 1995 the government decided to change that program so that the institution would assume responsibility for any risk of defaulted loans. Then after only five years the government decided that they would end the risk- shared agreements with the schools and the CSLP was soon become responsible for the National Student Loan Service Center. According to The Government of Canada’s website,
The Government of Canada now directly finances all new loans issued on or after August 1, 2000. The administration of Canada Student Loans has become the responsibility of the National Student Loans Service Center (NSLSC). There are two divisions of the NSLSC, one to manage loans for students attending public institutions and the other to administer loans for students attending private institutions”
(Government of Canada, Human Resource Skills Development Canada. Oct. 2003. Retrieved from April 2005. http://www.hrsdc.gc.ca/asp/gateway.asp?hr=en/hip/cslp/
About/01_ab_MissionPprogram.shtml&hs=cxp).  
As a student a person has many things to worry about while attending school such as; getting good grades, living away from their parents, having enough money to pay rent, buy groceries as well as buy books. Students have enough trouble dealing with the stress that professors put on them that they should not have to deal with the stress that Student Aid puts on them. When applying for a student loan the money a person receives is based on what amount of money that their parents have made in the past year according to tax records. But what the tax records do not show is all of the bills and needs that the parents have themselves such as mortgages, utility bills, other children attending school, car payments, etc. Once again this not only put stress on the student but also puts stress on the parents. Most parents what to do what they can for their children to make sure they are able to get the best possible education that they can get so the parents will makes sacrifices just to ensure their child gets an education. 
 There are students who are speaking up against this though. Throughout Canada students are rallying to get student loans base on the student’s income and leave the parents income out of the situation all together.  One such push is in Calgary where an Alberta student’s organization is asking the government to disregard family wealth when calculating student loans.
	Students have to put parental income on loan applications. Parents are supposed 	to contribute a certain amount and the loan is meant to supplement it. The head of 	the Alberta College and Technical Institute Student Executive Council says some 	parents aren't paying. If parents aren't helping that's where students are getting 	into the poverty levels and they're barely making it through, says David Brooks, 	ACTISEC's provincial director
(CBC. Nov. 2001 Students want loans disconnected from parental finances. Retrieved March 2005. Retrieved from http://calgary.cbc.ca/regional/servlet/View?filename=studloanca011128).
Most students try very hard to be independent by getting summer jobs to make some extra money to go back to school. Yet the amount of money that a student makes over the summer at minimum wage is not very much. Take for an example a student who works on a federal grant for the summer. Usually these grants are around twenty to thirty hours a week for up to eight weeks. So before taxes and other expenses are taken out the student will have only cleared $1920.00. Tuition for one semester at Memorial University is $1500.00 and it is the lowest tuition rate in Atlantic Canada. The there must be taken into effect that the student has to buy books, pay rent, and bills for the rest of that semester. One must also stop to realize that the more a student a makes during the summer is also taken off the loan. So they are not left with much in the end.
Being over the age of twenty-two in the province of Newfoundland and Labrador puts a student at a big advantage. A person is considered a mature student by this time and does not have to depend on their parent’s income as much. The Student Financial Services Division of Newfoundland defines a Mature student as, “students who are 22 years of age or older and are applying for student loans for the first time” (Canada – Newfoundland and Labrador. Integrated Student Loans Program. 2004/2005 Application form and Information Guide.2004 pg.2). Being a mature student takes a bit of stress off the student and the parents because they do not have to worry about having to put themselves at a financial risk from having to give their children money to attend school.	Students are the next generation that will be the doctors, nurses, lawyers, social workers and so on in society, so why put them in a situation where they may not be able to attend school? They should be given all the advantages they need so they will want pursue a career without having to worry about where the next loan payment is coming from. Right now in the province of Newfoundland there is an out cry of doctors, nurses, etc, if something is not done soon it means that there will be many out-port communities that will have to go with out a doctor and that will have to travel far distances to seek medical attention. The reason for the lack of doctors and nurses is the problem with student loan debt and the fact that many people do not want to spend the next few years of their life having to pay it back after they have finished school.
	Even if the government does try to change the student loan program again, they need to make sure that the loan program is equal to all students regardless of age and parental income. There have been many supporters of the idea that tuition should be free such as it was in the 1960’s in Newfoundland and Labrador. The Government of 
Newfoundland and Labrador are major leaders when it comes to listening to students when they speak out about tuition. The Government of Newfoundland and Labrador has made offerings to post-secondary students with regards to extra relief on their tuition debt. 
	 Even though the parents of many students may have a good income it should not affect the child to the point when he/she will have to make the decision to go to school or not. The student loan programs should realize is that they are the ones that are making a higher education impossible for many because of the years the students will have to spend paying back multiple loans and the fact that many will not be able to receive the full amount that they need. The government over the last couple of years has been very good when it comes to tuition because since 2000 tuition has been lowered and frozen. The Honorable Mr. Hedderson, Minister of Education with the Conservative Government in Newfoundland and Labrador, announced this year that they will be keeping the tuition for Memorial University, College of the North Atlantic, and The Marine Institute frozen for the remainder of the Williams government term. As Premier Danny Williams has said,
In the Blueprint, we made a commitment to our post-secondary students and today we have reaffirmed that commitment. We must ensure that Newfoundlanders and Labradorians have access to high quality programming at an affordable cost to enhance the employment prospects of graduates and ensure that we are able to get the greatest benefit from our economic opportunities. In today’s global community, education is vital for success and our government is committed to accessibility and affordability, so that our students have the tools they require to be the leaders of tomorrow.
(Government Of Newfoundland & Labrador. New Release. 2005.Retreived March 20.2005 from http://www.releases.gov.nl.ca/releases/2005/exec/0315n03.htm)
Hence one can see that the government is in a way trying to help make a post-secondary education possible. They have also put in place programs to help students who have major loan debt so that the full amount of the loan will not have to be paid back. One of these programs is the Canada Study Grants (CSG's), which is a program that, unlike interest free loans, does not have to be repaid. Another program that has been implemented by the Government of Canada is the Canada Millennium Bursaries program which,
Is an organization established by an Act of Parliament in 1998 with an endowment of $2.5 billion to help Canadians meet the challenges of a rapidly changing economy and society by creating opportunities for them to pursue their post-secondary education.
(Millennium Scholarships. 2004. Retrieved April 2 2005 from http://www.millenniumscholarships.ca/en/main.html).
There is also the Debt Reduction Grants, which was replaced by the loan remission in August of 2001 where if you receive up to the full amount of the provincial student loan it may be converted into a non-repayable grant. The only problem with this approach is,
There is no application process – students will be contacted directly; debt education grants are earned on a semester basis, and students will be notified annually, and; special provisions to accommodate students who have extenuating circumstances.
(Government Of Newfoundland & Labrador. Education/Grants. 2004. Retrieved March 25 2005 from   http://www.edu.gov.nf.ca/studentaid/grants.htm#dependents).
One of the things that turn possible students away from financial aid is that when they have finished their program of study within 6 months they must start the repayment process of their loan. With the high amount of interest that is tacked on to the minimum payment, monthly payments of about $300.00 are close to impossible. So,
If you cannot afford your monthly payment amount, or you don’t qualify for Interest Relief, you may be able to revise the term of your loan. In this program you can decrease you monthly amount, either for a short term or long term period. This may mean you extend your term over a longer period, meaning you will pay 	back you loan over a longer time, but this may be just what you need so you can afford to start paying back you debt. The sooner you start, sooner you’ll be done. 	And remember if in the future you can afford to pay more each month, there are not penalties for increasing your payments again to start to pay it off faster.
 		(A Guide to Borrowing Student Loans In Canada. EDULINX. 1999.pg12). 
What people have to realize is that it is very hard for students to get a student loan and be willing to stay in Newfoundland to work. With a minimum wage of $6.00, one does not make enough to support themselves and pay off a student loan debt of tens of thousand s of dollars. “Repayment problems are becoming more severe as students have greater difficulty finding employment and total amounts of indebtedness rise” (Armitage A.2003.Social Welfare in Canada: Forth Edition. Don Mills, Ont. Oxford University Press Pg 78). The average student will have a debt of no less then fifty thousand dollars at a minimum when they have finished university. In order to pay this back many would have to take on another full time job.
 Most people go places such as Baffin Island where they can go and work for two years and then come home. Many of these people make enough money up north that they have their student loans just about paid off and that’s in two years. If they decided to stay in Newfoundland then it would take about twelve years. So governments should realize that if students are willing to get the money to go to school, willing to study hard then in turn they should be able to stay in their own province and not have to worry about making enough to survive through another month. It is not all that much to ask for seeing as students are our future. The government, while having already implemented many programs in which student loan debt is relieved somewhat for people, needs to do more in the way of making access to the full amount of a loan more possible for everybody. By combining this while making employment opportunities more available to those entering the workforce from post-secondary, our province will be booming in the economy in a couple of years. This would help to stop the brain drain that is slowly becoming an epidemic in the province of Newfoundland and Labrador. In the words of Premier Danny Williams (2005) “We will soon become a have province and not a have not province ”.  

Resources 

Government of Canada, Human Resource Skills Development Canada. Oct. 2003.                   Retrieved from April 2005. <http://www.hrsdc.gc.ca/asp/gateway.asp?hr=en/hip/cslp/
About/01_ab_MissionPprogram.shtml&hs=cxp

CBC. Nov. 2001 Students want loans disconnected from parental finances. Retrieved March 2005 from http://calgary.cbc.ca/regional/servlet/View
?filename=studloanca011128

Canada – Newfoundland and Labrador. Integrated Student Loans Program. 2004/2005 Application form and Information Guide.2004 pg.2

Government Of Newfoundland & Labrador. New Release. 2005.Retreived March       20.2005 from http://www.releases.gov.nl.ca/releases/
2005/exec/0315n03.htm

Millennium Scholarships. 2004. Retrieved April 2 2005 from tttp://www.millenniumscholarships.ca/en/main.htm

Government Of Newfoundland & Labrador. Education/Grants. 2004. Retrieved March 25 2005 from   http://www.edu.gov.nf.ca/studentaid/grants.htm#dependents

A Guide to Borrowing Student Loans In Canada. EDULINX. (1999) Pg. 12

Armitage A.2003.Social Welfare in Canada: Forth Edition. Don Mills, Ont. Oxford  University Press. Pg 78

Danny Williams, Premier of Newfoundland And Labrador, Atlantic Accord Signing, St. John’s NL, Feb. 14, April 14, 2005.