It wasn’t much. But it helped. I got a student loan of $500 in 1966 to help get me through my two-year journalism program at Centennial College in Toronto.
I know. Five hundred dollars! My tuition fee was, I believe, something like $270 a year. So that $500 basically covered the tuition. I was living at home with my mother, who was recently widowed and working hard to make ends meet. I’d been working and saving a bit and had a good summer job, too.
But I was grateful for the loan arranged through CIBC and the Canada Student Loans Program, which had been launched in 1964 and was just beginning to have an impact on the ability of more students to get access to post-secondary education.
Today, more than $30-billion has been lent to 4.2 million individuals through the program, seemingly a huge success in helping generations of students to finance higher educations that in turn help Canada’s economy and competitive position in the world.
That might be the reality for many people like myself who took the money and repaid it promptly over a couple of years. For some others, however, Canada Student Loans are “predatory” and charge a usurious interest rate. Moreover, many students and their parents are questioning the value of going into debt to get undergraduate degrees that seem not to be worth the paper they’re printed on.
The student loan issue boiled over in the National Post and elsewhere this week, triggering a furious debate about the “bankrupting” of a generation of students who have gone into an average debt of $27,000 only to find the good jobs required to pay off their loans very hard to find. (A similar discussion is under way in the United States, where undergraduate tuition can be US$40,000 a year and where the jobs situation is far more dire.)
Indeed, the student loans “debate” has widened to encompass the very worth of post-secondary education, mirroring the distemper of a time in which a sluggish economy and an evolving labour market do not automatically bestow good jobs on university graduates as they did in my day. One bitter, debt-loaded grad complained in these pages that families at the lower ranges of the economic scale were especially victimized by the loan program, that they were given false expectations of what the loans might deliver their children.
Meantime, the personal bankruptcy rules governing those who took out student loans were being criticized as grossly unfair, especially in light of an annual interest rate that is a full five points above prime. (The rationale for such a high interest rate is the level of loan defaults and the fact that banks and other lenders are not willing to make loans to risky student borrowers at anything approaching going rates.)
It may be that the student-loan debate has struck a chord among those whose lives are not living up to expectations. Those people want to know why and will be looking for institutions and other people for answers and, yes, to apportion blame.
And yet at a time of big budget deficits and a general antipathy toward how government operates, all programs are under scrutiny. Why not the Canada Student Loans Program?
The first question: Should Ottawa and the provinces be in the business of providing student loans? Some people – and not just those who think government should be out of all businesses – might say a program launched almost half a century ago to help Baby Boomers finance a higher education is not as relevant today, that there must be a better, more efficient way than getting government involved and the taxpayer on the hook.
They might point to the total of $150-million in unrecoverable debt from the program and the fact that the program is growing by $1.2-million a day – about 12% of which will likely never be repaid.
What’s more, governments might be doing some students a big favour by not encouraging them to get into debt to secure degrees and diplomas that qualify students to be little more than baristas and wait staff. You want fries with that English BA?
But one study estimates that 70% of all the 1.7 million jobs created in Canada in the decade to 2015 will be in positions expected to require post-secondary qualifications. So you can’t even get an interview if you haven’t got a degree, a diploma or a certificate of some kind.
Then, by all means let’s examine the student-loan program to see if it can be made more efficient, more effective and fairer to borrowers and lenders (taxpayers) alike.
A bigger task for government, industry, the education establishment and student groups themselves is to take a hard look at post-secondary education in Canada. It’s an expensive proposition for taxpayers and students, and getting dearer by the year. Average yearly undergraduate fees are on the rise – up 14% in the past five years to $5,138 – and government financing is growing apace.
Does just about everyone have to have some sort of post-secondary education? And if society reckons they do, what’s the best way to get real value for students and taxpayers?
The debate over student loans is timely. The debate over the future of post-secondary education in Canada is one that also needs to be joined. Now.
Financial Post
whanley@nationalpost.com
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