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Feds to work with provinces on student loans

Some details released about $31 mil modernization to student loans, but plans still vague


 

The Canada Student Loans Program is undergoing a modernization process that could make it easier for student borrowers to manage their loans, but it depends on the willingness of the federal and provincial governments to cooperate on the file.

Student advocates across the country welcomed last week’s announcement by human resources minister Monte Solberg that the federal government would work with the Council of Ministers of Education, Canada (CMEC) to modernize the student-loan repayment process.

Currently, there exist both federal and provincial loan programs for student aid. For several years, student groups in Canada have called for changes to the loans-repayment process, which they see as overly complicated. Borrowers are often confused about who they are paying and even where to direct their questions.

“It’s certainly an encouraging step. It’s still rather vague,” Julian Benedict, the executive director of the Vancouver-based Coalition for Student Loan Fairness, said of Solberg’s announcement. “Our concern is most of the improvements are still administrative. There has been nothing done to reduce high levels of interest on student loans or create a viable ombudsperson office.”

In Budget 2008, the federal government announced a number of initiatives directed towards students. Grabbing the largest headlines was the phase-out of the Canada Millennium Scholarship Foundation — which currently distributes federal bursaries and scholarships — after the coming academic year. The Foundation will be replaced by a four-year, $1.6-billion Canada Student Grant Program that will combine existing federal grants programs and be administered by the Canada Student Loan Program.

Among other measures was a four-year, $31-million commitment to student-loan reform. On May 21, Solberg made public a federal-provincial working group that will, in the end, create an online portal for repayment and management of loans and streamline application and communication processes for borrowers.

Human Resources and Social Development Canada spokesman Jason Bouzanis spoke to the merits of what the government is calling a new Service Delivery Vision for student-loan assistance. “The ideal vision for the online portal would see students benefiting from online services that will enable them to view in one place up-to-date information on their federal and/or provincial or territorial loans,” he wrote in an e-mail. “This change will provide a single point of access to important information such as loan status and balance, making it easier for students to manage their loan.”

Student-loan assistance programs in Canada are “cumbersome, time-consuming, and paper-based,” according to a press release issued on the day of the announcement. If all goes according to plan, borrowers will not have to deal with both federal and provincial (or territorial) programs and it will simply be much easier to understand where they are in the repayment process.

Benedict has called for more substantive changes to student loan assistance, and he continued to urge both levels of government to look at more than tinkering. “The administrative improvements are great, but it’s got to come with other things that just reduce the cost of borrowing,” he said.

The Canadian Federation of Students’ Ian Boyko applauded the potential of the federal-provincial partnership. “Until we’re at a point where there is one, single loan process for all students, there needs to be as much collaboration as possible between the federal government and the provincial governments,” he said.

Boyko added that governments tend to support this kind of initiative because it is a low-cost, high-return investment. “It’s one of these areas where you can probably help a lot of people, you can probably get some good press, and it’s not going to cost a lot of money.”

The Canadian Alliance of Student Associations also came out in favour of what national director Zach Churchill called “an encouraging development for students across Canada.”

“This is something that students have been asking for,” said Churchill. “It was a very complicated, problematic system that was causing huge frustration amongst students. … It’s actually quite exciting to see the government move forward with this.”

One potential roadblock to a successful federal-provincial partnership that is common during such negotiations is the issue of jurisdiction. Education is constitutionally mandated as the realm of the provinces, and they have historically been wary of any federal interference in the administration of provincial student-aid programs.

“We know that a lot of provinces are leery about working with the federal government on integrated loan programs, because they’re afraid they’re going to lose autonomy in how they spend their money,” said Benedict. “That’s one of the key issues: how much flexibility the program will give the provinces to target funding as they wish.”

Student-aid programs in each province are not carbon copies of the same program. An agreement on service delivery that all provinces agree upon may not be very easy.

“These processes tend to be very slow, and each province has a different student body they are concerned with,” said Benedict.

Federal NDP leader Jack Layton was cautiously optimistic about the merits of the partnership. “I hope something comes of it. Unfortunately, sometimes the different levels play off one another, and before you know it, time has passed and the money that was promised never found its way to where it was supposed to go,” he said. “With this modest initiative, let’s hope they get their act together fairly quickly.”

Bouzanis said that the reform initiatives “would commence in 2009–10 and continue to move forward progressively for the next four years.”

CMEC communications coordinator Tamara Davis said that the timeframe for negotiation between governments was actually much smaller. “Everything has to be figured out by the end of the Millennium Scholarship (Program),” she said. “(The federal government) announced that they were going to be taking the money (from Millennium) and just giving it back to the provinces.”


 
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Feds to work with provinces on student loans

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