4

A hard lesson for taxpayers

The number of students defaulting on their loans is rising


 
A hard lesson for taxpayers

Sean Kilpatrick/CP

A good gauge of a country’s economy is whether university graduates are repaying their student loans. In Canada, there are disturbing signs that the number of students defaulting on their loans is rising. This week, Human Resources and Skills Development Canada, which administers the Canada Student Loans program, said it was writing off more than 44,000 student loans that were in default, totalling $231 million. That represents loans the government has been trying to collect on for more than six years, after which it is barred from going after student loan debtors under the Canada Student Financial Assistance Act. The default amount has more than doubled since 2010, when the government wrote off $89 million in student debt. In total, $540 million worth of student loans has been written off over the last three years.

Ottawa contends the figures represent a fraction of the $3 billion in loans handed out to 400,000 students each year and that 87 per cent of recipients make their payments. But for the Canadian Federation of Students, a rising default rate is a sign students are having to dig deeper into debt to get an education, even as the economy shuts many grads out of the workforce. The youth unemployment rate is twice that of the rest of the country. And since those who default not only stick taxpayers with their bills, but also destroy their credit scores, it can become a drag on the economy. Says CFS deputy chair Jessica McCormick: “When a graduate can’t buy a house or purchase a car or start a family that makes it very difficult to contribute meaningfully to the economy.”


 
Filed under:

A hard lesson for taxpayers

  1. So… after the EI enforcers clean house on the pogey fraud, are they going to begin knocking on the doors of delinquent student loan holders?
    Still it kicks up the debate over whether we want universities to broaden perspective minds or to train the future work force.

    • Gee peimac. I thought that those two objectives weren’t mutually exclusive. But more to the point that you raised. Suppose you loaned a student posting on Craigslist some money out of your own pocket based entirely on the promise that they’d pay it back. I wonder just how many times that you’d have to knock on their door to get it back?

  2. Why doesn’t the government assist students in choosing careers? Me and my sis just met a girl studying for early childhood education working at WInners, which will likely be an over-saturated field given that there’s 4 other girls we know in that field and that there’s not that many babies in Canada as there used to be, and that given that due to their poverty, 65-year-olds and up in this fields wont ever be retiring.

    Honestly, most unemployment occurs because of misinformation, and the fact that it takes a minimum 3 years from a person making a choice of career to get professionally designated to work in said career. If we’re trying to build a more flexible, dynamic economy, then let’s minimize the amount of time a person has to spend in school before joining the workforce. Most people learn more in the first 3 months of their job than they do in the first year of schooling anyways.

  3. fat chance that I’ll ever pay them 30 grand for 1 month at the academy of learning.hey forgave 1/6th of the loans they can forgive mine, and I’ll be more than happy to claim indigent I take them to court for it so they can explain their arbitrary selection process for their forgiveness.

Sign in to comment.