1964: A federal student loan program is introduced.
1969: Council of Ministers of Education approves, in principal, an ICLRP along with increased tuition fees.
1984: An Ontario government commission supports ICLRPs along with increased tuition fees.
1993: The Council of Ontario Universities proposes an ICLRP along with a tuition fee increase of 50 per cent.
Jan. 25, 1995: The Canadian Federation of Students organizes one of the largest national student demonstrations in Canada's history against the federal government's proposed income-contingent repayment program and massive cuts to education funding.
May 2, 1995: The federal government announces that ICLRPs are off the table.
June-Nov. 1995: The Tory government is elected in Ontario, cuts over $400 million from colleges and universities, and announces substantial tuition fee increases to be accompanied by an ICLRP by fall of 1998.
1997: The federal budget announces that ICLRPs are again being considered by the ministry of finance which has cut $2.9-billion from post-secondary education since the Liberals came to power in 1993
by Rachel Furey
Ontario Bureau Chief
TORONTO (CUP) -- Higher tuition fees and higher debt loads are in store for students if the federal government proceeds with controversial reforms to student aid, says Canada's largest national student organization.|
Compromising Access, a research document released Wednesday by the Canadian Federation of Students, calls on the federal government to reject income contingent loan repayment (ICLRP) schemes and implement a national system of grants for students in need.
The federal government is considering an array of proposals for reforming student aid, and a number of these including a joint-initiative with the Ontario government -- include an income-contingent repayment option. This option links the repayment of a student loan to a graduate's income.
But this kind of scheme puts the burden of funding post-secondary education more and more on students and less and less on public funds, according to the document.
"An income-contingent repayment scheme is not a progressive form of student loan repayment, it's a regressive form of funding [for post-secondary education]," Brad Lavigne, the federation's national chairperson, said.
Lavigne admits the student aid system needs reform, but he says the focus should be on easing debt, not prolonging it. "We need recognition that the problem with student debts is in their size, not in their repayment mechanism."
The average debt load currently stands at $17,000 for Canadian students, and could rise as high as $25,000 by next year. The federal government has cut $2.29-billion in funding from post-secondary education since it came to power in 1993
The joint-initiative being developed by the federal government with the Ontario government could see students paying back their loans for a 25-year period with no access to interest relief.
But many other provincial governments have already said they won't implement income-related repayment schemes. British Columbia
| Education Minister Paul Ramsey joined the federation in denouncing the plan at its press conference releasing the document.|
"The current proposal at the federal level has nothing to do with reducing debt, it only defers debt and may even increase it," Ramsey said.
Under one of the models being considered by the federal government, a student graduating with a $31,000 debt would end up paying over $80,000 in interest.
"The issue we need to address is that debt is too high, debts are never going to be repaid," Ramsey added. "The student bankruptcy rates [are] a symptom of this problem."
Since 1993 student bankruptcies have almost tripled, rising to 12,000 last year from 4,500.
"This is an urgent issue, it can't wait for the Millennium and it can't be dealt with by simply extending the period of loan repayment," he said.
Ramsey says his government will continue to lobby the federal government for a national system of grants to help ease student debt. "[We have to] keep our eye on the goal, which is bring student debt down."
While many provinces, including Nova Scotia, Saskatchewan and Manitoba oppose the income-contingent repayment option, Ontario's Conservative government plans to implement it next September.
"The main reason [we want this scheme] is to assist students and make repayments more manageable,"
Brian Wolfe a spokesperson for Ontario's ministry of education, said.
"What's important is access [to education]. We're trying to provide that opportunity."
Since its election in 1995, the Tories have cut over $400 million from the budgets of colleges and universities and has allowed tuition fees to increase by an average of 30 per cent.
Lavigne says Ontario's tuition fee hikes are directly linked to the province's pro income-contingent repayment stance because such a loan system makes it easier to put the cost of education onto the backs of students.
"The reason [Ontario] hasn't completely deregulated [tuition fees] yet is because they're waiting to implement ICLRPs first," Lavigne said.|
Australia saw tuition fees rise by 584 per cent from previous years when an income-contingent plan was introduced and in New Zealand, the loan scheme was accompanied by the introduction of up-front user fees.
The federation document also addresses the added problems that ICLRPs pose for women and members of minority groups because they generally earn less upon graduation.
Under one federal government model, 43 per cent of women would not be capable of paying off their debt after 25 years of repayment.
Ramsey says the issue is quickly becoming a priority for provincial education ministers. "It's a good sign. The issue is on the national stage. Eighteen months ago it wasn't a national issue, now it is."
Ramsey is meeting with Pierre Pettigrew, federal minister of human resources development Canada this week. And the federation is currently continuing its federal and provincial lobbying efforts leading up to the federal government's meeting with stakeholders, including the banks, in late November.
In Saskatchewan, the government hasn't made a formal statement regarding ICLRPs, although Post-Secondary Minister Joanne Crofford has said she is hesitant about moving to an income-related program.
Crofford, who is currently on a cabinet retreat, has said that student debt reduction is an important issue for her, but she is unsure if ICLRPs would be the best way to deal with the issue.
Shaun Brennan, Chairperson of CFS-Saskatchewan, said, "We (CFS Sask) expect that Minister Crofford will not only concur with Minister Ramsey's comments, but also make a similar pubic comment."