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The Student Loan Crush
How it got so heavy, and how to lighten it.
Fewer students, deeper debt.
This September, over a million Canadians will start or resume their post-secondary educations. We take this for granted now, but half a century ago it was rare for young people to seek education beyond grade 12 -- if that far.
The desire for more education was clearly there, however. Studies like the 1962 Macdonald Report motivated the B.C. government of Wacky Bennett to build a new university (Simon Fraser) and to found a community college system. Similar trends made post-secondary accessible -- and cheap -- across Canada.
To give you a sense of how costs have changed, when Capilano College opened in 1968, a year's tuition in academic courses cost $200 -- equivalent to $1,184 in today's dollars. In 1987, tuition was $1,048 in today's dollars. In 1995, it was $1,424. But fulltime enrolment at Cap College this year will cost you $3,120 -- double the cost just 10 years ago.
Even so, Cap College is a bargain. According to StatsCan, average tuition for B.C. undergraduate students in 2003-2004 was $4,519 (in 2007 dollars). It hasn't gone down since then.
Tuition fees this year make up 23.3 per cent of B.C. post-secondary revenues, up dramatically from 19 per cent in 2003. Another 15.7 per cent comes from "other sales of goods and services" like parking, food, and photocopying. Federal funding covers only about 8 per cent of those revenues, with about 48 per cent coming from Victoria.
In other words, students are paying close to a quarter of the costs of their post-secondary education. Some manage to work part-time, often hurting their grades in the process. Others try to make enough money during the summer to cover the next year's expenses.
Many just can't make ends meet.
A million students in debt
So they borrow. And borrow. At least 990,000 students and former students across Canada have had to borrow to finance their educations, according to Julian Benedict of the Coalition for Student Loan Fairness.
If you visit the website of the Canadian Federation of Students, you'll see a "Canada Student Loan Debt" clock that is now well over $12.5 billion.
Shamus Reid, the head of the CFS in B.C., says the clock covers only the indebtedness incurred through the federal Canada Student Loan program. To get a real sense of the debt, we should add 30 per cent for B.C. provincial loans, plus whatever students run up on their own credit cards.
Reid says that half of the B.C. class of 2007 graduated in debt -- an average of $27,000. That's a 28 per cent increase from 2001, when the average debt burden, in today's dollars, was $21,000.
How did students get into this mess? When rich kids and scholarship students were the only ones who went to post-secondary, the system was small. It focused on advancing the brightest and flunking the rest. Those who passed would run the country.
But Wacky Bennett's Socreds could see that the future depended on teaching the local kids instead of just importing experts educated somewhere else.
A cheap, small post-secondary
The parents of the baby boomers were demanding better opportunities for their kids. They were glad to pay higher taxes to help get their children into law or medicine or business management. And by today's standards, the new post-secondary system was really cheap.
But it was also inadequate. B.C. had almost no post-secondary infrastructure: few instructors and staff, tiny libraries, and no suitable buildings. Cap College spent its first six years at West Van Secondary and various church basements. VCC started at the old King Edward High School at 12th and Oak, in classrooms with desks on rails.
Under the Dave Barrett NDP government in the early 1970s, however, the college system expanded rapidly across the province. The universities grew as well. Thousands of teaching, administrative and staff jobs opened up. A whole generation of MA's and PhD's soon took those jobs. Another generation of students flooded in. Post-secondary now had a lot of stakeholders.
Employers could pick and choose their employees from a much more qualified pool. Those without post-secondary were up the creek, and knew it -- especially when the recession hit in 1980. Young people and adults alike came back to school to improve their qualifications for the few jobs remaining. Women began to enroll in increasing numbers to help support themselves and their families. They're now a majority of both students and graduates.
Putting warm bodies in seats
Post-secondaries, meanwhile, came to depend on more students to support more programs. The whole system needed not just rich kids and smart kids, but every possible warm body.
Those bodies have been available. Virtually all students now understand that without post-secondary education, their career opportunities are limited. So they have been willing to borrow the money it takes to get them a diploma, certificate, or degree that they can take into the job market.
Colleges and universities are eager to sell them whatever program they want because the alternative is staff and faculty layoffs.
Governments since the 1960s have changed, however. Rather than go to their taxpayers, they have increasingly passed the cost of post-secondary on to the students and their families. And they have charged what the market will bear.
By now, the market will bear almost anything. When the Liberals took power in 2001, they jacked up tuition fees. We faculty were astounded to see students enroll in ever greater numbers ... at least until the last few years.
The market isn't bearing it any more, even with six different federal and provincial loan programs. And that bodes ill for everyone.
A bid for loan reform
Julian Benedict, who runs the Coalition for Student Loan Fairness from a Vancouver office, is trying to improve the situation. He and another former student, Mark O'Meara, founded CSLF last April. Among other resources, the organization's website offers news, horror stories from borrowers, and copies of the CSLF's correspondence with the Canada Student Loans Program.
Benedict is especially unhappy with the fact that Canada Student Loans is essentially funded by borrowers themselves, thanks to the high interest rates charged. The program also spends millions trying to collect from borrowers who have defaulted on their loans -- and it's easy to default since payments now kick in as soon as the borrower leaves school.
CSLF offers an eight-point plan for reform, including lower interest rates and a single-loan system. Since a significant number of borrowers run into bureaucratic hassles, CSLF wants an ombudsperson who can help resolve those problems.
"Borrowers aren't asking for a free ride," Benedict says. "We are asking for a fair lending rate and responsive customer service."
Low-income students giving up
Everyone agrees that post-secondary education means higher lifetime earnings. But the up-front costs of loan repayment can be a burden to graduates and a deterrent to students who don't want to get into debt. That, in turn, threatens a system with thousands of employees and a major impact on local and provincial economies.
StatsCan reports that in programs with rapidly rising tuition fees, students from low-income families have simply stopped enrolling. Education, long seen as a means of social mobility, is instead becoming a means of maintaining social stratification.
Most European countries charge very little tuition, and Sweden charges nothing at all. Such countries see the value in a highly educated population and workforce, so everyone invests in educating the next generation.
Here in North America we still see education as a benefit to the student, not the society. So we expect the individual to pay a substantial portion of post-secondary costs.
Until we change our minds about that, college and university will go on being unequally accessible.
- How BC Libs Aim to Reinvent Higher Ed
'Campus 2020' report promises upheaval without progress. - Dumpster Diving to Afford UBC
Why must some UBC international students work illegal jobs and sift garbage for food? Answer: To afford tuition many times higher than paid by their richer Canadian fellow students. Some ask: Is this an ethical way to run a global university? - Who Speaks to Student Voters?
Party platforms range from elaborate theses to nearly blank slates.
![[Tyee]](http://thetyee.cachefly.net/ui/img/ico_fishie.png){kind=small}
- The Gem of Canadian Science that Harper Killed
- Who Mowed Down the Premier?
- Canada's Economy, Deconstructed (by a 12 year-old)
- Death in Remand: a Tyee Inquiry
- Now Is the Time to Talk up Big Ideas
- Sexism Tinges Criticism of Teachers' Job Action
- Bill C-38: the Environmental Destruction Act
- Death In Remand: 'A Gut Feeling'
- Bias in BC's Pesticide Decision? Follow the Bouncing Verbs
- The Ethics of Addiction Studies
- The Gem of Canadian Science that Harper Killed
- Sexism Tinges Criticism of Teachers' Job Action
- Now Is the Time to Talk up Big Ideas
- The Ethics of Addiction Studies
- Bill C-38: the Environmental Destruction Act
- Alberta Fills Pipes with Corrosive Denial
- Bias in BC's Pesticide Decision? Follow the Bouncing Verbs
- How Our Immune Systems Exaggerate Fear
- BC biotech company seeks approval for GM apple
- What's Behind BC's Doors?
- The Ethics of Addiction Studies
- What's Behind BC's Doors?
- The Gem of Canadian Science that Harper Killed
- Sexism Tinges Criticism of Teachers' Job Action
- Should You Run from that Medical Test?
- 'The Dictator'
- Death in Remand: Stacked Deck
- 'Moonrise Kingdom'
- From Financial Advisor to Occupier
- Seven Goals to Build the Conservative 'Dream'
37
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jrb
4 years ago
it's not just BC
why frame the article to make it seem like it's a problem particular to BC?
it's pretty much the same set of phenomena across the country.
what's your agenda?
Davey-boy
4 years ago
We are truly unusual
Only two countries expect students to pay so much for their post-secondary education: Canada and the U.S.
In countries that offer higher subsidies from government, the right wingers argue, the taxpayers are forced to fund an education that benefits mostly the student. Unfair they say.
But they are wrong. In a society with a truly progressive tax system, the student inevitably pays that money back.
So really what we have are two systems that charge tuition to the student, but the European system collects it later while the North American model nails us up front. I'd prefer the declining service charge option, thank you.
ubiquitous
4 years ago
jrb...
It was never suggested in this article that this is a unique problem to BC. I think that BC is used as an example because of the context of this website; that is, it reports on British Columbia. Can you not comment on the actual content of the article or do you have an agenda of your own?
Anyway, the student loan system is bad enough, but worse yet is the litany of student credit cards and the way they prey on unsuspecting students during the first couple of weeks of classes. I think that post-secondary institutions have an obligation to almost warn new students about the dangers of credit cards - perhaps a free personal finance class? The fact that universities and colleges do not take any responsibility and freely allow credit card companies access to campus resources makes me wonder what the institutions get out of it.
avandoc
4 years ago
education etc
While the government has a surplus, students accrue debt, the social housing deficit rises, and our health care infrastructure grows more inadequate. According to some politicians, saying down government debt is more important than investing in human capital such as education and health. It shows what happens when money becomes a and is not seen as a means to improve our collective lot.
In the US, the fastest growing segment of higher education is for-profit, e.g. The "University" of Phoenix, with its business-park "campuses." Is that what the BC Liberals are hoping for here?
It's good to see some student activism going on around this issue.
Working Man
4 years ago
Hmmmm
"Those without post-secondary were up the creek, and knew it -- especially when the recession hit in 1980"
Unfortunately, many still do not. Look at the auto workers in Ontario losing their jobs. Many are in their 40s and have limited education. They are going to take serious cuts in wages if they do not retrain.
On this site, I constantly see complaints about "low wages" and "wage slavery." The reason is exactly as the author has stated in the above quote. There will be a terrible shock when the building boom cycle slows down unskilled workers get laid off en mass.
About tution fees, in the last year of my Bachelor's degree, I paid $1700 but the student loan I took out was a 17% interest, making my generation much worse off. Added to that the Milennium Scholarship fund did not exist.
Even in the 1980s, I always believed that student loans and grants should be tied to GPA; the higher the grades, the higher the grant. Low grades and you are out. There were always lots of space wasters in uni when I was there and I imagine it has changed little since.
dorothy
4 years ago
Message to Canada
..from the silly green rabbit:
If you think education is expensive -
You ought to try ignorance!
jwstewart
4 years ago
Quote:Students are paying
I'm not sure students are being overcharged. 25-cents on the dollar is a pretty good discount.
Some account has to be given to the benefits the student receives from the education, society as a whole does nenefit, but not exclusively.
Also, some consideration has to be taken for students who migrate, depriving the province that funded their education of any benefits.
Stump
4 years ago
equality for all
I love how a couple of corrupt union bosses are motivation enough for the Ayn Rand-wannabes to get rid of organized labour.
Ever considered applying that logic to corporations, ceos, and capitalists?
Stump
4 years ago
oops. wrong thread
oops. wrong thread
skeptikool
4 years ago
Am I too cynical?
For good or bad, I missed the post-secondary education experience coming, as I did, from a large, blue-collar family in a war-torn England and, of necessity, having to leave school at the age of 14 years.
In the current discussion, one can not overlook the role that greed is playing, That, I believe, is a valuable lesson in what Capitalism is about - that, from cradle to tomb, we exist to be milked.
Many will leave these higher learning institutes at which the seeds to a lifetime addiction to borrowing will have been sown. Thus providing another lesson, that slavery is not dead - though my most, probably, unrecognized, or admitted to, as such.
dorothy
4 years ago
there is only thisone problem with that...
"Even in the 1980s, I always believed that student loans and grants should be tied to GPA; the higher the grades, the higher the grant. Low grades and you are out. There were always lots of space wasters in uni when I was there and I imagine it has changed little since."
So, if you have a family that can back you up in the cash department, you'r OK for trying six times? I've seen it happen. Do you find that Kosher, given that there is this 75% discount?
alive
4 years ago
W Man explain please
And following your argument, if everybody had a better education, then McDonald would pay their slaves $90.000 a year, right?
NOT
There will always be a need for simple manual labour, and there will always be people who for whatever reason need to accept those jobs!
Can you explain why those people should automatically live in poverty?
bob the cat
4 years ago
skeptikool
Too cynical?
Not in my opinion
" When you speak, you cast a spell"
Hopi Shaman
" Mother....I`m mad"
Friedrich Nietzsche
GJW
4 years ago
CFS still useless
I'm glad to see the Canadian Federation of Students doing something useful instead of just staging useless protests. Oh wait, I'm wrong -- it's the CSLF. Oh well, at least someone is doing something. The system is a terrible joke and desperately needs reform, but the system is still needed. Because as the article points out, many people will still need student loans to get into post-secondary education, even though the system is still heavily subsidized by tax dollars, something the CFS seems to forget.
But the system is broken and needs review and restructuring.
I recently paid off $32,000 in student loans. Under half was paid off in bank account-gouging minimum payments for five years that left us some days with not enough grocery money. When I realized I was paying 8.5 per cent interest, which the CIBC Canada Student Loan and the federal government's student loan program had quietly ramped up on me without any notice, I nearly had a cow. Screw that, I said, and when we sold our house for a tidy profit and bought a new house, I paid out the remainder of the loan. That should not have ever happened, and I realize I did better than many students who struggle with debt for 10 years or more from four years of education.
What happened to the interest-free loan programs? They should be brought back. You can't tell me that all the interest the government collects on loans goes to fund the program. Bunk. That money goes into "general revenue" and magically disappears. The federal government should be called on its greed and be pressured to change the program. Interest-free loans – on which the student cannot default or claim bankruptcy – should be standard. Students need to pay for their education, but the way they're getting ripped off is disgusting. Good on the CSLF for pursuing this.
Stump
4 years ago
unskilled labour
All people should get a living wage. I agree with you on that point.
However, more and more jobs will be automated and roboticized. When was the last time you talked to a bank teller? Paid your electricity bill down at the B.C. Hydro office... while shopping downtown at the wide selection of local merchants?
What we've got now is not an improvement over what we had IMO. It may be more efficient, it may be more profitable, but it would be hard to argue that many of us are seeing the benefits beyond a few crumbs here and there.
When automation truly becomes the norm, we are going to have a lot of people with a lot of time on their hands. What happens next will definitely be interesting.
Stump
4 years ago
and another thing
That's why I mail a cheque for my bills rather than have automatic withdrawal. I WANT someone, not something, to have to deal with that envelope.
Adamwest
4 years ago
Let's make it all free so
Let's make it all free so more kids can spend four years at university on our dollar without knowing why the hell they're there in the first place. After all, when they get out with their handy fine arts degree they can always get a job as a barrista at their local Starbuck's, and by then Jimmy Sinclair will have convinced everyone that we need a $12/hour minimum wage. Maybe nice Carole can use that as the main plank in her socialist platform in 2009.
Stump
4 years ago
Our dollar?
Anyone who buys something from a store pays both GST and PST (in B.C.) Doesn't matter whether you're six or sixty, Let's not pretend education funding sits solely upon the shoulders of the full-time worker bee.
No doubt the self-righteous rage feels great, but get your facts right too.
harry
4 years ago
i know why i'm there.
i'm too lazy to look back to see who wrote about all those folks who don't know why they're there (at a post-secondary institution). why am i lazy? because i gotta get up for school in the morning. i'm also too lazy to use capital letters :) for the record, i only go to school a couple days a week, in order to keep my job....but i still need to take out a student loan to make ends meet.
i too, come from a working class family. i'm sure my dad would love to pay my tuition, but last spring he lost the mill job he had had since high school.
i went to high school here in bc. sometimes. i had good grades when i actually attended class. the reason why i didn't go to many of my classes is because they were so BORING. and the history and social studies classes were dishonest and feeble.
when i got out of high school, i went straight into the work force. i thought if college was as lame as high school, it wasn't for me. so i worked in factories for five years. even though i did really well at all of my production jobs (excelled, actually), i lost my patience for the poor quality products and workmanship that were in policy non-existent, but in practice expected (but only if you were good at hiding it...at least until the warranty was out). i also lost patience with the way i was expected to treat my crew which, in every company, was to extract as much work-value from them as possible, and never give in to demands like extra time off, or wider training. us folks on the floor were responsible for everything that went on the truck, and management made sure the general labourers knew their place and stayed there, while the ones being groomed (me) were allowed to get away nearly anything (like trashtalking the crew). and the suits stood around and told us to work harder, faster, better so they and the shareholders could make a buck.
so i'm going back to school. because i'm going to be self-employed. because i'm never going to work under conditions like that again. because i never want my children to work in a place like that.
Adamwest
4 years ago
What's your point Harry?
What's your point Harry?
murdock
4 years ago
harry...on the ratwheel
why do you need to go get an education to do that?
why do you want the debt to start your 'new' self-employed life with?
dr evil
4 years ago
point counterpoint
Harry got a "Besto" first crack batman. Guess some folks " see his point"
Great post Harry..hope you write more here
you`ll have to understand...though I`m sure you`ll pick up from the authoritarian tone that our adamwest as he calls himself is a bit of a guiding light here...he is very good at discerning "points"...it comes from his sharp business acumen and his strong work ethic...and of course a mind like a steel trap.
Remember adamwest..he was the actor who first portrayed.. batman.. none other than THE CAPED CRUSADER!
Well our adamwest is here to bring light to the lefties and socialists, bleeding hearts and every other tired cliche you can possibly imagine....to show `em what its really all about...sort of a J Bob Carter kind of guy.
jennymich
4 years ago
student loan debt
I'm paying off loans from a professional Master's I finished a few years ago, as well as the remaining loans from my undergraduate degree. A few years of unemployment and a return to school meant more loans (funny how EI payments don't stretch to tuition!) and now four loan payments to be made on a monthly basis. I enjoy my career as a librarian but I wonder if the debt I took on was worth it. I'm glad to see articles about the punitive effects of interest and the staggering amount of student debt in existence, but I wonder if the government will ever listen enough to look at this situation seriously.
dr evil
4 years ago
jennymich
jennymich...there ain`t no government.
librarians.. Kurt Vonneguts most respected people...
not worth it? Nawww say it ain`t so jennymich...
Adamwest
4 years ago
Our youth these days are
Our youth these days are conditioned to believe that they have it rough and are underpriveliged. It's sort of the lefty way of doing things. It's what the NDP count on at election time. What a joke! Cry me a river. Take your loans if you need them, pay them off when you get a job, and quit your whining, it's sickening.
silvia
4 years ago
Mexican free education
The UNAM (National Autonomous University of Mexico) and IPN (National Politechnical Institute) are both free post-secondary institutes. The UNAM has been recently ranked by the Times as the best university in all of Latin America, one of the top 100 universities in the world and has also been placed as the top university in the Spanish speaking world according to a study by the University of Peking.
Mexico is a much poorer country than Canada or the US.
How then is it that it has free public education and Canada or the US do not? Students may choose to attend private universities in Mexico but there are public places to study. The UNAM and the IPN have many campuses across the country. Many poor people would never get a bachelor's degree if it were not for these free schools.
Are you telling me Mexico can do it but Canada not?
Stump
4 years ago
slight correction
More like, but Canada WON'T. We'd sooner be like America with a Harvard-educated president who (inserts tongue in cheek) earned the right AND the money to go to school.
'Cause that's really working out for them.
James Burns
4 years ago
Sickening selfishness
Actually what's sickening adamwest is your constant refrain of unsupported moral outrage. Where is your evidence that the youth these days are conditioned to believe they have it rough? Your nasty personal opinions are just a lot of smelly hot air.
What's more you ignore factual evidence that youth from lower income families are in ever increasing numbers are unable to afford post-secondary education, because of rising tuition and other cost of living expenses, in spite of financial loan support.
ov
4 years ago
Who Benefits?
I'm picking up this assumption here that the students are the only people that benefit from our universities. I'm not referring to the benefit to "society" in general as the unmentioned alternative, because most of that has been lost with the scrapping of the liberal arts and any other course that teaches critical thinking rather than corporate indoctrination.
I'm talking about the corporations that benefit from public paid think tanks that do research that gets patented by private corporations. A few decades ago any research done became part of the public domain. How come we didn't hear a lot in the main stream media about the corporate takeover of our education? How come we don't charge a fair market price for all of this research? Why should tax payers subsidize business and then scapegoat the students?
Business loves students with big debts, because debt slaves are much more obedient and compliant to corporate whims.
ME2
4 years ago
user pay
Sez Sylvia:
How then is it that it has free public education and Canada or the US do not?
Are you telling me Mexico can do it but Canada not?
Geeez, Sylvia and all you other guys...... If Canada and the US are the only ones left who see a need for user pay in education, then isn't it important that we support our leaders in this????
After all, them slippery-slope socialisms are starting to pop up all over the place.
scott
4 years ago
School & Student Loans all about $$$
These days, teenagers in school have parents that are still paying off their student loans; not exactly something to look forward to.
School is big bu$ine$$, thus, we are being coerced into going to post secondary school for our "job future". Yeah, right, with all the un-and-under-employed university grads. Most pizza delivery people have masters degrees these days.
We are paying tuition that is way beyond any means of being able to pay it back; not to mention textbook and other costs, plus costs of living, and interest, taxes, car payments, mortgage payments, children costs, and rising costs of just about everything in general. Currently it costs more to take public transit in the Lower Mainland BC than it does in Japan. Crazy! Going to school is well beyond the financial means of most people.
I was recently looking at going back to school to upgrade some skills, but in the early 90s it was about $114 for one course for me (could barely afford it back then). Now it's about $600. One semester is now $10,000, same as it was when I was in Japan 10 years ago.
Well, you get the idea.
dave49
4 years ago
Some advice
Although I finished a Masters' degree a number of years back and quickly paid off what I borrowed (very low rent and decent wages at the time), one piece of advice is for the student to THOROUGHLY understand how the student loan system works. I asked a loans staffer at SFU about this and she said they try to inform students, but basically students are too busy getting the courses they want and dealing with other things at the beginning of the academic year to get to the loans system structure and policies.
If you don’t understand the system, you can’t use it to your best advantage.
Frank
4 years ago
Elliot
You were gone a long time and now you've come back with your 4th nom de plume? Oh man, why not just use the "Send me my password" feature? Or were you forced to change internet providers too?
G West
4 years ago
But Frank
El was actually back at school all this time.
Look how much his grammar and syntax have improved.
Guess he must have done it without a loan.
RickW
4 years ago
Soul To The Devil.....
So why not sign a contract with the government? Free post secondary (marks have to be good, naturalement!), and your A$$ belongs to the government until you work off the "loan", to be placed in any capacity government sees fit (but preferably in something related to your education).
Or finance P.S. yourself, if you don't wnat to be "in hock".......
justmel
4 years ago
Most of Canada...
Davey-boy said:
"Only two countries expect students to pay so much for their post-secondary education: Canada and the U.S."
Well, most of Canada does. In Quebec, the post-secondary tuition is a lot more affordable. My MBA will cost me approximately $30,000-$32,000 and I have no choice but to work while pursuing it. My employer doesn't pay for it.
On the other hand, my sister's tuition for an MBA at HEC in Montreal is $4,500 (no, not a typo, and not just for one semester, that's her entire tuition for one year). She's taking one year off to focus exclusively on school because she can afford it.
Personal income taxes for the two provinces are close (BC is a bit less), we could afford to provide more funding to post-secondary schools. It's all about priorities.
Mark Crawford
4 years ago
Are vouchers the answer?
I am quite critical of vouchers (i.e. tied demand-side subsidies), as can be seen in my review of Trebilcock & Daniels book "Rethinking the Welfare State" upcoming in the academic journal Canadian Public Policy. (See http://markcrawford.blogspot.com/2007/05/government-by-voucher.html) Nevertheless, I think they probably make more sense in post-secondary education than in just about any other policy area.
What we have now is a situation in which students are burdened with bank loans on the demand side and universities are subjected to sporadic freezes and price controls on the supply side, without compensating increases in funding to pay for the revenue shortfall. I have not studied the Quebec case closely, but what I hear is that low tuition has not increased enrollment as much as one would hope, and that quality of post-secondary education has suffered somewhat.
Giving all qualified full-time students a voucher of say $5,000 per year for the first four years of university education would take millions of dollars out of interest payments and dividends to Bank shareholders and put them directly into university treasuries and students' pockets. Most universities would then raise tuition fees considerably, but students could also be expected to benefit from better and more competitive universities.