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New student loan repayment plan lacks creativity

BC Premier Christy Clark recently announced a new program to ease the pressure of weighty student loans as a part of her three-tiered “Families First” scheme. But with the highest student loan interest rates in Canada, BC needs more than an altered student loan repayment system to implement any real change.

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By Paige Hoblak (The Cascade) – Email

Print Edition: July 18, 2012

BC Premier Christy Clark recently announced a new program to ease the pressure of weighty student loans as a part of her three-tiered “Families First” scheme. But with the highest student loan interest rates in Canada, BC needs more than an altered student loan repayment system to implement any real change.

The problem doesn’t lie with how students will pay off their loans – it is that tuition fees are unaffordable.

The altered system will allow students to focus their initial payments on the interest portion of the loan, and afterwards to the primary payment. Income, debt load and family circumstances will also be taken into consideration. This will allow students some leeway, giving students more time to find a career which will earn them real money in order to pay the loan off accordingly.

Pressure will be taken off somewhat, but this does not address the harsh reality of an unstable economy and post-university debt.

The improved system is supposed to help families who are financially vulnerable. I see this as a step in the right direction – yet only just a step.

This may initially help families who are vulnerable (as expressed by Clark) but she ignores the needs of the individual student on which the loan ultimately lands.

In some cases, such as a student maintaining a low income for an extended period of time, or possessing some form of disability, loans may be forgiven entirely. However, these cases are very circumstantial and do not suffice.

The new loan repayment system initiated by Clark and her Liberal party has introduced political repercussions. The NDP has criticised the reform in a recent Times Colonist article, subsequently upping the ante.

NDP advanced education critic Michelle Mungall said the premier’s announcement was only a tweaked version of a program that already existed. “This is not a strong announcement, this is not a bold direction, this is not addressing the top issues for students … This is way off the mark.”

What is lacking here is the government’s ability to be creative in finding a viable solution.

A reformed payment system based around circumstance does not offer an adequate solution for students. Students should not have to sacrifice education due to the looming shadow and pressures alongside debt.

Interest rates need to be cut drastically, better yet, abolished. If Canada could create a system more similar to that of a European model, which charges higher taxes and much lower tuition fees, I feel that we could find no faults in such a structure.

With the modified payment system students will see initial pressures alleviated, although any tangible and lasting effects remain unseen. Stalling the heaviest payment is not a substantial method in bettering the future for students.

Education should not entail the amount of sacrifice that is willingly offered up by Canadian students. Significant change is most definitely still needed in order for students to feel confident about making that big decision to attend university.

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