OTTAWA, April 22 /CNW Telbec/ - In an alarming report issued today,
Statistics Canada demonstrated a worrying trend of private lending taking on a
much larger role in post-secondary financing. The report noted that the
proportion of graduates with debts to private lenders has increased by 37.5%
from 2000 to 2005. These graduates also tend to owe an average of 32.4% more
than their 2000 counterparts.
"Students are finding that the Canada Student Loan Program does not
adequately cover their financial needs", said Zach Churchill, National
Director of the Canadian Alliance of Student Associations. "They are being
forced to rely on private debt as a result."
The Canada Student Loan Program tries to assess the gap between a
student's financial resources and the cost of going to school. Unfortunately,
certain policies prevent it from covering the entirety of that gap:
- Parental contribution requirements require parents to liquidate their
assets (e.g. homes, small businesses, or cars) to help pay for their
child's education, which is an unreasonable expectation.
- Student loans do not account for the need of students to purchase
computers or laptops, which are essential for research and study in the
The Government of Canada has dedicated itself to the goal of streamlining
and modernizing the Canada Student Loan Program; this must include reforming
the way student financial needs are assessed and funded, or the trend of more
students turning to private lenders will continue. Private student loans have
interest rates prone to greater fluctuation than government loans, few
opportunities to manage debt outside bankruptcy, and require students to pay
interest throughout their study period.
"No student should have to carry unsupportable debt in order to pay for
an education," continued Zach Churchill, "and CASA has been concerned for
several years about private lenders exacerbating this problem."
CASA is recommending to the federal government that:
1. Student loan assessment exclude non-liquid resources such as homes,
principal cars, or small businesses.
2. Reduce the expected contribution of families to a student's education.
3. Allow a one-time expansion of government student loans to buy computer
4. Create a needs-based grant for graduate students.
The Canadian Alliance of Student Associations (CASA) is a non-partisan,
not-for-profit national student organization composed of 23 student
associations, representing 300,000 students from coast to coast.
For further information:
For further information: Zach Churchill, National Director, The Canadian
Alliance of Student Associations (CASA), (613) 236-3457, ext 222; (c) (613)