Volume 91, Issue 50

Wednesday, November 26, 1997



Students' loans mean government debt

By Brendan Howe
Gazette Staff

Too many students are defaulting on their loans and the government needs to do more about it. This is the latest report released yesterday by provincial auditor of Ontario, Erik Peters.

The report states that as of March there were 438,000 Ontario Student Loans outstanding, totalling over $2 billion of which 32 per cent belong to students who have finished school. Peters' report said it is expected $800 million of loans will be forgiven in the future.

The report recommends the provincial government take action to reduce the risk and cost of defaulted student loans while making more of an effort to thoroughly check-up on information presented by students when applying for the Ontario Student Assistance Plan.

Brad Lavinge, chair of the Canadian Federation of Students, said looking at the student loan process while the student is in school is not the answer.

"Students studying in Canada graduate with the highest debt in the world. That is the student aid problem." He added measures must be introduced to lower debt loads because the difficulty comes when students complete their studies.

Lavinge does, however, support other parts of the report and said the statistics help reinforce that the federal, as well as the provincial government, needs to introduce debt reduction measures.

"[The report] helps prove the point you can not increase tuition, debt load or youth unemployment without a high social cost," he said. His solution to the debt problem is to introduce up-front and post-study grants, freeze tuition and implement a full employment strategy.

Ryan Parks, University Students' Council president and regional director for the Canadian Alliance of Student Associations, said if the country would adopt the CASA Income-Based Remission program, nobody would be defaulting on their student loans.

Parks said he does not believe there is a significant amount of fraudulent claims within OSAP and targeting the verification of information given when students apply is not what the government should focus on.

"There's no doubt OSAP needs to be revised but to suggest students are the problem is wrong and insulting," he said. Parks added 50 per cent of Canadian university students do their learning in Ontario postsecondary institutions.

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Copyright The Gazette 1997