Loan plan revised
By Sara Marett
Holding true to a platform promise made in 1995, the provincial government will soon introduce an income-contingent loan repayment plan in an attempt to ease the burden of debt felt by post-secondary students. Student groups, however, disapprove of the rumored details of the plan and are angry they have not been consulted on the components of a system that will affect thousands of Ontario students.
An ICLRP consists of a payment method dependent on an individual's income at post-graduation time, explained David Trick, assistant deputy minister at the Ministry of Education and Training.
Reports show 18.5 per cent of students defaulted on their loans within two years, Trick said, providing a clear picture that the current Ontario Student Assistance Program was not working.
Barry McCartan, executive director of the Ontario Undergraduate Student Alliance, said his organization has always supported the idea of a well-designed income-contingent loan repayment program, but does not consider the designs for this plan to be well-developed.
McCartan said according to the proposed model, students will not be provided with a program that makes repaying loans easier, but rather will be stuck with three times the debt because of interest rates.
"If the plan increases the pay-back time to a proposed 25 years from the current 10-year limit, students could pay an average of $24,000 in interest over the course of this time period," he explained.
If students are not able to repay their loans after a 25-year time period, the government then has to forgive their loan amount, McCartan said. This could be upwards to $82,000 for lower-income people a large sum to ask the government to forgive, he added.
"This model plan will force people with the lowest income to have the largest amount of debt a bad decision on the part of the government."
McCartan said these kinds of problems can be solved with a shorter repayment time and the government should increase the amount of money given to students up-front. "This proposed plan would be no better than the existing OSAP."
OUSA and the Council of Ontario Universities said they are frustrated their groups were not consulted with design plans for the program which is scheduled to be in place by Sept. 1998.
"The government could devise a new plan behind closed doors which could be deeply flawed and then we would be stuck with it," McCartan said, recalling the quick changes the provincial government made to the OSAP in the summer of this year.
David Scott, spokesperson for the Council of Ontario Universities, said he hopes the provincial government will soon have more substantial discussion with his organization so that if changes need to be made, they can be made soon.
"There has been no formal plan devised at this time by the provincial government," Trick said, adding many design issues have been discussed with student groups such as OUSA and the Canadian Federation of Students of Ontario as well as university presidents.
"We would like to proceed as quickly as possible with the plan so more students can take advantage of its benefits," Trick said.