Nfld gov’t tackles $220 million student debt
By Marshall Bellamy
The Newfoundland government has taken on the province’s
student debt from the Canadian Imperial Bank of Commerce, causing
some to wonder whether the added expense will put a strain
on the province’s finances.
“You need to keep tuition down,” said Thom Duggan,
VP-external for the Memorial University of Newfoundland Students’ Union,
noting he is hoping the $220 million taken over by the government
will not force them to raise tuition.
According to Duggan, Newfoundland has the lowest tuition in
the country after Quebec, and if the tuition increases, he
said, then migration from the island may rise as more university
graduates leave for work out of province in order to pay off
their student debt. “We have a problem, whereby we have
a problem keeping people here,” he said.
“The government is not anticipating any increase in
tuition,” said Lynn Salter, director of communication
for the province’s Department of Youth Services and Post-Secondary
Education, adding she was unable to comment on whether the
addition of the student debt to the budget would strain the
Newfoundland’s tuition decreased by approximately 25
per cent over the last three years when the Liberals were in
power, Duggan explained, citing that Newfoundland’s tuition
is about $1,300 a year.
He said his real worry is that when the newly elected Conservative
government came into power last year, they promised to balance
the books and included the new student debt load in the province’s
The loans owed by the students are not debt, Duggan said. “They
are more like accounts receivable.”
Rob McLeod, spokesperson for CIBC, pointed out that the bank
had a contract with the Newfoundland government to service
and administer the loans. The contract expired last year, he
CIBC has also been moving away from underwriting student loans
and prefers more direct lending, McLeod said, noting if this
move was not taken, there would be two separate systems for
student loans rather than one. “The province will better
serve the loans with one funder — there are probably
savings to the province in terms of customer service,” he
“It’s a small, baby step forward, but we’re
still afraid of the 10 steps backward,” Duggan said.