Students denied loan information

Tuesday, April 7th, 2009

Though Canada likes to tout postsecondary education as a hallmark of advancement, the government goes silent when asked about problems with student loans.

Recent reports show students who require information about their own student loans are being forced to file Access to Information requests.

Though the original intention of AI requests was to “provide a right of access to information in records under the control of a government institution,” the need for such a request in regards to student loans puzzles some.

“We’re in this bizarre situation where a borrower cannot find out from the agency that’s holding their loan what they owe,” Julien Benedict, founder of the Coalition for Student Loan Fairness (CSLF), said.

Benedict added the issue arose once a student defaulted on their loan and were passed off to a collection agency employed by the government.

To date, 127 borrowers have filed access requests since 2004.

“Borrowers should always have access to an up-to-date balance ... They should not be paying collection agencies that cannot collect this information.”

Students can only get a balance from the collection agency, but never a breakdown, Benedict explained. This is a problem for students attempting to calculate how much of the balance is interest, principle or service charges. The problem is increased since students’ files are passed from collection agency to collection agency.

“It’s very frustrating for borrowers because they don’t know who’s holding their file,” Benedict said.

David Simmonds, VP-university affairs for the University Students’ Council, said,

“We hear from students constantly that the maze of paper and documentation in the student loan system is burdensome,” he said.

Simmonds also outlined the need for customer support at the National Student Loan Centre (NSLC) when dealing with students.

He said a certain level of customer satisfaction is necessary to maintain a healthy contract.

“We can assume that the emotional distress caused by not getting the emotional support necessary can attribute to defaulting.”

Major complaints have arisen regarding NSLC’s customer service. In its contract with the government, which was obtained by CSLF through a freedom of information request, a higher incentive is put upon continuing a loan than ensuring customer satisfaction.

“Everywhere in this contract it recommends borrowers extend their repayment period to reduce their monthly owing amount,” Benedict said of the contract.

“Instead of reducing the sky-high interest rates so people can pay off their contracts faster, they’d rather extend the contract and have people pay more interest,” he added.

The government could not be reached to answer The Gazette’s questions.

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