VANCOUVER (CUP) — Part-time students will now be treated like their full-time counterparts when it comes to student loans.
In December, the federal government announced that people with part-time student loans will no longer accrue interest on their loans until after their studies have been completed, bringing the program in line with the full-time loan program.
“Economic recovery continues to be our top priority,” said Diane Finley, Minister of Human Resources and Skills Development, in a press release. “We’re helping Canadians gain the skills and education required to participate in today’s workforce and contribute to Canada’s overall economic prosperity.”
Active students with part-time loans will still have to pay any interest accumulated before Jan. 1, 2012, but won’t accrue any further interest until they’ve either completed their studies or stopped attending a post-secondary institution.
A spokesperson for Human Resources and Skills Development Canada (HRSDC) stated in an email to Canadian University Press that the change was prompted by a desire to achieve parity between the part-time and full-time student loan programs, as well as to help boost the economy.
“The Government of Canada recognizes the vital role that post-secondary graduates play on the road to this country’s economic recovery. That’s why the Government of Canada continues to focus on helping more students reach their education goals.”
The spokesperson went on to write that this change is in line with previous changes to student loans made by the government earlier this year, including increasing earnings exemptions for people with full-time student loans, allowing part-time students with higher family incomes to qualify for loans and forgiving portions of loans for new physicians and nurses who choose to work in rural or remote communities.
The NDP’s critic for post-secondary education, Rathika Sitsabaiesan, isn’t impressed by the announcement.
“There aren’t a lot of actual part-time students, so it’s not actually affecting a lot of students,” said the Scarborough—Rouge River MP.
She went on to say that instead of broadening access to student loans, the government needs to shift towards easing the debt burden on students.
“Instead of burdening students and their families, which are usually working families using all of their life savings towards educating their children, [the government should] provide grants rather than loans,” she said.
Sitsabaiesan pointed to the fact that total Canadian student debt is close to surpassing the $15-billion ceiling set by the Canadian Student Financial Assistance Act.
“In the act, it was set that $15 billion dollars was the ceiling that could ever be reached for amount of [student] debt that … could be outstanding at any given time.”
According to a government commissioned actuarial report on the Canada Student Loans Program released in July 2010, the $15 billion ceiling will likely be breached in early 2013.
If that occurs, the government would either have to find ways to reduce student debt or else amend the legislation in order to increase the ceiling. Back in 2000, the Liberal government pushed up the ceiling from $5 billion to $10 billion.
Sitsabaiesan said that the best way for the federal government to ease the debt burden on students would be to create a dedicated post-secondary transfer fund similar to the Canada Health Transfer. Presently, funding for post-secondary education is included in the broader Canada Social Transfer.
Because provincial governments have discretion over how the money from the Canada Social Transfer is spent, the amount that goes to post-secondary education can vary from year to year.
“There’s no stability. So [post-secondary institutions] are turning to create their own sense of stability by continuing to increase tuition fees by the max amount each year.”
Back in June, Sitsabaiesan presented a private member’s bill proposing the creation of a dedicated post-secondary transfer, but it has not passed first reading.
Without structural changes at the federal level for how post-secondary education is financed, Sitsabaiesan believes student debt will continue to grow unabated.
“Having more loans available is not really going to make education more accessible,” she said.