All Posts Tagged With: "Canada Student Loans"
No fraud reported so far
We’re sorry — and we’re trying to make sure it never happens again.
That’s the message from senior federal bureaucrats responsible for the loss of personal information belonging to more than half a million Canadians.
Human Resources and Development Canada lost an external hard drive and USB key last year, resulting in the massive privacy breach.
Both the RCMP and privacy commissioner are investigating and at least three class action lawsuits have been launched as a result.
Bureaucrats from the department apologized today in front of a House of Commons committee as they tried to explain what went wrong.
They say they’ve been monitoring for signs the data is being misused, but no fraud has been reported so far.
Affected graduates unsatisfied with gov’t response
Last Friday, the agency that oversees the Canada Student Loans Program shocked post-secondary graduates by announcing it had lost social insurance numbers, full names, dates of birth, contact information and loan balances of 583,000 individuals who took federal loans between 2000 and 2006. The information was stored on an external hard drive deemed missing from a Gatineau, Que. office on Nov. 5.
Just five days after the bombshell announcement from Human Resources and Skills Development Canada, the agency that oversees Canada Student Loans, more than 4,300 Canadians had approached St. John’s Nfld.-based lawyer Bob Buckingham about his proposed class action lawsuit. Today, that class action suit was filed.
“New information comes into us by the minute from people on what is happening here, in terms of the cost and consequences to them,” says Buckingham, a privacy breach claims lawyer. He added that he hopes HRSDC will “negotiate a reasonable and realistic resolution.”
HRSDC representative Amélie Maisonneuve wrote in an email to Maclean’s On Campus Thursday morning that they are “committed to conducting a thorough and extensive review of this incident in order to prevent such an occurrence in the future.” Maisonneuve added that “extensive, in-depth and thorough search efforts for the missing hard drive have been undertaken and continue.”
HRSDC has already undertaken some action in an attempt to address the fallout. On Monday, they launched a toll-free number that concerned borrowers may call and check whether their personal information had been involved. The department has fielded more than 40,000 calls already.
But some students aren’t finding it very useful. Victoria Strange, a 25-year-old Bishop’s University graduate, called the hotline on Monday after hearing online about the privacy breach. “My future’s pretty much on the line if someone takes my identity,” she says. “There’s not much I can do about protecting my social insurance number, because I have no idea who might have it.”
Rochelle Latinsky, a 27-year-old York University graduate who lives in Toronto, made the call to HRSDC on Tuesday. She said she was told to expect a letter with further information from the department in the coming days. She says a letter doesn’t cut it: “They should be doing their best to try and reach out to people beyond a letter in the mail,” she said.
HRSDC confirmed they are mailing letters to affected individuals detailing next steps.
Latinsky has since made calls to her bank and a credit reporting agency, as suggested by HRSDC, to monitor her situation for any fraudulent activity. “The fact that I have to do all the chasing,” she says, “is really not cool.”
When asked whether they would join a class action lawsuit like Buckingham’s, both Latinsky and Strange said they would consider it. Strange says her trust in the government has been broken.
Names, SIN numbers, contact info. missing
A federal agency has lost a portable hard drive containing personal information about more than half a million people who took out student loans.
Human Resources and Skills Development Canada said Friday the device contained data on 583,000 Canada Student Loans Program borrowers from 2000 to 2006.
The missing files include student names, social insurance numbers, dates of birth, contact information and loan balances of borrowers, as well as the personal contact information of 250 department employees.
Borrowers from Quebec, Nunavut and the Northwest Territories during this time period are not affected.
It takes a lot of creativity to finance second degrees
Last fall, when Kristen Pennington started at the University of Toronto faculty of law, she was surprised to learn of “an assumption” that students wouldn’t work during the school year. “I’d never been in school and not worked,” the 22-year-old says. “It wasn’t a question.”
During her first year in law school, Pennington held down three part-time jobs: she worked as an after-hours receptionist at the Canadian National Institute for the Blind, as an executive assistant for a lawyer, and as manager of the undergraduate residence at Glendon Campus, part of York University, where she also lived rent-free. “I worked for my room,” she says. “It was a great expense to cross off the list.” The commute from Glendon to U of T’s downtown campus, on public transit, was “45 minutes on a good day.”
The government needs to allow graduates to consolidate their debts
When I was applying to university six years ago, I knew student loans were going to be part of that process. There was no question that I’d accumulate debt over the next four years. But I was okay with it. Getting my bachelor’s degree was worth the $40,000 price tag.
I’m going to go out on a limb and say I’m grateful Canada Student Loans exists and honestly don’t mind that I have student loans. But there’s a heck of a lot about the organization that needs improvement.
While the application process is lengthy and complicated, the organization doesn’t get truly complicated until you enter repayment. And if you’re a graduate like me — who grew up in B.C., went to university out of province and then did continuing education in a third province — things get really complicated.
Unlike provinces like Ontario, where the provincial and federal components of a student’s loan are combined, Student Aid B.C.’s website explains, “Though there is a single application process for both types of loans, each government addresses repayment issues and inquiries separately.”
That simple little clause is where my headaches really began. That means little things like monthly payments and changing my address have to go through two different organizations. Not the end of the world, I suppose. But to further complicate things, I decided to ride out the recession by taking one class last fall to break up my time spent watching TV. I applied for a part-time loan, which I’m now paying off in a separate monthly payment, even though it was issued from the same organization I already carry one loan with.
I now make monthly payments on a $30,000 federal loan, a $1,000 federal part-time loan and a $4,000 provincial loan. And there’s nothing Canada Student Loans can do to make my life easier. While low interest rates and flexible repayment options are certainly helpful, ease of repayment is higher on my list of ways the government could help new graduates.
By making it impossible for graduates to consolidate their loans, or at the very least the administration of their loans, more graduates like my fiancé may opt to get out of Canada Student Loans all together. He re-financed his loan with CIBC when interest rates bottomed out during the recession. His payments are higher, he pays slightly more interest and has little flexibility. But he’ll be done repayment five years earlier and only has to do deal with one customer service professional when he needs assistance.
Canada Student Loans should be paying attention to people like him. Bailing for the competition is not good business, especially when the competition could get graduates into sticky situations because the flexibility factor is almost gone.
But as it is, Canada Student Loans is nothing but frustration for me. It seems like I’m on the phone every other week with various people about my split-personality loan. The federal government should help graduates to consolidate their many loans into one monthly payment to Canada Student Loans, allowing them to speak to only one person when they have questions or problems.
In my case, we’re only talking about $5,000, but much more in peace of mind. That’s a post-secondary improvement announcement I could get behind.
Pearson speech from 1965 shows how much the issues facing higher education have changed and how much they’ve stayed the same
As Wherry points out, there are some big differences between Pearson’s speech and the speeches we hear politicians giving nowadays. Pearson is subject to boos and a lot of heckling from students who didn’t agree with his stance on nuclear disarmament and felt his government was moving too slowly on student aid. At the time, The Saskatoon Star Phoenix described the heckling as “good-natured needling,” something I wouldn’t expect to see if our current prime minister was heckled in a similar way.
Quite simply, politicians don’t make speeches like this anymore, Pearson spoke to 4,000 students, the night before he spoke to 2,900 members of the general public. As Wherry says, “few leaders now ever put themselves in front of crowds that aren’t controlled or selected.”
But the more things change, the more they stay the same.
Early in the talk he says, “I know there is one subject in which you are particularly interested and that is higher education, the place of universities in our society, the obligation of governments to higher education and the obligations of those who receive higher education to their society and to their country.”
Pearson also wonders whether “the emphasis on wise and unhurried teaching and research be replaced by the demands and dimensions of a knowledge factory?”
The speech comes at an interesting time, Canada student loans had only been introduced the year before and universities were asking for–and getting a lot more money from Ottawa than they ever had before.
While Pearson says that all those who can qualify for university should be able to attend, regardless of finances, he believes that in exchange for government support of universities all graduates should have a “priority to service to their country over advantage to themselves.” A sentiment we don’t hear that much these days.
Interestingly, Pearson says that he thinks university education will eventually be like high school and become free.
Of course, some of the issues facing universities in 1965 are very different from those today, Pearson talks about the possibility of nuclear war which could make survival a more important priority for the government than post secondary education.
But some of it is the man more than the times. He suggests that those who question what Canada has done to ensure world peace and avoid World War III should go down to the United Nations and ask the other delegations what they think.
Some U.S. universities offer Canadians domestic tuition, but keep full fees for most out-of-state Americans
Inside Higher Ed, one of two high quality higher education publications in the United States, reported last week on a “new” trend in the Prairies along the United States/Canada border: the granting of domestic/in-state tuition rates to students crossing the border.
First, some context. In the United States, most students crossing state borders are charged significantly higher tuition fees than students staying within their own state borders. While the United States federal government has more influence and provides significantly more direction to universities in exchange for public funds, the “provincial” boundaries in the United States are significantly stronger compared to those in Canada.
The concept that a student from Ontario would be treated any differently than a student from British Columbia at a B.C. university seems absurd to us, but this is taken for granted every day in the United States.
With the exception of Quebec and Nova Scotia, provincial governments don’t care where you come from. As long as you’re from Canada they will charge you the same rates as “in-province” students. (Quebec charges out-of-province students on-par with the average tuition rate in Canada. Nova Scotia charges out-of-province students the highest domestic rate in the country.)
This makes the decision by some United States institutions to grant “in-state” tuition rates to students from nearby states and provinces significant. They are going against the conventions of the American higher education system. While Americans love to play out their national patriotism, they are truly a union of individual states with all the higher education border barriers one would expect of a sovereign nation-state.
In terms of many Canadian students taking up the offer, that remains to be seen. While students can bring Canada Student Loans with them, some provinces do not grant loans to students paying their tuition fees to a foreign institution.
Debt-ridden students are still on the hook for interest six months after graduation
The term “grace period” as it applies to student loans is misleading and confusing and should be scrapped, an advocate for the rights of borrowers said Thursday after filing a formal complaint against Human Resources and Skills Development Canada.
The term has come to mean two different things depending on which federal policy is looked at, argues Mark O’Meara of Canadastudentdebt.ca.
According to new credit card rules adopted by Ottawa this month, “grace period” means banks can’t charge interest on new purchases for 21 days.
But O’Meara has been fighting with the Human Resources Department for months over its use of the term as people with student loans are still on the hook for interest during the six-month “grace period.”
The term merely means students don’t have to make payments for six months after graduation while they look for work.
“Here we have one legislation using grace period as one thing and another legislation using this term inappropriately,” he said.
O’Meara said grace period “implies” an interest-free/no payment term and meant that up until the early 1990s with regard to student loans. The government has since changed its policy and, as such, should change the name of the provision as well.
“(They should) use something that’s more appropriate,” he said. “Something like payment and interest deferral period. That would be clear.”
Ask any accountant or business analyst: the juicy material in annual reports and corporate filings is usually not what you see headlined on the first page of the document. It’s generally buried. Or hiding in plain sight. So it is with the recently released annual actuarial report on the Canada Student Loans Program. The report [...]
Ask any accountant or business analyst: the juicy material in annual reports and corporate filings is usually not what you see headlined on the first page of the document. It’s generally buried. Or hiding in plain sight. So it is with the recently released annual actuarial report on the Canada Student Loans Program. The report is built on the rather newsworthy but largely overlooked assumption that Canadian university and college enrolment will start shrinking as of next year, and go right on shrinking steadily, all the way to 2026. By the time the great contraction is done, Canadian campuses will have 18% fewer full-time students. The audit was performed by the Office of the Superintendent of Financial Institutions, or OSFI, a federal oversight agency.
The Star was the only major media source to pick up and run a story on the CSLP report. But The Star focussed, not surprisingly, on CSLP’s first order of business, namely student loans. The actuaries expect that tuition will rise 3% faster than the rate of inflation, such that average full-time tuition in 2031 will be $19,000, up more than 200% from this year. And the CSLP program will, as a result, become larger and more expensive, with more students requiring loans, and with average loan amount growing larger. A little over one-third of Canadian student rely on CSL loans now; by 2031, the report estimates that slightly more than one-half of students will be taking out a CSL loan to help pay for higher education.
But the bigger story, with a rather significant impact on the post-secondary sector and the country, went largely ignored. The auditors expect full-time, Canadian post-secondary enrolment—which has been climbing for a couple of generations—to peak next year at 985,000. Student numbers, the auditors assume, will then slowly but steadily fall until 2026, when Canada will have 805,000 post-secondary students. That’s a drop of 180,000 students or 18.3%. How big is that? This big: It’s equivalent to shutting down every public university in Manitoba, Saskatchewan, Alberta and British Columbia.
(Not something I’d recommend; just trying to give a sense of the magnitude of decline in student numbers that OSFI is talking about. Note that these post-secondary enrolment numbers include both colleges and universities; presumably both colleges and universities will see enrolment drop. So don’t start selling off the U Calgary campus to real estate developers just yet).
OSFI’s actuaries are just the latest debating squad to join the “Canadian universities: growing or shrinking?” debate. We’ve seen the Council of Ontario Universities, the lobby group for Ontario’s universities, predict massive enrolment growth in the province over the coming decade. The four universities in the Greater Toronto Area last year similarly said that they were bursting at the seams, and the future would bring so many new students that the city would need another university. At the same time, however, the Maritimes Higher Education Commission said that universities in Atlantic Canada could see enrolment shrink by 14 per cent in the near future, because the number of young people in Atlantic Canada is falling. Last year, the Millennium Scholarship Foundation and Statistics Canada similarly noted that the pool of university-age (and college-age) Canadians is about to shrink sharply. Absent a substantial increase in participation rates—the percentage of young people in higher education—that should spell many thousands of fewer students at Canada’s colleges and universities. The fact that OSFI’s actuaries have joined this debate unwittingly, and from a position of disinterest—they’re just financial institution supervisors, trying to understand whether the CSL program will remain solvent in years to come—is a powerful argument in favour of taking their conclusions seriously. They aren’t biased one way or the other.
Students borrowing more, taking longer to repay; average student now borrows $5,631
Full-time students owe more in federal student loans than ever before, according to new numbers released by the Canada Student Loan Program. The latest annual report to be released next week reported that full-time students received an average annual federal loan of $5631 in 2005-06 — $802 or 17 per cent more than in the previous year.
The jump is likely due to changes to parental and spousal contribution levels that came into effect during the period. The changes to policy lowered the amount parents and spouses were required to contribute. The move was designed to make student loans available to more middle and upper-income students.
Julian Benedict, co-founder of Coalition for Student Loan Fairness, says that the reasons for the jump in average loan amounts don’t change the issue: students are getting deeper and deeper in debt. “The government is facilitating more debt for students, but providing less assistance to reduce debt,” he said.
The government distributed less money through the interest relief program in 2005-06 than in the previous year. 6,000 fewer borrowers benefited from the program and the government distributed $4.3 million less than the year before. Also, 1,000 fewer borrowers used the Debt Reduction during Repayment program.
According to Murray Gross, HRDC departmental spokesperson, the decline in borrowers using the assistance programs is a good thing. “Interest Relief recipients have decreased by 13 per cent over the last three years,” he said. “This decline suggests that fewer students are having difficulty repaying their loans, so that they are less likely to need interest relief or debt reduction.”
But Benedict says that the statistics show that borrowers are extending their repayment period and lowering monthly payments to avoid defaulting on their student loan. 25 per cent of borrowers revised the terms of their loan in 2005-06, a jump of 12.6 per cent.
Murray says that one third of those revisions are borrowers shortening the period of repayment. “In fact, relief recipients have decreased by 13% over the last 3 years,” he said.
As long as the National Student Loan Service Centre is in a private company’s hands, don’t hope for improved service
Jennifer Fitzpatrick didn’t think it would be a big deal to reapply for interest relief on her student loan since she had already been accepted into the financial aid program once. Little did she know how badly the National Student Loan Service Centre (NSLSC) was about to bungle her file — leading to a big black mark on her credit rating.
Fitzpatrick is only one of many borrowers negatively affected by the administrative maze that is the Canada Student Loan Program. According to the 2007 Createc + SIF survey, 60 per cent of those who have applied for a government student loan were dissatisfied, and tales of lost documentation, misplaced loans, and misinformation are unending.
When Fitzpatrick graduated as a registered massage therapist in 2001, she had $30,000 in federal student loans, $10,000 owed to the Royal Bank and the rest held by NSLSC. She opened a massage practice and struggled to build it. Self-employed, she couldn’t keep up with her student loan payments and contacted the Royal Bank to apply for interest relief. They advised her to apply through NSLSC. They said NSLSC would notify the bank if she was approved.
The first time, she was approved and everything went smoothly. But when she applied a second time to have her interest relief extended, she waited two months without an answer, all the while assuring the Royal Bank that she would bring the interest relief form in as soon as she received it.
Finally, she received a letter asking for additional information, but it had been addressed incorrectly, tying it up in the mail for months. But the letter came too late and the Royal Bank had already sent her loan to a collections agency, that charges 18 per cent interest, and reported a negative rating to the credit bureau.
She later brought her complaint to her MP and eventually received an apology from the NSLSC. Although the apology letter partially acknowledged that NSLSC was to blame for the mistake, it hinted that she was somehow at fault and did nothing to improve her credit rating. “It is truly a nightmare,” Fitzpatrick says.
Stories like Fitzpatrick’s are all too common among student loan borrowers, as the Createc survey shows. One might assume that between the poor survey results and the numerous complaints being brought to MPs, the feds would be convinced to try to improve the public program. But although NSLSC is funded by taxpayers, it is not run by the government at all — but an American company. And aside from the fact that this means that the American government has access to Canadians’ student loan information under the Patriot Act, the company has also put its own interests above the the interests of students.
Budget 2008 offers no big moves in higher education
The 2008 federal budget had been widely expected to contain several major initiatives in higher education, but what the Conservative government delivered on Tuesday was instead a modest tinkering with the status quo, with some additional money for research, and housekeeping changes at two major student aid programs.
Finance Minister Jim Flaherty said in the budget speech, “We must ensure that the next generation of Canadians has the opportunity to excel in this increasingly competitive world.”
Post-secondary initiatives announced in the budget will see the Canadian Millennium Scholarship Foundation replaced with a similar program; administrative changes to student loans; new scholarships for graduate students; money to help secure university laboratories and new funding for medical, automotive, and environmental research.
COMPLETE BUDGET 2008 EDUCATION COVERAGE
The Canadian Millennium Scholarship Foundation, which provides $350 million a year in needs and merit based scholarships, is to be replaced in 2009 by a new, $350 million Canada Student Grants Program. Students will see little difference between the two programs. Grants will be given out based on an income assessment. Low-income students will get $2,000 a year and students from middle-income families will receive $800 for each year of study, guaranteed during the entire course of their university or college degree. Under the current Millennium program, students must reapply each year for needs-based grants. The Millennium Foundation’s merit-based scholarships are also to be phased out.
Canada Student Grants funding is budgeted to increase by $80 million by 2012-13, to $430 million.
“This government is good at spreading chunks of money here and chunks of money there with little actual new money involved,” said Liberal post-secondary critic Mike Savage. “There is no talk of expanding the student loans system to assist more students, there is no increase the amount of aid that a student can receive.”
After a year-long review of Canada Student Loans, the government is also changing the way student loans are administered. The budget allocates $23 million over four years to create a new service delivery model. The federal government also says it will work with the provinces to create a one-stop, national website to administer student loans.
An additional $26 million over four years will be used to increase loans to part-time and married students. The budget also says that the government plans to spend $76 million over four years to assist graduates experiencing difficulty repaying their student loans. However, the government did not provide any details on exactly how this money will be used, saying it still has to negotiate agreements with the provinces.
Student groups had called for lower student loan interest rates. The 2008 budget left the federal student loan interest rate unchanged.
Universities will receive $116 million in new research funding next year. The new funding is directed primarily at research with environmental or commercial applications. $80 million will go to Canada’s three major research granting councils. Genome Canada, a not-for-profit corporation that funds genomics and proteomics research will receive an additional $140 million. And $250 million will be spent over the next five years on a new Automotive Innovation Fund, which will sponsor research in the automotive sector.
Five hundred top graduate students will receive support from a new program, the Canada Graduate Scholarships. To encourage top graduate students to stay in Canada, the government will spend $25 million over the next two years to create the scholarship which will be worth up to $50,000 over three years.
To encourage parents to save for a child’s education through a Registered Education Savings plans, the amount of time that a plan may stay open has been extended from 25 to 35 years, and the maximum contribution period has been extended by 10 years.
Will exempt deployed soldiers from paying student loan interest
The federal government tabled Bill C-40 in the House of Commons Monday. The Bill will amendment both the Canada Students Loans Act and Canada Student Financial Assistance Act to give full-time student status to actively deployed reservists for the purposes of student loans.
“Student reservists will appreciate this support,” said Monte Solberg, Minister of Human Resources and Social Development. “It will facilitate the return to studies for reservists once they return home.”
A spokesperson for the Department of National Defense declined comment stating that it would be inappropriate because it’s a political issue before the House of Commons.