All Posts Tagged With: "CASA"

Students may not always be as educated as they should be when it comes to financial aid

(Editor’s note: In the opening paragraph of this post, it is claimed that Canada Student Loans requires $149.5 million to cover “60,000 additional defaults.” In fact the $149.5 million is needed to cover loans deemed unrecoverable, as per the Financial Administration act, see 2010-11 budget estimates, page seven. The money would have been originally budgeted last spring. It is the delinquency rate, the percentage of loans in arrears, that has been growing, rising to 13 per cent in 2010-11 from 10 per cent the year before.)

While generations of students have relied on student loans to fund their education, the recent revelation that the Canada Student Loans Program is facing a $149.5 million shortfall because of 60, 000 additional defaults in 2010 may suggest that students don’t always know what they’re getting into when they decide to take on a loan.

“A lot of times student’s don’t necessarily look past the four years of their degree, they are just kind of worried about getting through their degree program,” says Rory Tighe, vice-president student life of the University of Alberta Students’ Union, who helps manage the Student Financial Aid Information Centre at the U of A. “Thinking about the long term effects of the debt that they’re accumulating is sometimes a bit of an issue.”

A study published by the Canadian Alliance of Students Association in 2010 found that many students were “very poorly informed about the details of the government financial aid system.” The study challenged over 20, 000 students across the country to a financial aid literacy test, which almost three quarters of the participants failed.  Many of the students surveyed didn’t understand the details surrounding repayment of their student loans, with almost half not realizing that individuals are required to begin repaying their loans six months after graduation, and only 23 per cent understanding that their loans begin accumulating interest immediately after graduation.

In an email, Amélie Maisonneuve, a spokesperson for Human Resources and Skills Development Canada, stated that the $149.5 million needed to write off the unrecoverable student loans “is consistent with past trends and had been forecast by both HRSDC and the Office of the Chief Actuary.”

When asked why so many students don’t seem to understand the details of the federal government’s student financial aid system, Maisonneuve pointed said the government recognizes the need to “modernize” the system and pointed to the department’s CanLearn website, where students can find of information on the Canada Student Loans Program and the details of their own loans, including transaction history of payments, and how much they have left to repay.

Tighe felt that the federal government already does a reasonable amount of information provision about the program, “it’s just a really complicated program and it’s not something that’s engrained in our education system.

“Trying to get through your degree, you have enough stresses just trying to get enough funding to progress year to year. There’s definitely information out there, it’s just that students don’t necessarily go out and find it all the time.”

Doug Hoyes, a licensed bankruptcy trustee who testified before the Senate Standing Committee on Banking, Trade and Commerce on changes to legislation on student loans and bankruptcy in Canada in 2008, said that it was essential for students to keep track of how much they’re going to owe once they graduate, explaining that there were plenty of debt calculators available for students to use online.

“If students actually saw that number, they’d realize ‘oh my goodness, I’m going to have to pay $400/month on my loan, but I’m only making $1500/month’ . . . that may make it more likely that students are working a part-time job, where otherwise they wouldn’t have been,” Hoyes said.

In his experience, Hoyes said it was “quite common” for clients to file bankruptcy because of unpaid student loans, explaining that 14 percent of clients at his firm, Hoyes Michalos & Associates, have outstanding student loan debt at the time of their insolvency. According to the firm’s website, the average age of these applicants is approximately 35 years old, since student loan debt is only dischargeable in bankruptcy if the applicant has not been a student for seven years, after new student loan bankruptcy laws passed in Canada in 2008.

“The classic case that we would see would be someone who went to school but was not able to get a job in their chosen field [ ... ] If you go to school to become a doctor and you get a job as a doctor, you’ll probably be able to pay back the loans. It’s when you go to school and aren’t able to get a job earning enough to pay back the loans, that’s when you run into problems,” Hoyes said.

For some students taking on debt is not necessarily a negative. Ashley Gaboury, an English major at the University of Manitoba, said she was nervous about taking out a federal student loan for the first time to help pay for her last year of university. However, she felt that student loans weren’t necessarily a bad form of debt, considering it’s going towards an education that will hopefully lead to a job.

“It’s just another thing that you’ll have to cover. I already have a credit card that I have to budget for and a cell phone, so I think it’s just something that you have to see if it . . . will fit into your life.”

Photo: Getty Images

Recession and “racialisation” roadblocks for Canadian post-secondary students

Two student groups have released studies highlighting the difficulties that face post-secondary students in funding their education.

The Canadian Alliance of Student Associations study, “Summer Work and Paying for Post Secondary Education,” surveyed more than 18,000 full-time undergraduate students. It found that of the 84 per cent of participants who reported working last summer, one-third only found part-time employment, working less than 20 hours per week.

The overall seasonal earning median was $3,200 and students indicated they were only able to save less than half that amount. Of those surveyed, 62 per cent reported personal savings as a source of funding, which includes the previous year’s summer job as well as other personal savings. The study concludes that the the recession has been difficult on students who are increasingly working to fund their own education, but have fewer opportunities to earn money.

A Canadian Federation of Students study also highlights difficulties in funding post-secondary education. Their survey, “The Racialised Impact of Tuition Fees,” argues that rising tuition fees marginalizes “racialised students.” The study’s findings are based on socio-economic indicators, such as lower average wages, experienced by students who identify themselves as a visible minority.

It cites data on tuition fees that have more than tripled in the past two decades and tuition fees as a higher percentage of average income for racialised students to call upon “increased public investment in higher education.” The CFS’ study focuses mostly on Ontario students, who currently pay the highest average tuition fees, according to Statistics Canada.

But will the motion pass? This time, for a variety of reasons, the result isn’t certain

If one thing has been made clear over the past few weeks on this website, it’s that’s the Canadian Federation of Students (CFS) is definite water-cooler talk. That is, if the Internet had some sort of equivalent of a water cooler. But regardless, through a combination of its size and its penchant for creating controversy, the CFS can definitely be considered sexy within the realm of Canadian post-secondary student government/lobbying. Which isn’t saying much. But still.

However, the CFS’ counterpart, the smaller and federally-focused Canadian Alliance of Student Associations, keeps trundling along, working exclusively on issues of federal jurisdiction. Its largest member, UBC, may be fully pulling out of the group tonight. A motion has been put forward to the student council that would see the Alma Mater Society (AMS) fully remove itself from CASA. One of the things CASA trumpets as a selling point is that members can easily join and leave whenever they see fit without a full-scale referendum—and UBC students may just take full advantage of that.

Curiously, the end of the motion reads: (click for the entire motion)

“Be it further resolved that the AMS remain unaffiliated to any federal lobbying organization, for no less than two years; and
Be it further resolved that if the AMS considers affiliation with an external lobbying organization, it negotiate with CASA first.”

It’s a clear compromise on those who drafted the motion to find common ground with councillors who are neutral on the relative merits of CASA, but are strongly against joining the CFS. On the other hand, if federal fixed-election laws have taught us anything, it’s that these sorts of “we pwomise” motions/laws can easily be circumvented. A new executive and council could come in and override all of this.

So will the motion pass? Last year at this time, the AMS voted to step down to associate member status within CASA (the motion passed unanimously). This time however, the vote is not so certain. Much of the conflict has come due to the clumsy way the AMS executive has tried to distance itself from the organization. Most memorably, an email to students sent by VP External Tim Chu, the AMS claimed that “CASA is an organization that has quite a bit of problems. These problems include… Spending more money on cell phones than member relations.” Which would be ridiculous. If it were true.

However, in a meeting with UBC, National Director Arati Sharma said that CASA talked more about the cell phone budget than the member relations budget at their last AGM. Oops. Furthermore, the external office of the AMS, which is in charge of carrying out lobbying, hasn’t exactly been controversy-free in the last few months. It’ll be up to councillors to determine if Canada’s largest student union can competently handle external lobbying without any outside help or affiliation. I’ll have a report up on the decision once it breaks tonight (or, for those out on the east coast, more likely tomorrow morning).

UPDATE: Earlier today, Arati Sharma sent a letter to AMS Councillors and campus media which contained this interesting tidbit:

“In the current contract between the Alma Mater Society of the University of British Columbia – Vancouver, and the Canadian Alliance of Student Associations (point 7 on page 3 of the attached Full Member Agreement), the AMS agreed to the exit provisions of Article 4 of the constitution (page 2 of attached Constitution 2007), which states in 4.10:

“A Full member reverting to Associate Membership or an Associate Member withdrawing from the organization must notify the Board of Directors in writing no less than thirty (30) calendar days in advance of employing the necessary legislative steps in the Member’s constitution or Bylaws.”

Two CASA representatives met with AMS representatives on October 8, 2009 but no notice of tonight’s motion was given. CASA was informed by the UBC Insiders (a campus blog) Twitter feed instead.

Graduates with limited job prospects need help dealing with debt, says CASA

The Canadian Alliance of Student Associations is calling on Ottawa to ease the debt burden for people who are graduating in tough economic times with limited job prospects.

National director Zach Churchill says the government can do some simple things to help recent grads who will, on average, complete a four-year undergraduate degree more than $24,000 in debt.

The alliance argues the student financial-aid system should be more accessible and that tariffs on imported books need to be eliminated.

The comments come after meetings this week with government officials.

The Canadian Federation of Students recently called on Ottawa to increase transfer payments to the provinces in an effort to reduce skyrocketing tuition fees.

- The Canadian Press