Feds making mint off student loans

EDUCATION Ottawa will pocket $549m in 2009-10

KATE CHURCHILL-SMITH

The Daily News

27/11/2007

RTKNS Note: Here is an example of FOI at work. This one is getting lots of public feedback on the Daily News site. Check it out.

Cheers,

Greg

Pasted from <http://www.hfxnews.ca/index.cfm?sid=83939&sc=89>

Nova Scotia students are shocked that the federal government is making money off their student loans.

A recent access to information request has revealed that the government is charging students nearly double what it costs to borrow the money.

In currency terms, that means the federal government would pocket $549.5 million in interest revenue throughout 2009 and 2010.

Donny Hartt, a fourth-year student at Dalhousie University, found the news troubling.

"The whole reason for getting a student loan is to support myself through school, so when you hear of profit-making over interest, it's not a great feeling," he said.

If those figures were more public, he said, "I'd be more vocal about it."

Mike Tipping, president of the Dalhousie Student Union, thinks these figures mean one thing: "I'd say that the federal government needs to make several changes to the student-loan program," he said.

Students have been wondering why the government is making money off loans for a long time, Tipping said.

That's why the hard numbers are welcome news.

"It's great to have that evidence, said Paris Meilleur, the executive director for the Alliance of Nova Scotia Student Association.

They suspected all sorts of problems with the system, but "none of us have really had the resources to go in and research it all," she said.

Because 60 per cent of student loans are federal, with the remaining 40 per cent coming from the provinces, this news affects students across the nation.

But it has a profound meaning for students in Nova Scotia, said Meilleur: "We place the highest financial burden on our students than any other jurisdiction in North America."

High tuition, few provincial grants, and a weak economy are the main reasons for this, she said.

Nova Scotia has problems with poverty, crime, and even a brain-drain, she said, and accessible post-secondary education is part of the solution.

It was Vancouver's Julian Benedict, who started the Coalition for Student Loan Fairness, that made the access to information request.

Benedict made other discoveries with his requests. The government has recovered more than $1 billion on defaulted student loans, and $180.8 million was paid to collection agencies to gather money.

"It's insane that they spend that much money hounding after people," Tipping said, when the government could be creating a better repayment program.

citydesk@hfxnews.ca

Pasted from <http://www.hfxnews.ca/index.cfm?sid=83939&sc=89>