Rites of summer: Sun, sand, festivals and student loans.
If students are not filling out the often tortured forms they are probably looking forward to repaying that ball and chain debt.
While graduates are saddled with increasing debt, their ability to pay it off is decreasing. Jobs for graduates are harder than ever to find and employment income is lower, relatively speaking, than 20 years ago.
The loan system is particularly harsh for rural and small town students whose costs to attend college or university are much higher than city kids with a range of post-secondary options.
Here’s my modest proposal for fixing the student loan crisis.
• Students with no post-secondary institution within a reasonable commute receive a grant to level the playing field with those who are able to live at home and attend school. If they don’t graduate the grant must be paid back.
• Outstanding student loans are reduced by 10 per cent upon graduation.
• Loan (both provincial and federal) interest rates to be capped at two per cent above prime.
• In bankruptcy, student loans to be treated like any other debt. Currently loans cannot be discharged for 10 years after the last class or semester the student takes.
Yes, this would reduce interest rate revenue for banks and the government and cost a bit in terms of grants. However, financially healthier students and graduates will pay more tax and buy more stuff. And fewer delinquencies and defaults will reduce the burden on government and lenders.
