Feds have raised ceiling on students’ debts

July 15, 2015   ·   0 Comments

Students could be looking at more trouble when it comes to the debt they could accumulate and the burden they would face trying to pay it off.

This spring, behind closed doors, the federal government made the decision to raise the limit on federal student loan lending to $24 billion, increasing the debt rather than taking steps to alleviate the financial hardship most students will face after graduation.

News of this decision broke last Thursday, July 9, when a press release regarding the government’s secretive changes to the student debt ceiling was sent out by the Canadian Federation of Students. The changes are highlighted as an example of what some consider the Harper government’s disregard for Canadian youth.

“Forcing students to take on debt in order to pay for a post-secondary education is bankrupting a generation,” said Bilan Arte, National Chairperson of the Canadian Federation of Students.

“The federal government should be taking steps to reduce the cost of post-secondary education, not bury students further in debt.”

Prior to the May 28 decision, the lending cap was $19 billion, but Ministers Pierre Poilievre and Joe Oliver made the $5 billion amendment, increasing the cap to $24 billion. In a recently released report from the government, a number of reasons were cited for the increase, yet failed to acknowledge the root cause of the increasing crisis surrounding personal debt, held by a growing number of young Canadians. That root cause, unsurprisingly, has been the 41 percent increase in tuition fees over the last 10 years.

According to the press release, unreleased data cited in the government’s report estimate that the previous limit would have been reached as early as January 2016, five years earlier than the original prediction of 2021.

“Increasing the student debt ceiling is a band-aid solution to a crisis that is the product of a woefully underfunded system of post-secondary education,” said Mr. Arte.

“This government has allowed post-secondary education in Canada to become increasingly out of reach for low- and middle-income families. This is not the kind of legacy they should want students to remember on October 19.”

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