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Wednesday, September 07, 2005

debt is good: hancock

From the Calgary Herald...

[Advanced Education Minister Dave] Hancock disagreed that graduating with student debt totalling as much as $20,000 is unacceptable.

"It's the best investment you'll ever make," he said, adding it took him a decade to repay his student loans.
So, at what point did personal debt become good and government debt become bad?

28 comments:

Kevin said...

The PCs in Ontario made the same dumb argument a few years ago.

v said...

Great post Daveberta! We must hold all levels of government accountable for this! You can count on Anonalogue to support your pro-student agenda!

tara said...

i just graduated with a $50,000 student loan from the government. the minimum payment a month is $600. so i recently started a letter writing campaign to every fucking MP and MPP out there.
i encourage others with a similar amount to do the same, especially if you're from a low-income family like me.

Toronto Tory said...

Tara, serious question - what did you take to rack up that kind of debt - a bachelor and a master's?

v said...

daveberta, who is in charge of liblogs? There is no name, no email, and one of the liblog bloggers - well, just tell me who I can speak to about anonymous libellous Liblog bloggers who don't allow comments on their blogs or post emails addresses. I'm not sure if you understand that is a "bad" thing, or even if you care, but trust me, it is, and it needs to be dealt with.

Sorry to bring this up here, but I'm not going to "register" at liblogs to complain.

tara said...

yes, a bachelors and a masters. and that's with millenium scholarships and the like. it's scary, but hopefully worth it.

Aaron said...

Tara: Don't forget to add to that the 40 months of foregone income, assuming you had some full-time job opportunities along the way.

Toronto Tory said...

I rang up $20,000 in debt when going through university, and it was worth it.

It's more important to me that everyone have access to the funds to at least borrow so that they may have access to education. I know there are societal benefits, but there were also immense benefits to me.

I think it'll pay off for you in the long run tara.. at least, I hope so. :)

daveberta said...

Toronto Tory: I don't think taking out a $20,000 student loan equals accessibility. It's only borrowing so you can pay back later. Accessibility should be tied to affordability. Student Loans are just another form of financing. The societal benefits of graduates convocating with lower debt, rather than $20 to $50 thousand debt are hugely more benefitial.

Not only that, but the economic reprecussions of having $20,000 to $50,000 worth of student loans upon convocation. How can someone with that much student debt have access to credit cards or home mortages? Small businesses?

It's basically starting off an entire generation with a handicap!

The fact that tuition has risen extremely high in a short period of time sends a strong message about how low of a priority PSE has been to Provincial and Federal governments in the past 15 years. In Alberta alone, PSE tuition costs have risen by over 298% in the past 10 years. This was basically a sideaffect of the 24% provincial government cutbacks to PSE at the same time the system grew by nearly 20%. Tuition does not and should not be unaffordable.

daveberta said...

Anonaducky: Hmmm. Interesting. Not quite sure who you'd contact. Freethought.ca hosts the site, maybe they'll know who you could contact...?

daveberta said...

Tara wrote: i recently started a letter writing campaign to every fucking MP and MPP out there.
i encourage others with a similar amount to do the same, especially if you're from a low-income family like me.


Hey Tara, I agree. Good for you for writing to politicians. Quite a bit of my work related stuff has to do with Student Loans and the PSE system, so I more than definately share your concerns and have done my share of letter writing as well. Keep up your letter writing!

v said...

So...you are part of the "Liblogs" blogroll, and you have no idea who runs it. And you can't even give me an email adress to contact.

Very, very strange way you Liberals go about things. Is this some kind of joke? Is this your final answer?

holtopia said...

The truth of the matter is this:

"Nine naked men just walking down the road would cause a heap of trouble for all concerned!"

daveberta said...

"Nine naked men just walking down the road would cause a heap of trouble for all concerned!"

Indeed.

Anonaducky: It's just a blogroll, not a gun registry. ;-) Howbouts you email Mr. Cherniak? I'm sure he's up for the challenge...

v said...

So Holt Renfew, you are OK with the situation I have described? Please, go ahead and show the world your support of the supersecret supernonaccountable LibLogs g6m3rZ klan and the lame excuses their members come up with! Jolly good show!

This is probably beyond your comprehension, but secret liberal "blog" rolls which spread hate, lies, etc. supersecretly with no accountability? That's somewhat of a bad thing. And pretending it ain't happening or defending it reflects poorly upon your character. Believe it or not, Carebear, sometimes Liberals do not-so-nice-things. Yeah.

v said...

Actually you know what Dave? After reading your comment above, just forget I mentioned this, OK? At least I can say I tried to deal with this civilly. I have no quarrel with you my good man but some Liberals need to feel the full weight of the deadliest weapon known to mankind:

Photoshop.

I look forward to a spirited election campaign in the coming months.

daveberta said...

sure... and photoshop does rock in many ways.

So, what do you think about PSE policy?

v said...

'So, what do you think about PSE policy?'

I've written about it quite a bit. To me, the concept of student loans make about as much sense as health care loans. A student loan is analagous to saying to a kid who just turned 18:

"Here's your bill for all that health care we gave you for the past 18 years, kid. We know you couldn't pay for it, being a kid and all, so being the swell guys that we are we lent you the money at prime plus one!

Regrettably for you, this meant 9%, which according to our handy 72/i rule means your principal doubled every eight years! Pretty sweet, eh? Hahaha! Hahaha!

And if you can't pay? No biggie. It's actually the banks who make windfall profits on this; we just get involved when you can't pay. So the taxpayer gets screwed, you get screwed, the government, Canada, everybody gets screwed except the banks who, not incidently, are lending the Liberal Party of Canada money for the upcoming election because nobody wants to donate to them. And the best part? Nobody even notices we're running the scam! Nice racket, eh? Hahaha! Hahaha!"

Of course, it's not a perfect analogy. Some lesser life forms for whom I frankly have no more patience probably won't get the point, but there you have it.

daveberta said...

Interesting analogy.

Though public student loans (excluding Quebec) are split 60/40 between the Fed/Prov SL programs.

PSE, being a responsibility of the provinces, has some interesting funding issues. Funding Per-FTE has fallen in many provinces (in Alberta being $14,000 in 1993 and $10,200 in 2004).

The rise in tuition across the country in the past 10 years happened at the same time funding was being cut by the prov and fed gov'ts.

v said...

"Though public student loans (excluding Quebec) are split 60/40 between the Fed/Prov SL programs.

PSE, being a responsibility of the provinces, has some interesting funding issues.."

Zzzzzzzzzzzzzzzzz...

Thanks for explaining to me things I learned in first year Poli-Sci class many, many years ago! Hahaha!

I say more money per student, substantially fewer (university) students, and rigorous, ball-busting standardized undergraduate admissions exams. And the "1+1=racist+sexist" crowd can kindly fuck off, please.

daveberta said...

sure, but my point was that just because it's a provincial responsibility, the feds are also entwined in the system.

What would have those who didn't make the admissions exams do?

Also, keep it civil, we don't enjoy the cursing in the daveberta zone.

D

Toronto Tory said...

Daveberta, you said:
"Toronto Tory: I don't think taking out a $20,000 student loan equals accessibility. It's only borrowing so you can pay back later. Accessibility should be tied to affordability. Student Loans are just another form of financing. The societal benefits of graduates convocating with lower debt, rather than $20 to $50 thousand debt are hugely more benefitial.

Not only that, but the economic reprecussions of having $20,000 to $50,000 worth of student loans upon convocation. How can someone with that much student debt have access to credit cards or home mortages? Small businesses?

It's basically starting off an entire generation with a handicap!"


I say:
Dave, fair arguments, and arguments I've heard before. What we have here is a difference of opinion. I came from a poor background, and I was happy just to have the opportunity to go to university.

My last year in school I think the tuition was around $5000. The total cost of a year of university (rent, food, etc.) was estimated at $13,000. Last year one of the parties (was it the Liberals or the NDP?) ran on a pledge to reduce tuition by 10%. That's a reduction of $500 on a total cost of $13,000. What would hurt more - not having the $500, or not having access to borrow the $13,000 and therefore not being able to go to school at all?

I sympathize with your point of view, but I don't think *free* tuition is workable. I see many more issues with the setup of the CSL/Provincial student loan systems that I would give much higher priority to.

Aaron said...

Let's pretend that overnight, Jack Layton and the gnomes of the bank of Canada print off enough money to have free tuition to all who enter the hallowed halls of learning.

I, for one, would be dead set against this. The thousands I have paid in tuition have funded capital projects and such at my university and I'd still be stuck with my debt.

Tuition reductions are a totally inequitable solution. Debt and interest relief is far more workable.

daveberta said...

1. With tuition costs falling under the responsibility of the Universities and Provincial governments, I find it hard to believe that a Jack Layton Government could do much of anything to reduce tuition without getting into a nasty fight with the provinces over juristiction.

2. I don't think roll-backs are bad. I don't support long-term tuition freezes or "free" tuition, but I think restoring provincial funding levels to pre-cut times would at the minimum be appropriate, as would a roll-back with tuition tied to some something (CPI?).

Throughout the 1990s, tuition has risen at over four times the rate of inflation and far outpaced the growth in family income. The current cost of one year in an Alberta university exceeds $14,000, but the average summer wage of a post-secondary student is only just over $4,000 .

The benefits speak for themselves, students are not the only ones who profit from a university education. Society benefits as well. In 1999, university graduates made up just 15% of Canada's population, yet they paid 35% of the nation's income tax and only received 8% of government transfers to individuals.

And consider this: Members of the U of A graduating class of 2002 who stay in Alberta to work will spend $7.7 billion in the province during their lifetimes, not including the income taxes they pay.

U of A graduates as a whole return seven times the province's investment in their education when you look at the salaries they earn and the income taxes they pay.

This disparity increases as the government provides less funding per student.

Toronto Tory said...

Throughout the 1990s, tuition has risen at over four times the rate of inflation and far outpaced the growth in family income. The current cost of one year in an Alberta university exceeds $14,000, but the average summer wage of a post-secondary student is only just over $4,000 .

16 weeks * 40 hours * $8 = $5120. Anyone earning $4000 should be doing much better. There are better jobs out there.

The benefits speak for themselves, students are not the only ones who profit from a university education. Society benefits as well. In 1999, university graduates made up just 15% of Canada's population, yet they paid 35% of the nation's income tax and only received 8% of government transfers to individuals.

I agree, but I still think at least a portion of the cost needs to be borne by the students themselves.

U of A graduates as a whole return seven times the province's investment in their education when you look at the salaries they earn and the income taxes they pay.

This disparity increases as the government provides less funding per student.


Therefore, you're saying providing more funding would reduce the disparity. Doesn't that mean the province's investment wouldn't return as well? How much should we invest? Should we invest to the point that there is no positive return on investment?

(I just realized how far off topic we are from your original post, but then your original post sucked, didn't it?) :)

daveberta said...

"16 weeks * 40 hours * $8 = $5120. Anyone earning $4000 should be doing much better. There are better jobs out there."

Well, those are Statscan and Millennium Foundation numbers...

And yes, we did get a little off topic.

BTW: there's no such thing as a post that sucked. ;-)

Sam said...

I'm not sure where those better jobs are. Between the ages of 18 and 20 the majority of people I know are working customer service jobs and it's hard to find a service job over (or even at) 8 bucks an hour, nevermind a service job that will give you forty hours a week. I had to work three one summer just to get forty hours a week.

Toronto Tory said...

Even Tim Horton's pays over $8 an hour in many parts of the country now.

Any grocery story will also pay well over that.