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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?

20 comments:

Unknown said...

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

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.

Michael Fox said...

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

tara said...

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

AWGB 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.

Michael Fox 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!

CFAC Library 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...

daveberta said...

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

So, what do you think about PSE policy?

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.

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

Michael Fox 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.

AWGB 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.

Michael Fox 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. ;-)

Michael Fox 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.