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Wednesday, September 06, 2006

debt please, mr. dryden?

This week, federal Liberal leadership candidate Ken Dryden unleashed his vision for "A Big Canada." I didn't read most of the document, but I skipped forward to the education portion.

I was shocked to see this included:

(a) We will establish a national income-contingent student loan repayment program (ICLR) to help individual youth and mature students finance their post-secondary education.
Income-contingent loan repayment (ICLR) is a bad bad idea, Mr. Dryden. These types of systems serve as methods of shifting the cost of post-secondary education away from the government (who should be properly funding the post-secondary education system in the first place) and on to students.

As well, income-contingent loan repayment schemes result in those with lower incomes paying substantially more for the cost of their education due to lengthy payment periods mixed with increasing interest payments.

Mr. Dryden needs to take a look at jurisdictions such as New Zealand, Australia and the United Kingdom that have income-contingent loan repayment schemes and have seen a corresponding and dramatic increase in tuition fees and other education costs since the implementation of this regressive system.

Instead of implementing an income-contingent loan repayment scheme, I would suggest that Mr. Dryden look at creating and implementing a dedicated post-secondary transfer payment from the Federal Government to the Provinces that will deal specifically with tuition levels - which leads to high debt and is the most direct cost that governments can affect. Proper investment in PSE will make regressive schemes like ICLR even more useless than they already are.

Time to step up to the plate, Mr. Dryden.

4 comments:

knsheppard said...

As a graduate of the Canadian system, I couldn't agree more with your suggestion.

Anonymous said...

Although I'm one of those horrible baby boomers (we didn't get help of any kind). I agree with you.

But, I think they have to some how think of another route. I don't have a clue what it might be, but the old tried and true hasn't worked. I think the whole education system needs investigation. Why are tuitions so high? Teachers perhaps? They demand and demand and demand - it needs looking into.

How about some sort of work programme - you are helped with your tuition and you work for very little (livable wage) for a couple of years say for the government to keep their costs down. Sounds stupid, I know, but there has to be a change.

Steve said...

Can succinctly make the case for federal transfers for purposes other than equalization? I'm very confused as to why so many people think things like a dedicated education transfer are good ideas.

Anonymous said...

I'll play devil's advocate here:

These types of systems serve as methods of shifting the cost of post-secondary education away from the government (who should be properly funding the post-secondary education system in the first place) and on to students.

Not necessarily. As long as controls on tuition levels remained intact, or were put in place, there's a compelling argument that ICLR would be an improvement over the current repayment scheme.

As well, income-contingent loan repayment schemes result in those with lower incomes paying substantially more for the cost of their education due to lengthy payment periods mixed with increasing interest payments.

I hate to break it to you, champ, but people who make more money already can pay off their student loans faster.

The selling point of this program is that rather than being burdened with $400 monthly payments regardless of income or employment status, it allows graduates to pay back their loans when they can most afford it. A clause forgiving the loan after a certain period of time (which Bob Rae recommended in his review of Ontario's system) would solve the problem of lower-income earners being burdened for too long.

Mr. Dryden needs to take a look at jurisdictions...have seen a corresponding and dramatic increase in tuition fees...

Therein lies the problem. These jurisdictions introduced ICLR at the same time that they dramatically increased tuition. I never understood why student leaders seem to assume that one has to go hand-in-hand with the other.

Proper investment in PSE will make regressive schemes like ICLR even more useless than they already are.

Having to pay more back to the government as you earn a greater salary is regressive? You should talk to this guy. The two of you would get along swimmingly.