Christopher Radojewski | Fulcrum Staff
THE GOVERNMENT OF Canada has sounded the alarm to Canadians from coast to coast to coast: It is time to get rid of debt. Personal debt for Canadians is growing excessively, and if not curbed, it will hit dangerous levels. The government has asked Canadians to address their personal debt. Likewise, debt has been a major subject of debate in the House of Commons since Members of Parliament returned to Ottawa on Jan. 28.
Yet with all this talk of debt, students have not been mentioned. Oddly enough, considering most Canadians’ first experience with debt tends to come as a result of their post-secondary studies. The Canadian Federation of Students suggests the average student graduates with $37,000 of debt. From there the debt just seems to grow.
Post-secondary education continues to be a worthwhile investment, but as living costs and tuition grows and the student wage remains stagnant, the gap in between increases. So if the government wants to get serious about addressing debt, they need to start talking to students and putting certain measures in place to ensure debt doesn’t explode from there. However teamwork between students and governments is required to address debt. Students can’t just rely on governments to fix their problems.
Firstly, students must realize they have a role to play in their own finances. A bit of planning ahead of time is not a bad idea; you can even budget for beer money. Still, you will have to cut out some of the more lavish items if you want to cut your costs. Hello no-name brands.
Secondly, the government can help out in some significant ways. Although the provincial governments are responsible for education, the federal government can help financially by lending to students because it has more taxing power than the provinces, and therefore has a bigger income. Ottawa already contributes to provincial student loan programs.
Increased attention toward the student loan program and grants for education would definitely help students afford education, but even student loans can be a slippery slope toward long-term heavy debt.
“We need to make sure that the governments don’t make money anymore on the student loan program,” said Bob Rae, interim leader of the Liberal Party of Canada following Question Period on Jan. 29.
“Right now both the federal and provincial governments make a profit on the student loan program,” said Rae. “They can afford to lower the interest rates on student loans and they can afford to make serious changes in the way the program is administered.”
Rae further mentioned that lower to middle income students are the ones who are at risk, particularly when it comes to paying back student loans. Considering that there will always be a price on education—because it costs money to pay professors, administration, and to maintain buildings, etc.—grants and low to no interest rate loans from governments are the way to go.
At the end of the day, students have to take care of their finances for themselves. The state is there to help, but it is up to the student to budget for their education. However, if the government wants to get serious about keeping a strong economy by lowering personal debt, it needs to do its part. Why? A $1,000 debt is easier to repay than a $10,000 one.
5 Second Rule
A late Roby Burns Day celebration for MPs on Parliament Hill became turbulent as haggis hit the floor. The fall was not the result of any food fight between MPs but instead a slip by Rodger Cuzner, MP for Cape Breton-Canso. Despite the tumble, the haggis was still edible and tasty.
I miss you, Penny
February 4 marked the end of the penny. Although the Royal Canadian Mint stopped producing pennies in May 2012, the official circulation didn’t stop until now. Pennies are still legal tender but not all business will accept them. Banks, however, will continue to accept the pennies.
Inquiry for Students
Since there was a breech in information of 583,000 former students who used student loans, the opposition is demanding an inquiry be launched into the nature of and reasons for the breach of information. Diane Findlay, minister of human resources and skills development, stated that the breach is being investigated and steps have been taken to ensure greater security for information.