ews and Features

(CUP)

HE LATEST PROPOSALS FOR udent aid reformare just a means for niversities to increase tuition fees, say ritics of the Income Contingent Loan epayment Plan (ICLRP) and loan pri- atization.

It is not a financial-aid structure ut a funding structure foruniversities nd colleges. It’s a means to an end -- e end beingincreasing of tuition or rivatizing universities,’” says Guy aron,Canadian Federation of Students hairperson.

Caron says the federal govern- ent now favours income-contingency ecause it wants to replace money trans- ers to the universities --which keep uition costs down -- with loans to the tudents themselves.

Caron says the federal govern- nent hopes to get out of the businessof unding post-secondary education alto- ether.”” ;

We link income-contingency to n increase between 40 to 200 percent 1 tuition fees,’ Caron says. ‘‘Ifyou are orrowing, you couldhave a debt of 40,000-60,000 [when you graduate. ]

Supporters of the new repay- lent plan say it is designed to elpstudents afford the full cost of a ost-secondary education, whichhas een getting increasingly more expen- ve and is making post-secondary edu- ation inaccessible for many.

The plan allows for students to

receive the complete amount required for any program of study. Repayment is based ona slidingscale that may favour low-income families.

inancial aid: student groups critical of loan re- ayment proposals

students because funding would begiven to anyone who applies. The government will not perform a‘needs’ test on students who claim they do not have the money for

Under the proposal, students who earn $22,000 or less aftergraduation may not have to pay all of their loan back, whilestudents who earn above this threshold will be required to pay thefull amount.

The ICLRP is to replace current student aid programs, whichrequire that graduates pay back their loans at the same rate --regardless of income -- beginning six months after graduation. People in two very different income brackets now have the samepayments to make.

The push towards replacing the current system with the new plan iscoming from groups like the Ontario Undergraduate StudentAlliance (OUSA), a provincial lobby group.

OUSA says it would be fairer to

university.

OUSA spokesperson Rick Martin says students are being utopian ifthey think the government can continue to keep tuition down bysubsidizing educa- tion.

”*More money is needed for uni- versities. The CFS approach is basedon an idealized notion of what they want the universities to belike,’’ Martin says.

OUSA’ s position is that tuition fees do not account for the bulk ofthe cost of attending university. Instead, OUSA says it is livingexpenses that are high and prevent low-income _ students fromattending university.

But opponents to the plan point out that if tuition fees are low,students can pay for education by working during the summer. They say it will hurt low-income

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students in the long run becausethey will be charged interest on the principal borrowed from dayone. Current loans begin to accumulate interest only aftergraduation.

The income contingent loan in- herently discriminates against lowincome earners [many women and racial minorities] in that it willtake a longer time to pay off their debt and consequently they willend up paying more for their education,’ said Frank Cappadocia, aformer student associa- tion leader at York University.

Cappadocia is also critical of the trend toward loan privatization.’ If [the Ontario student aid program] is re- placed by the ICLRP, accessibility to education will be undermined. The constitution ofthe income contingent approach discriminates on the basis ofprogram of study. Banks will start putting dollar signs onprograms,”’ Cappadocia said.

For example, a fine arts student who requires financial assistancemay be discriminated against because her or his initial earningpotential may not be as high as a graduate from a more traditionalor vocational program.”’

I am critical of the people who ~ will have unlimited informationand re- sources at their fingertips. I fear that if we allow privatization of student loans, there will be CEOs with unlimited per- sonal information and statistical analy- ses to use badly.”’

“ederal announcement of more money a

By Bruce Rolston (CUP) EDERAL STUDENT AID OFFICIALS y they are not responsible for cuts to ‘ovincial student aid programs across € Country.

But student aid administrators in Ntario, British Columbia, and the Prai- © provinces say the cuts are the direct Sult of changes to the federal loan ‘stem, announced last spring, that were €ant to improve the system.

Student aid programs in all prov-

inces use a combination of federal and provincial loans, and in some cases, provincial cash grants.

When the federal government an- nounced last May that the maximum allowance per week would rise from $105 to $165, student leaders greeted the change as an improvement.

But many provinces have now responded to the increase by cuttingback their own provincial loan and grant programs. In Ontario, for instance, the maximum loan allowance for students

has been cut back $60 per week, com- pletely offsetting the federal loan increase.

Students now say they blame the federal government fora promisedincrease that has no real effect on students.

It doesn’t do anything,’’ says Jason Hunt, chair of the CanadianFederation of Students-Ontario. “*There’s not going to be any extra cash in students’ pockets this year.”’

But federal officials say they can- not be held responsible for student aid cutbacks at the provincial level. Spokes-

myth

person Gerry Godsoe says the federal government has carried through on its promise to students.

”We can’t dictate to the prov- inces what they should provide.’ That’s not true, say provincial student aid officials. They say the federal govern- ment is actually only increasing its aid levels for high-need students -- stu- dents borrowing over $7,000 a term -- and cutting back on student loans to everyone else.

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October 4, 1994

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