Business booming because of loan defaulters By John Gushue of Canadian University Press OTTAWA (CUP) — Business is booming for the credit agencies the federal government employs to collect outstanding student loan debts. The number of students who have failed to make payments has doubled since 1982, when 12,000 defaulted on their loans. Ac- cording to Ted Kubacki, manager of the Canada Student Loans Programme, as many as 25,000 students could default this year alone. To retrieve missing payments, the government uses thre lection agencies — Associated Credit Bureaus of Canada, FCS International Limited, and Cana dian Bonded Credits — to track down defaulting students and ask them to come up with the money With fewer grants, higher loans, increased costs, and slimmer job prospects upon graduation, the situation for students threatens to become worse: col- But for Kevin Belgrave, manager of Associated Credit Bureaus’ head office in Toronto, business is brisk. ‘‘We’re probably deal- ing with about 13,000 cases right now. We have at least one person, and maybe two or three in larger ~ centres, handling Canada Student Loans in each of our 114 offices. Things are working out very well for us indeeded,” he said. Because the federal government guarantees its loans, banks are less interested in helping debtors pay off an outstanding balance. Instead, says Hugh O'Reilly, assistant to NDP MP Dan Heap, “the banks seem a little trigger happy, in turning the loans over to a collection agency.”” As soon as a bank turns a student’s account over to a col- Jection agency, the bank collects its money from the government. The federal government seis guidelines that collection agencies must respect when dealing with debtors. “First of all, they have to gain the co-operation of the debtor,”” Kubacki said. Students cannot be ‘verbally harassed, called at work, called at parents’ homes, or encouraged to take out more loans. But Barb Donaldson, chair of the Canadian Federation of Stu- dents, said collection agencies are repeatedly profiting at the expense of students. “At the best of times, they operate on this side of the law,” said Donaldson, who worked for acredit company one summer. “*Yet they somehow manage to get away with those things because students don’t know their right under the law,”’ she said. Donaldson said a common violation many credit companies make is listing a client’s student loan history in her or his credit file. ‘‘They’re not supposed to do that, and they know it,” she said. In the House of Commons March 11, Liberal MP Lioyd Axworthy (Winnipeg-Fort Gary) asked if the government endorses “a general pattern of harassment of those who are benefiting from student loans.”” Youth minister Andree Cham. pagne said, “1 am not aware of this being a policy in any way,” and promised to bring matter to Secretary of State Benoit Bou- chard’s attention. Axworthy heard several cases of debtor harassment, including a complaint laid by ‘a young woman with a small child (who) had repeatedly tried to negotiate a long-term loan payment sche- dule with the bank and collection agency” but was still being harassed. “This is not an isolated case,’” Axworthy told the House. Donaldson said most banks are intolerant of student clients. “There are a few banks I can name that are very patient, but I think the majority would rather not give you the time of day, let alone the same amount of coun- selling you’d receive if you were someone else,” she said A former York University stu dent who asked not to be identi- fied said one collector tracked her down to an office where she was working, although she said he had ‘‘absolutely no idea who they found that one out.” Belgrave said his collectors “find telephone work elicits the best response. It’s long and tedious work, and the largest hurdle is to locate the debtor. That’s our big problem.” Belgrave insisted his collectors remain with in legal jurisdiction, “They have guidelines over what "we can and can not do,” he said. Kubacki said it’s ‘‘unfortunate”’ when a collector harasses a debtor, but “‘it’s not a common problem. It happens from time to time (and when it does) we con- duct ourselves in the proper manner. According to Belgrave, col- lection agencies are working to everyone’s benefit. ‘Things have improved, certainly because the government has put this in the hands of private industry, which in the long run benéfits everybody.”” debtors are helped. “The graduating stident today has a much bigger joan than five years ago, and has a much greater debi to pay. The cost of every- thing has risen ... but things are happening very well ri hesaid. ; Donaldson said student leaders don’t like to talk about defaulters He said ev “because it makes students look , bad. But it can be connected to other things — unemployment, low income jobs, and enormous debt loads. hiadewind Of the Field and Stream Club “WHERE THERE ARE NO STRANGERS, ONLY FRIENDS YOU HAVEN'T MET” MONDAY & TUESDAY SUPER HAPPY HOUR ALL NIGHT WEDNESDAY .& THURSDAY HAPPY HOUR 8:00 TO 10:00 P.M. 10 Ft. 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