The
      Cadre
      -
     
    
   
   
    
     
      National
      News
      13
     
    
   
   
    
     
      16
      March
      1999
     
    
   
   
    
     
       
     
    
   
   
    
     
      Ottawa
      considers
      loan
      de-designation
     
    
   
   
    
     
      By
      ERINFITZPATRICK
      _
     
    
   
   
    
     
      OTTAWA
      (CUP)
      —
      Stu-
     
     
      dents
      enrolled
      in
      college
     
     
      and
      university
      programs
     
     
      that
      bear
      a
      high
      loan
      default
     
     
      rate
      may
      become
      ineligible
     
     
      for
      Canada
      Student
      Loans
     
     
      under
      a
      policy
      proposal
      be-
     
     
      ing
      bandied
      around
      Ottawa.
     
    

    
     
      Human
      Resources
     
     
      and
      Development
      Canada
     
     
      last
      December
      released
      a
     
     
      discussion
      paper
      on
      the
      pro-
     
     
      posal
      --
      commonly
      known
     
     
      as
      de-designation
      —
      at
      a
      na-
     
     
      tional
      stakeholders
      confer-
     
     
      ence
      on
      student
      assistance.
     
    

    
     
      Under
      de-designa-
     
     
      tion,
      programs
      would
      be-
     
     
      come
      ineligible
      for
      student
     
     
      loans
      if
      they
      have
      loan
      de-
     
     
      fault
      levels
      above
      the
      na-
     
     
      tional
      average.
      That
      is,
      if
      an
     
     
      unusually
      high
      number
      of
     
     
      students
      graduating
      from
      a
     
     
      certain
      program
      didn’t
      pay
     
     
      back
      their
      student
      loans,
      fu-
     
     
      ture
      students
      registering
      for
     
     
      the
      program
      wouldn't
      be
     
     
      able
      to
      get
      loans
      at
      all.
     
    

    
     
      The
      idea
      is
      that
      gov-
     
     
      ernment
      should
      stop
      spend-
     
     
      ing
      money
      on
      programs
      that
     
     
      don’t
      prepare
      students
      for
     
     
      the
      job
      market,
      says
      Tho-
     
     
      mas
      Townsend,
      director
     
     
      general
      of
      learning
      and
      lit-
     
     
      eracy
      with
      Human
      Re-
     
     
      sources
      and
      Development
     
     
      Canada.
     
    

    
     
      “If
      the
      quality
      of
      the
     
     
      post-secondary
      education
     
     
      you're
      receiving
      doesn’t
      re-
     
     
      late
      to
      the
      labour
      market
      .
      .
     
     
      .
      If
      those
      programs
      aren't
     
     
      good,
      current,
      of
      high
      qual-
     
     
      ity,
      then
      people
      incur
      the
     
     
      debts
      and
      don’t
      get
      the
      ben-
     
     
      efits
      of
      that
      education,”
     
     
      Townsend
      said.
     
    
   
   
    
     
      “Nobody
      wants
      to
     
     
      deny
      students
      access,
      but
     
     
      the
      government's
      got
      a
      lot
     
     
      of
      money
      riding
      on
      [the
      de-
     
     
      fault]
      question
      and
      we
      need
     
     
      to
      look
      at
      what
      the
      best
      why
     
     
      to
      solve
      it
      is...
      Default
      rates
     
     
      can
      show
      us
      which
      pro-
     
     
      grams
      might
      need
      improve-
     
     
      ment.”
     
    

    
     
      But
      Townsend
      adds
     
     
      de-designation
      is
      only
      one
     
     
      option
      the
      federal
      govern-
     
     
      ment
      is
      considering
      as
      a
      way
     
     
      to
      tackle
      the
      loan
      default
     
     
      problem,
      and
      there’s
      no
     
     
      guarantee
      it
      will
      become
     
     
      policy.
     
    

    
     
      Still,
      some
      students,
     
     
      like
      Ashkon
      Hashemi,
      of
     
     
      the
      Canadian
      Federation
      of
     
     
      Students,
      say
      Ottawa
      is
     
     
      wrong
      to
      associate
      quality
     
     
      of
      education
      with
      labour
     
     
      market
      results.
     
    

    
     
      “There
      are
      many
      rea-
     
     
      sons
      why
      we
      should
      allow
     
     
      a
      choice
      of
      programs,
      and
     
     
      getting
      a
      job
      is
      only
      one
      of
     
     
      them,”
      Hashemi
      said.
     
     
      “There
      is
      merit
      in
      getting
      an
     
     
      education.
      De-designation
     
     
      says
      that
      university
      is
      only
     
     
      about
      getting
      a
      job,
      and
     
     
      turns
      post-secondary
      educa-
     
     
      tion
      into
      a
      kind
      of
      crass
      job-
     
     
      training
      project.”
     
    

    
     
      Hashemi
      also
      says
     
     
      de-designation
      doesn’t
      ad-
     
     
      dress
      the
      real
      problem
      of
     
     
      why
      students
      default
      on
     
     
      their
      loans
      in
      the
      first
      place.
     
    

    
     
      “|
      have
      a
      huge
      prob-
     
     
      lem
      with
      using
      default
      rates
     
     
      to
      gage
      a
      program's
      effec-
     
     
      tiveness,”
      he
      said.
      “First
      and
     
     
      foremost,
      defaults
      are
      an
      in-
     
     
      dication
      of
      the
      huge
      debt
     
     
      loads
      students
      face.
      These
     
    
   
   
    
     
      [debts]
      can't
      be
      paid
      back’
     
    
   
   
    
     
      even
      with
      a
      job.
      Default
      is
     
     
      a
      symptom
      of
      the
      larger
     
    
   
   
    
     
      debt
      problem.
      We
      should
      be
     
     
      dealing
      with
      the
      cause
      and
     
     
      not
      the
      symptoms.”
     
    

    
     
      Student
      groups
      aren't
     
     
      the
      only
      ones
      worried
      about
     
     
      how
      de-designation
      could
     
     
      change
      the
      face
      of
      post-sec-
     
     
      ondary
      education.
     
    

    
     
      Robert
      Best,
      of
      the
     
     
      Association
      of
      Universities
     
     
      and
      Colleges
      Canada,
      says
     
     
      he
      fears
      de-designation
      will
     
     
      turn
      public
      education
      into
      a
     
     
      conservative,
      cautious
      en-
     
     
      terprise
     
    
   
   
    
     
      “One
      possible
      out-
     
     
      come
      [of
      de-designation]
      is
     
     
      that
      public
      institutions
     
     
      would
      fear
      taking
      risks
      with
     
     
      non-traditional
      students
      be-
     
     
      cause
      of
      a
      fear
      that
      these
      stu-
     
     
      dents
      might
      have
      higher
      de-
     
     
      fault
      levels,”
      Best
      said.
      “So
     
     
      government
      has
      to
      be
      very
     
     
      careful
      that
      they
      don’t
      put
     
     
      incentives
      in
      place
      for
      insti-
     
     
      tutions
      to
      become
      very
      con-
     
     
      servative
      about
      those
     
     
      things.”
     
    

    
     
      The
      de-designation
     
    
   
   
    
     
      debate
      is
      only
      one
      part
      of
     
     
      ongoing
      negotiations
      be-
     
     
      tween
      Ottawa,
      the
      provin-
     
     
      cial
      governments
      and
      banks
     
     
      to
      come
      up
      with
      a
      new
      risk-
     
     
      sharing
      agreement
      on
      stu-
     
     
      dent
      loans.
     
    

    
     
      Policies
      similar
      to
     
     
      de-designation
      already
      ex-
     
     
      ist
      in
      Alberta,
      and
      are
      set
      to
     
     
      begin
      in
      Ontario
      this
      Sep-
     
     
      tember.
      In
      Alberta
      only
      pri-
     
     
      vate
      hairstyling
      and
      truck
     
     
      driving
      schools
      have
      been
     
     
      affected
      so
      far.
     
    
   
   
    
     
       
     
    
   
   
    
     
        
     
    
   
   
    
     
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