This is quite possibly a step in the right direction. The federal government is writing off more than $200 million in outstanding student loan payments that officials will never be able to collect.
Recently released spending documents show the government won’t collect $203.5 million in debts from 34,240 students.
It is the third time in the last four years that the government has had to write off outstanding student loans even as officials are attempting to get better at their collection efforts.
The government annually has to write off some of the $19 billion owing in student loans for a number of reasons: a debtor may file for bankruptcy, the debt itself passes a six-year legal limit on collection, or the debtor can’t be found.
The Liberals have looked to make it easier for graduates to pay off their loans – and the government to collect the cash – by increasing the minimum annual income they have to make before they are required to make debt payments.
The limit is now set at $25,000.
Last year a poll conducted by debt firm BDO Canada found that about 77 per cent of Canadian graduates under 40 have some regrets about the money they spent while in school.
Canadian students still need to either shell out big money or rely on government and private loans to finance their undergraduate degrees. In fact, students have been left with a collective debt of $28.3 billion according to a 2012 report from Statistics Canada.
Ontario remains on top for average tuition costs (it cost $8114 on average in the 2016/2017 year) but remains in the middle of the pack when it comes to average student debt (roughly $27,000 according to 2010 Stats Can data).
B.C. has a higher average debt to tuition ratio, meaning that for the amount they pay in tuition fees, their debt loads are pretty high.
With the cost of borrowing going up steadily, it is going to be even more challenging for students seeking student loans. The debt problem will only get worse because students coming out of universities in debt have difficulty finding good employment prospects. Many end up working in unrelated fields until they get a break in their own field. The problem is that skills get rusty or the industry changes which leaves them with a terrible choice-going back to school and getting further in debt or changing their profession and paying off their student debt. It is a loss either way of an education that didn’t get used and adding insult to injury are legions of students forced to pay back loans for a degree that didn’t take them very far. -CINEWS