Expert says loans program works well, but could improve
A labour economist who is an authority on student loans says the Canada Student Loans system and its provincial counterparts are generally doing a good job, but could be improved.
In a speech on tuition and access, delivered to about 60 people in Convocation Hall Sept. 27, Ross Finnie, of the Queen’s University’s School of Policy Studies, said his detailed study of students’ perceptions of student loans shows that most people who want to enrol in post-secondary education are able to, and the student loans system helps many to attend.
While student borrowing and debt loads have increased over the past 15 years, Finnie concludes from his study and Canada’s high post-secondary education participation rates that “the Canada Student Loans Program is a pretty good success … I think the program is doing a good job and is reasonably well-targeted.”
But, he said, if he had his way he would tweak the program so it provided more money to students, but those in lower-income families would get rebates. He said the system would do an even better job if universities were allowed to gradually increase tuition fees and students could get more loan money, eased by progressive grants to help poorer students.
Finnie said it’s important for individuals and for the country’s economy to ensure access to higher education. The individual benefits personally, and society benefits from better overall economic performance.
He said his study shows that family background has the biggest effect on whether people attend university.
Canada has one of the highest post-secondary education participation rates in the world. Finnie said figures show that about 60 per cent of Canadian men and 70 per cent of women have attended university or college. While 43 per cent of non-attenders say they didn’t go because they’re not interested, just 17 per cent said they didn’t attend for financial reasons.
About 40 per cent of students get loans, and two-thirds of them say the loans allowed them to attend a higher education institution. And Finnie said figures show there is demand by those getting loans to borrow even more money. The average debt-load today for graduating students is $18,000-20,000.
Finnie said he concludes that student loans are helping people and they are fairly well targeted. He said there is a need to protect low-income students, and some needs-based grant programs address that.
He said he would allow universities to slowly increase tuition fees, but would also increase the amount of loans available to students. Then he would require families earning more than $100,000 per year to repay the full loan and interest amount; families earning less than $50,000 per year would get a full rebate of the loan amount; and those earning between $50,000 and $100,000 would get a sliding-scale rebate, based on income. Families earning more than $150,000 would pay back the loan plus a tuition surtax.
Everyone wins, Finnie said: the universities get more income and can then provide a higher quality education; the students pay more, but get a better-quality education; no one is excluded from attending higher education; and low-income people are protected.