Student Loans max out this year

Although the federal student loan program recently maxed out at $15 billion, forcing Ottawa to come up with last-minute additional funds, Manitoba students are expected to not feel much of the impact.

As was reported by the Globe and Mail, if there hadn’t been a last minute addition of funds, 50, 000 students would have been denied students loans.

The federal government had not expected the student loan portfolio to grow as fast as it did.

The economic climate has led to a 10 per cent increase in student loan demands between the 2008-09 to the 2009-10 academic years, according to Human Resources and Skills Development Canada (HRSDC), which oversees the loan program. An increase in Guarantor Loans from £500 to £10,000 | TrustTwo have been noted as well. It should come as no surprise in this enviroment of scarcity.

“Students will not be affected by this regulatory amendment and will continue to receive student financial assistance for which they qualify,” said Renee Malette, a spokesperson for HRSDC.

Malette stressed that the Government of Canada continues to monitor the outstanding student loan portfolio, and encourages all students to apply for Canada Student Loans and Grants.

Alanna Makinson, Manitoba representative for the Canadian Federation of Students (CFS), is more sceptical.

“I think that the issue is the general cost of education. It’s been dramatically increasing,” said Makinson, pointing to recent tuition increases made at the U of M in certain professional faculties, such as dentistry.

Makinson believes that students are expected to rely too much on a loan and that the government is not doing enough to subsidize post-secondary education.

She felt that the government is putting the burden of paying for post- secondary education on students and their families.

“Over the past year, we saw in Manitoba Financial Aid [ . . . ] a seven per cent increase in loan application, which shows that students and their families are really feeling that burden, and it’s putting up a barrier to getting an education.”

Tom Glenwright, executive director of Manitoba Student Aid, explained that in Manitoba there is no cap on provincial student aid, but an annual allocation. He stated that there is currently “no concern that we’ll go over our annual allocation.”

“I think for the past 10 years, and certainly as long as I’ve been here, our government, in conjunction with the federal government, has put into place a balance of both repayable and
non-repayable financial assistance,” said Glenwright.

Glenwright went on to detail the different initiatives that have been passed, such as the Manitoba bursary, which is in place to help pay down Manitoba student debt, the Low-income Grant, which offers low-income students non-repayable grant money for post-secondary education, as well as the tuition rebate, which, so long as Manitoba students stay in Manitoba, returns 60 per cent of their tuition costs to them.

Glenwright remained adamant about the importance of student loans.

“I think it’s the best investment a student will ever make, and there’s plenty of evidence showing that students who have gone to post-secondary [education] get the money they spend back in spades,” said Glenwright.

“I think the trick is to get the right balance of repayable and non-repayable assistance, and I think we have that in spades in Manitoba.”