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The Study in Brief
Postsecondary education is of increasing importance to both Canada s international competitiveness and individuals career success. Are the Canada Student Loans Program and its provincial counterparts doing a good job of enabling Canadians to pursue college or university education without undue financial stress?
The most recent data available (the class of 1995) indicate that fewer than half of all college and university graduates held student loans, that two years after graduation individuals had paid back an average of 40 percent (or more) of these debts, and that only 10 to 15 percent of all graduates reported difficulties with repayment. An updating of the record to the present would likely yield only moderate changes to this profile.
The general picture is, therefore, quite good -- at least in terms of current debt levels not being overly burdensome for most graduates. But the system could certainly be improved. Policymakers should consider:
* increasing the eligibility for and limits on student loans for those who need the money;
* further expanding current interest-relief and debt-reduction programs for individuals who face repayment hardship, a group that includes not only many unemployed but also part-time and even full-time workers in lower-paying jobs;
* favoring assistance to most students in the form of loans, while targeting grants on those from low-income families for whom debt aversion is a significant problem;
* enabling further research into how many Canadians have been able to pursue postsecondary education because of student loans and, conversely, how many potential candidates have not studied because they could not get loans, could not borrow enough, or were unwilling to take on the debt load.
Policymakers should also inject resources into the badly strapped postsecondary education system through a "revitalization social contract." Each principal stakeholder -- the federal government, provincial governments, and students themselves -- would put an additional $1,000 per capita into the system. Students would pay their share through increased tuition, but those who needed aid would receive assistance through grants and the enhanced loans program proposed in this Commentary.
For almost 30 years, the Canada Student Loans Program (CSLP) and its provincial counterparts have helped millions of Canadians attend college or university and thereby achieve major career and life goals. But...