Student Loans - Midterm Flashcards
1
Q
Current Situation
A
- Students are facing record high debt, lack of employment and taking lower jobs to pay off dept
- Student fees are 160% higher than in the 90’s
- Education is a public good
2
Q
History of Student Loans
A
- Originally started with a cost-sharing model between the province and federal government in the 60’s
- Canada Student Finacial Act allowed students to get higher loans to cover higher tuition costs
- in 1996 there was the Health and Social transfer, reducing provincal accountability for the mony
- Current federal funding is 2.4 billion less than in the 90’s, increasing tuition fees to make ip the difference
3
Q
Cost of Student Loans
A
- Student loans are estimated to cost the government 22 billion by 2030 in productivity costs
- Students with debt are less likely to work in jobs they have studied for leading to skill degration
- Less than half of students with student debt under 30 are still living at home with their parents
- Average student owes 25,000 on graduation
- RESP’s only benefit those with higher incomes
- Student who take out loans are paying more for their education due to interest rates
4
Q
Benefits of reducing Student loans
A
- Increase in productivity costs
- Larger income tax contribution
- Less impact on social services
- Better quality of life
5
Q
Newfoundland
A
- Moved to grant-based student loans
- Cost 50 million over the next five years but boost productivity in the economy
- Well-educated labour force
- Students will save 10 grad each in student debt
6
Q
Nova Scotia
A
- Eliminates the provincial interest on student loans
- Costs the province 1.6 million annually
- Students must be working within the province to reduce rate
- Federal government eliminated the Retention Tax Rate previously
7
Q
Proposed solution:
A
- Federal and Provincial government split the tuition costs
- Large up from cost, but provinces will make more in the long run due to income tax
