Taking Notes: Eye On Education – Increased Loan Limits

This column focuses on a wide range of issues affecting post-secondary students. Students are encouraged to submit suggestions and educational topics they are concerned about, or personal experiences with courses or university situations they feel other students should know about. If suggest a topic or a course alert for Taking Notes, contact djabbour@ausu.org

INCREASED LOAN LIMITS

The Federal government has announced that, in order to allow students to borrow more money to help cover the rising cost of post secondary education, student loan limits will be increased for the first time in a decade. The current loan limit of $165 a week will rise to either $210 or $235, allowing students to borrow up to a maximum of $13,294 a year instead of the current cap of $9,350 – a borrowing increase of 42 percent. The increase in federal loan limits will also require an increase to provincial contributions (except Quebec) in order to match the 60/40 funding share.

According to some estimates, at least one-fourth of students are unable to manage within the current lending limits and are turning to private loans and higher interest rates to fund their education. Since the limits were established in 1994, federal and provincial funding of PSE has dropped dramatically, while tuition and related academic fees have risen by 99 percent – from an average of $2,023 to $4,025 a year across Canada!

What does this loan limit increase really mean? A 2002 study indicated that among students who must borrow money to attend university, average debt at graduation is at least $21,000. An increase of 42 percent in loan money will mean a corresponding increased debt at graduation – burdensome debt loads that many students are already finding impossible to manage.

Increasing student loan limits not enough, education critics say: Rising costs will leave graduates further in debt. Sarah Schmidt, CanWest News Service, Ottawa. Edmonton Journal, February 25, 2004.

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