NDP
CALLS FOR STUDENT LOANS OMBUDSPERSON
Too many student borrowers fall through cracks of rigid system, says Savoie
OTTAWA – Canada’s students need an advocate to deal with the flawed and rigid student loan system, said NDP Postsecondary Education Advocate Denise Savoie (Victoria).
“Instead of helping students find ways to repay their loans and begin contributing to society, this error-prone system throws borrowers into a spin cycle with no way out,” said Savoie. “And instead of providing a reasonable mechanism to resolve students’ problems, this Conservative government is contracting out to private collection pit bulls whose only incentive is profit.”
Today, a national Decima poll commissioned by the Coalition for Student Loan Fairness shows very strong public support for a federal student loans ombudsperson, with support as high as 86% in Atlantic Canada, 76% in Ontario and 74% in BC. The United States has had an Ombudsman for Federal Student Aid since 1998.
Savoie first asked Human Resources Minister Monte Solberg to consider establishing an independent ombudsperson back in May, after the Auditor General noted that Canada Student Loans is rated poorly in resolving problems to the satisfaction of all parties, and that the federal government does not ensure its private contractors comply with proper collection guidelines for student loans.
“By their own count, only one-third of student borrowers who encounter problems with the system are satisfied with how their problems are resolved,” said Savoie, referring to a 2007 client satisfaction survey by the National Student Loan Service Centre (NSLSC).
Savoie said she frequently hears from students whose files are mishandled between government, service contractors and banks. The system is too inflexible to rectify its own errors and penalizes students unfairly. Students with extenuating circumstances are denied access to debt relief measures. Yet others report being verbally abused and bullied by private collection agencies hired by the federal government.
“The overwhelming debt burdens we ask students to bear are unconscionable,” said Savoie. “They struggle just as they begin their careers, and they need some flexibility and understanding that this system does not provide. Some are forced into legal proceedings to reverse simple administrative errors that have snowballed out of control. An independent student loans ombudsperson is the best way to objectively resolve these issues and ensure that students are treated with fairness and respect.”
Savoie re-iterated her insistence that the Minister’s current review of the student loan system be opened to wider public input, and expanded to address the multiple flaws that leave so many students behind.
