This website is a testimony to the problems Canadian Student Loan borrowers experienced from approximately 1996 to 2008 and until their loans were paid off.

The privatization of the Student Loans system by the Chretien and Martin Liberal governments broke the system and defaulted thousands of borrowers who were trying to pay their loans. There were even stories of suicide due to the harassment of borrowers.

Read the report that I prepared back in 2007 here. Canada Student Loans-The Need for Change Fortunately the new Conservative government at the time revamped the program and fixed the system for new borrowers, but borrowers under the previous program were left with ruined credit and continued harassment from debt collectors.

I call on the Canadian Government to apologize to the borrowers affected by this fiasco and make amends.

Unfortunately the Liberal government is again clobbering the Education system with their upcoming changes to International Student Visas. Yes, there's a problem, but instead of a well thought out plan, they have pulled the emergency brake on the train causing a derailment. This has introduced unprecedented instability for both private and public education institutions who serve both international and local students.

Universities can't plan. I've heard of courses being cut because the government has no process in place for universities to send the newly required acceptance letters to the government.

This means that students who have been accepted can not attend courses that start in the summer 2024 semester. With cut sections, current Canadian students will have trouble getting courses, and may have to switch to part-time which changes their enrollment status and might trigger repayment of their loans or ineligibility for funding. I've seen this before. It wreaks havoc on the student loan borrowers.

Again, the Liberal government has messed up the education environment. Will the new system needed in a rush for the acceptance letters be the new Arrivecan scandal?

I call on the government to implement a slower phased in approach and delay the requirement of the acceptance letters until a process is in place to submit these letters.


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Forum LockedCTV Story on Collections and Student Loan

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    Posted: 23/May/2006 at 6:01am
Thanks to member frustrated-guy for this info!

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20060522 /student_loans_060522/20060522?hub=TopStories

Ottawa farming out bad student loans to agencies
Updated Mon. May. 22 2006 11:48 PM ET

David Akin, CTV News

OTTAWA -- The federal government is spending millions of dollars to collect outstanding student loans, resources that critics say could be better used to make a post-secondary education in Canada more affordable.

CTV News has learned that Ottawa has signed 176 contracts with 12 collection agencies to collect student loans.

Those agencies earn a commission for every dollar they collect.

The combined value of those contracts is $180.8-million.

The contracts were signed on behalf of the government by Service Canada, a relatively new government department set up by the Liberals last year to be a sort of one-stop shop Canadians could use to access a variety of government programs and services.

In its first six months of existence, Service Canada signed contracts with third-party suppliers worth $217-million, including the $180-million designated for collection agency fees.

"We're the only OECD country that doesn't have a grants system and yet all this money from Service Canada is going to collection agencies. You've just got to shake your head," said Denise Savoie (NDP-Victoria), the NDP's education critic.

Government officials say that while the government must account for and publish the full value of the collection agency contracts, in truth, only a fraction of that amount will be paid out because many of the accounts turned over to the agencies will be uncollectable.

Still, with millions of dollars up for grabs, there is a strong incentive for collection agencies to aggressively pursue each account.

"The first person I dealt with was rude, demanding payment. He told me to go take out a loan, to get my family to get the money, to do whatever I had to do to get the money," said Marcel Wattier, who graduated in 1998 from college owing more than $30,000 in principal and interest on his loan.

The lending bank turned his account over to a collection agency after he had moved and changed phone numbers. The bank believed that, in changing phone numbers, he was trying to evade lenders.

In fact, he continued to make payments on his loan and now owes just $4,000.

Once, a collection agent challenged a decision he made to move, asking why he moved to a place where the rent was more expensive.

"I told them it was none of their business," Wattie said.

Another agent working for the same firm, Accounts Recovery Corp., told him to cash in $1,200 he had saved in a Registered Retirement Savings Plan (RRSP).

"He basically hounded me almost every day for about a month until I finally relented and said, ok, I'll go cash in the RRSP," Wattier said.

He is now working at two jobs to pay off his loan.

"I haven't been able to save any money. I live paycheque to paycheque to paycheque to pay the bills."

The collection agency contracts were signed while the Liberals were in government. The Conservatives have taken steps to transfer responsibility for collecting the loans from Service Canada to the Canada Revenue Agency (CRA).

Diane Finley, the Minister of Human Resources and Development, says transferring the loans to the CRA will be more "efficient" and should cut down on the frequency with which the federal government has to hire collection agencies.

Finley also says she plans to meet with her provincial counterparts and other interested parties to make the student loan system, including re-payment terms, more affordable.

"There has to be a balance," Finley said.

Last week, the C.D. Howe Institute released a report calling on the federal government to change the system so that repayments would be geared to a graduate's income level.

The study's authors say income-contingent repayment schedules would allow students to reduce the risks associated with investing in higher education and increase access for students from low-income backgrounds.
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