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Student loan deadbeats are such an irritant in the government’s education craw that both the province and the feds have gone to great lengths to get this growing body of defaulters to pony up the dough. The Ontario Postsecondary Review discussion paper floated by former premier Bob Rae estimates that 30 per cent of college grads and 24 per cent of university grads are having problems paying back their loans.
This means a large number of poor young Ontarians are experiencing the threatening phone calls from collection agents that come when they fail to remit what’s owed on their loans.
Within three months of non-payment, a student debtor’s file can be transferred from the bank to the province, which then sics its private collection agency pit bulls on the poor unsuspecting OSAPed-to-the-max student. These smash-mouth, hard-nose agents take a drill sergeant approach to breaking down the student loan deadbeat. I’m sure collection agents moonlight as prison guards.
In this education house of detention, I’m an old dog of the yard. Thankfully, a physical debtors’ prison doesn’t exist, or I’d have been there for close to a decade. Ian Boyko of the Canadian Federation of Students admits that there are “too many (students) to count” facing OSAP collector hardship. The CFS receives plenty of phone calls on a weekly basis from shell-shocked students who’ve been assaulted by privately run collection agencies.
Once you enter the vicious cycle of remitting less than the accruing interest, you might as well live in some Dickensian debtors’ gulag. Collection agencies can keep their hooks in an education-loan inmate almost indefinitely, thanks to a 1999 change to the Bankruptcy And Solvency Act.
The federal Liberals, claiming a need to protect the integrity of the loan system, amended the Bankruptcy And Solvency Act to exempt student debt from the slate-cleaning power of a bankruptcy declaration. They reasoned that a debtor should be hounded for payment for 10 years, three years longer than it takes someone to legitimately pay back the loan.
But basically, my debt sentence and that of others in the lower income tax brackets is 10 years to life.
Only under the most dire financial conditions is a judge persuaded to forgive a student loan through a bankruptcy proceeding. Collection agencies are allowed to garnish wages (though they rarely do). Defaulters can discover that their ability to borrow money is short-circuited and that governments can apply income tax returns to the debt.
But I’ve developed a con man’s code for survivability when dealing with collection-agent screws over the past decade. During one round in the never-ending war I even got one poor fellow to blurt out that he’d take $1 a month on my account, which I agreed to. A new screw called the next day pretending the whole negotiating deal hadn’t happened and that the fellow who worked the deal didn’t exist.
With so many years under my belt, I have a sixth sense about their tactics. Take the screws’ most recent efforts to get me on the phone. A plain card with no return address came in the mail saying, “Please call for an important message.” Though my debt collector sense was tingling, I couldn’t resist the urge to verbally joust with them. Or as I like to think of it, take them to the learning tree.
Me: “Yes, hello. I received this card in the mail. Have I won something?”
Screw: “No.”
Me: “Are you sure? Because it looks like one of those cards that come when you win something.”
Screw: “Can I have your name?”
Me: “Positive I haven’t won some contest or something? I mean I’d hate for this to be about my decades-old student loan.”
Screw [laughing]: “It is about your loan.”
Me: “No shit. I couldn’t resist this card.”
Frighteningly, while he’s punching in my S.I.N. and name, the screw admits, “I Googled you. I read your articles in NOW. You sound like such a cool guy. Why aren’t you paying back your loans?”
Ex-students have different reasons for not doing the payback. Some are unemployed, others are pissed off, and some, like me, are on a disability pension and have medical bills that throw our incomes into the hole every month. According to Ministry of Education documents, OSAP loan recipients are defaulting at an overall rate of 13.5 per cent. And the report bemoans that “this is unacceptably high.” Private career colleges are pulling the number upward with a whooping 22 per cent of their loan recipients going belly up, while university debtors bring the digit down with their 9.8 per cent default rate. Colleges are smack dab in the middle with 17.8 per cent.
Of the big three T-dot schools, York has the highest default rate, 9.4 per cent. U of T (5.5 per cent) beats Ryerson (5.7 per cent) by a slim margin.
The McGuinty Liberals’ 2003 education platform states, “The more you learn, the more you earn. And the more you learn, the more productive Ontario becomes.” Sadly, with massive education debt, all this bonus productivity goes directly to the banks.
But despite the punishments, student loan deadbeats can inflict some serious hurt to the loan system simply by standing up and refusing to pay. About $1 billion is owed to the feds and the province in post-secondary student loans. A debtors’ prison riot could force the government to better consider the demands of young poor people or grads who have become destitute because of education. A college grad averages $12,360 and university grad $21,350 in debt.
Busting the financial backbone of the loan system is a hellish assignment, but it’s time to refuse to pay the piper. As in any good revolt, the number of revolutionaries needs to greatly outnumber the screws to gum up the system.
The Rae report cites many different international studies, but here’s one item that wasn’t mentioned. Owing $7 billion to the government, New Zealand students have begun walking out on their loans, going so far as to flee the country! “This massive student debt is threatening our society and economy. We have workforce shortages in health and education, and graduates are leaving New Zealand because of their student loans,” Fleur Fitzsimons, New Zealand University Students’ Association co-president, told the press.
While a conclusion hasn’t been reached, Rae, who’ill report back in time for the January 2005 provincial budget, is looking to “establish an appropriate sharing of costs of post-secondary education among government, student and private sector.”
That promise-breaker premier pledged his Libs would bring Ontario to the national average by pumping in $850 million annually into Ontario’s post-secondary system. Students are going to be lent greater sums of coin to pay for spiralling uncapped tuition rates.
Like a deal with the Devil, the gains of today are swallowed up by the hellfire of tomorrow.
news@nowtoronto.com
