NEW CREDIT CARD RULES HURT STUDENT LOAN BORROWERS

Today the federal finance minister introduced proposed amendments to the cost of borrowing regulations of the federal bank act supposedly to provide greater disclosure for consumers for credit cards.

They snuck in the following new amendments (c) and (d).

2. These Regulations apply to credit agreements, other than a credit agreement entered into

(c) under the terms of the Canada Student Loans Act

(d) under the terms of any Act of Parliament or of the legislature of a province that relates to student loans and that requires the rate of interest or the

 discount that may apply to the borrower to be

disclosed to the borrower.

http://www.fin.gc.ca/n08/data/09-048_2.pdf

Under the current cost of borrowing regulations student loans are not exempt thus student loans are required to disclose the terms of borrowing and to provide statements.

These amendments will mean that student loan borrowers no longer have any protection to not being told how their loan works, what the interest rate is and will not be provided statements.

Students deserve the same rights to information that other borrowers are provided.   Students are not second class citizens.

This action by the government will mean that students are not provided with information on interst rates, how their loans work or statements.   If students were provided information on interest rates and how their loans work and statments there will be less defaults.   Students need information to make informed financial decisions.

The Government plans to publish these amendments in the Canada Gazette on May 23.    We need to act fast to pressure the Minister of Finance to remove the amendments (c) and (d) to section 2 of the Cost of Borrowing Regulations so that students have the same protection as other consumers.