A benefit to society
Ms. Tamburri’s recent article on our bloated and bungling student loan system couldn’t come at a better time. As the federal government mulls over its options for loan reform in early 2008, struggling borrowers already in repayment are hoping they aren’t forgotten in the process. Ultimately, meaningful reform will only come about when the federal government starts viewing postsecondary financial aid as a benefit to society, and not simply to the individual who takes out a student loan.

The government of Canada has spent millions building an impressive and increasingly imposing loan collection bureaucracy, while maintaining its sky-high interest rate regime – ensuring borrowers continue to marinate in financial purgatory for over a decade in some cases. Meanwhile, interest relief and debt reduction in repayment programs turn down thousands of borrowers for assistance each year.
 

Building a better financial aid system means reducing the cost of borrowing for students, as well as improving programs aimed at helping borrowers in financial distress. Given that the government is paying only about 4.5 percent interest on student loan funds, its current interest rate of 8.5 percent for loans in repayment is simply outrageous and out of step with most developed countries. It is time for the federal government to improve the system by building better and more flexible programs. We will know in just a few months whether Monte Solberg and company are truly listening to Canadians.

Julian Benedict
Mr. Benedict is co-founder of the Coalition for Student Loan Fairness.