Mr. Speaker, the Canada Student Loans Act and the activity of it has an impact on five basic segments in our society: the students, obviously; the parents and family members; the university or college boards; the teaching staff and administration of those institutions; and of course society at large, all Canadians through our economy.
I would like to speak today specifically to the issue of the income sensitive repayment loans in this proposed legislation. Another title for that might be an income contingent loan repayment program.
The reason I address this specifically is that the government has started to take a positive step and will form an element of where we must be going in terms of reforming our institutions for higher learning.
What is an income sensitive repayment loan or income contingent loan repayment program? Simply put, it is a scheme for post-secondary education and it is designed to allow students to pay back their student loans over a period of time based on their annual income.
Upon graduation, the student would begin to repay his or her student loan. The repayment of the loan, however, would link the repayment plan to a student's earnings or ability to pay.
Exactly how it would work has been described earlier in the House, but in summary the income tax machinery could be used in monitoring and collecting student loans and in the implementation of an income contingency principle whereby students would pay back a set percentage of their income.
I mentioned that a number of elements within society are impacted. Let us talk briefly about students. Our students are the future of Canada. It is their training that will be pulling our economy forward. Indeed the strength of our economy lies in society at large and within the education that society gains.
However in doing some research for this presentation I took the time to contact some people at the East Kootenay Community College in my constituency. They wrote to me and gave an idea of some problems students are facing as they go through the present system. Perhaps I could make a very brief summary of some problems that faced the students on September 17 last year.
Of the 300 loans that had been submitted to Victoria it is estimated that 100 students had not received the loans as at September 17, obviously the start of the calendar year. It is estimated that 25 per cent of the students who had received loans had the calculations of their awards done incorrectly. Many students were in the process of appealing or reassessing their loans because of application errors. The financial aid office of the community college had been issuing emergency loans and tuition and book deferrals to students who were waiting for their loan documents to arrive or had pending applications. At the end of the month, and they were looking forward, they expected that emergency moneys would have to be made available to the students. I have three children who are now in their mid-twenties and have been through this process with them. I know,
particularly at the start of a college or a university year, this could be very disconcerting. They had to look for emergency moneys.
Approximately 25 per cent of those students who had not received the loans, believe it or not, had been referred to social services. The report says that because of uncertainties produced by the system, that is their applications went missing or they could not get access to information, many students were actually in panic. The report goes on and on. Clearly this is not acceptable to our future society and to the people who are there for training. That is the present situation.
The second group of people currently impacted by the student loans are the supporters, the parents and the families of the students. Having been through the experience I can report that some calculations occur because the existing formula is absolutely bizarre and would create a financial drain the average family could simply not afford.
The third would be university and college boards. They are dealing with the reality: as there is more and more of a squeeze on resources in Canada and our financial ability to pay, there is more and more of a shrinking of their ability to be able to fund these institutions. They have a strong sense of responsibility.
The fourth area is the staff, be they teaching staff or the staff who support the functions that are happening in the college. It is rather interesting that the vast majority of people involved in the training and teaching of our children, our young people, are very dedicated. There seems to me to be something of an unreal level of expectation on the part of some staff in terms of funding; in other words the bottomless pit or the attitude that we have the ability in Canada to keep on digging the hole deeper and deeper.
I believe in the concept of an income sensitive repayment loan because of its inherent fairness to students. First off I believe that students should know it is society's responsibility to create opportunity. They should know that in our society there is no free lunch, that the money must come from somewhere, and that the government is simply redistributing funds it has taken from someone else. They should also know that as they gain their education it obviously opens more jobs for life. On the other hand it is not fair to saddle the students with an inability to be able to repay the loans as our present Canada Student Loans Act has done.
Under income sensitive repayment loans the second segment is the people who are supporting these students. They would also be freed from the responsibilities or freed from the pressure that many of them are feeling at this time. In other words it would be the students' responsibility to negotiate and to repay. They would have the responsibility for these loans, thereby freeing up the families to the greatest extent possible. As I have indicated, in many situations as it presently stands families are saddled with responsibilities they simply cannot follow through on.
For those people involved with the university and college boards there would be the ability to know what is coming, in other words to be able to deliver services. All Canadians will end up benefiting. The entire economy will end up benefiting as we gain a handle on the whole area of funding student loans and the ability to be able to train all Canadians.
I believe in the income sensitive repayment loans and in the idea the Reform Party has put forward on the education voucher system. Basically the purpose of both these things is to accomplish what we need to accomplish, that is to train our young people but to lighten the necessity for further deficit spending. It has the potential to eliminate deficit spending. The Reform Party is noted for its commitment to reducing the deficit and ultimately getting the deficit to zero so we can start to work on the debt. At the same time the Reform Party is committed to student training.
In summary I say that students do not want a handout; they want a hand up. Income sensitive repayment loans are an important part of the hand up process for students. Therefore I strongly encourage the government to move quickly to expand the proposed section in the new Canada Student Loans Act.