Mr. Speaker, I am very pleased to have the opportunity to speak for seven minutes on the motion before the House moved by the hon. member for Vancouver East regarding the Canada student loans program.
I am confused by the wording of the privatizing of Canada student loans. In my riding I receive calls from students on numerous occasions with questions or comments about the Canada student loans program. I am not quite sure what the member means about privatizing the Canada student loans program.
The wording of this motion really seems to be calling for action by the Government of Canada to assist in the financing of post-secondary education for Canadian young people.
What the motion ignores is that the Government of Canada has undertaken extensive consultations with all stakeholders with an interest in this subject, including the provinces and the territories.
The government has implemented many of the recommendations of the report of the Standing Committee on Human Resources Development and the Status of Persons with Disabilities. We have already taken measures to ensure Canadians have access to post-secondary education.
In his February 1998 budget speech the finance minister said: “Canadians do not need to be told that student debt has become a major problem. Students know it. Their families worry about it. Graduates must deal with it”.
In 1990 the average student debtload of a graduate completing four years of post-secondary education was $13,000. It is now almost double that, $25,000. In 1990 less than 8% of borrowers had debts larger than $15,000. Now nearly 40% do.
For the purposes of the Canadian opportunities strategy, the February budget proposed various improvements that reflect our approach regarding financial assistance to students, the new situation of today's students and current economic and demographic changes. The new measures are designed to help those most in need in the current economic context.
The budgetary measures include tax relief for interest on all student loans, interest relief for more graduates, extended repayment periods for those who need them, extended interest relief periods for those who remain in financial difficulty and reductions in loan principal for those who still face financial difficulty.
For the first time all students get tax relief for interest payments on their student loans. Each claimant will be allowed a 17% federal tax credit on the interest portion of payments of federal and provincial student loans. The income threshold for interest relief has been raised by 9%. This means a person can now earn more and still be eligible for interest relief.
The interest relief plan is designed so that the Government of Canada pays the interest on the loan for students facing financial difficulty in repaying their loans. Beginning next year partial interest relief will be available further up the income scale for graduates facing financial difficulties.
For borrowers who have exhausted 30 months of interest relief they can now ask their lending institutions to extend the loan repayment to 15 years. At current rates of interest this could lower monthly payments by close to 25%.
Now debt reduction can be provided for some graduates who still remain in financial difficulty after exhausting free interest relief measures. In these cases the loan principal may be reduced if annual payments exceed 15% of the borrower's income.
Other initiatives taken under the Canadian opportunities strategy also seek to improve Canadians' knowledge and skills to prepare them for a knowledge-based society.
First, the millennium scholarships will facilitate access to post-secondary education for over 100,000 students every year. These scholarships will be offered to both full time and part time students.
Second, Canada student grants of up to $3,000 a year will help more than 25,000 students with children or other dependants. These are grants, not loans, and they do not have to be repaid. Students with a permanent disability such as deafness, blindness or other physical or learning disability may be eligible for a Canada student grant of up $5,000 a year to cover exceptional education related costs. This is a $2,000 increase from what was provided in the previous special opportunity grant for students with disabilities. Part time students with demonstrated financial need may qualify for a grant of up to $1,200.
Finally, certain female doctoral students pursuing full time studies may qualify for a Canada study grant of up to $3,000 a year. This will help to increase the participation of women in certain fields of study. Engineering and applied sciences, agriculture and biological sciences, mathematics and physics, arts and social sciences are examples.
Taken together the measures I have described account for some $230 million of new expenditures by the Government of Canada on post-secondary financial assistance to Canada's students.
This is a remarkable commitment to promote the well-being of our students and to help them complete their education, at a time when higher levels of knowledge and skills are becoming necessary to allow us to remain competitive in the global economy.
In fact, overall, the federal government's initiatives will meet a large number of the requests made in the motion before us today.
In consultation with other players in the field of post-secondary education and the students themselves, the Government of Canada has devised a system that promotes accessibility for all Canadians. It is a system that works for today's economy.
In conclusion, while we can all appreciate the concern of the hon. member for Vancouver East for Canada's students, the actions already taken by the Government of Canada render the motion redundant.