That in the opinion of this House, the government should reverse the privatization of Canada Student Loans, reject proposals for income contingent loan repayment, and should instead implement a federal student grant program and establish accessibility as a new national standard for post-secondary education.
Mr. Speaker, I am very pleased to rise today in the House to speak to private member's Motion No. 132 which reads:
That, in the opinion of this House, the government should reverse the privatization of Canada Student Loans, reject proposals for income contingent loan repayment, and should instead implement a federal student grant program and establish accessibility as a new national standard for post-secondary education.
The motion has been brought forward for debate because in the last few months, certainly in the throne speech and in the budget, we have seen the Liberal government call itself a government for young people. At the same time we have seen the government engage in a deplorable strategy of gutting funding for post-secondary education, privatizing the Canada student loans program and forcing more and more students into severe debt.
Despite what we heard in the throne speech and the budget about increases in help for students, the stark reality for thousands of students is very severe.
The motion attempts to rectify this injustice but also to highlight Liberal hypocrisy and to make the link explicit between the drive to privatize post-secondary education and the sense of an increased hopelessness that there is among students who are now graduating into unemployment and some even into poverty.
It should also be made clear that as the government retreats from its commitment and public funding of post-secondary education what is really going on in the country and what the Liberal government has allowed to happen is that the banks are moving in. More and more students are forced to borrow more and more money directly from banks to fund their education.
We need to be clear that banks are not publicly accountable organizations. They have as their main interest a maximization of profit and certainly not the well-being of students. Yet students are being left to the mercy of the big banks that are now involved in the Canada student loan program.
The strategy on the part of the Liberals has eroded public funding for post-secondary education to the point where it is now completely within the private sector domain.
With the motion New Democrats are continuing to press the point and to pressure the government for the Liberals to recognize the extent and jeopardy students are now in with this debt crisis. We want the government to listen to what students are saying. We want members of the House to defend public education and to say that we have to take much stronger measures to make sure there is not the severe student debt that we have.
According to Human Resources Development Canada, 45% of new jobs by the year 2000 will require post-secondary education. This means that for many young people attending university or college it is not an option if they want to find work. It is now simply a fact of life that if they want to have a better chance at finding employment they a need to have post-secondary education.
I do not think there is a member in the House who would disagree with that reality. Despite this fact and that the Liberals say they are committed to youth, the Liberal government is continuing to throw barriers in the way of young people who are struggling to develop the skills and talents necessary to get ahead in a cut-throat global economy.
Since 1995 the Liberal government has cut $1.5 billion from federal funding for post-secondary education in terms of transfers to the provinces.
Over the last 10 years tuition fees have climbed by 240%, one of of the steepest criteria increases in inflation. Last year alone tuition fees rose by almost 12% nationally, increasing at a rate seven times the rate of inflation.
Things are so severe in the country that it is probably shocking for most Canadians to learn that tuition fees in Canada have reached a national average of $3,100, which surpasses the average tuition fees at publicly funded universities in the United States.
In 1997 there are many surveys but the particular one done in the maritimes, a survey of high school students asking them why they were not going to university, indicated that 40% of the students responding said they were not going on to post-secondary education because they simply could not afford it.
The average student debt is now $25,000. That is up from $13,000 in 1993 when the Liberals took power. Bankruptcies for students trying to pay off their loans are also at record levels, having increased by 700% since 1989.
Currently there are something like 130,000 who are in default, not because those students want to be in default, not because they do not want to pay back their Canada students loans but simply because the cost of post-secondary education has become so onerous and so severe, particularly for low income students, that more of our students are falling into default and falling into bankruptcy. The number of bankrupt graduates is now estimated to be 37,000. One missing payment determines default.
We need to look at the background of how this incredible, shocking situation has come about, particularly in light of what we heard in the budget that everything is glowing and doing well for students. As we can see the facts present a very different kind of reality.
In 1995 the Liberal government gave financial institutions much broader responsibility in the area of student financial assistance. Before that time student loans, even though they were assessed through banks, were fully guaranteed by the government. But at that critical time in 1995 the federal government ceased to guarantee students and, even worse, it paid the bank a 5% risk premium on all loans to participating lenders. It was the government's way of saying that students are not to be trusted and it was the government's way of saying that the banks can maximize their profits at the expense of students.
As a result there is wide scale evidence that some banks are being incredibly over zealous in pursuing students who are either late in paying or who are incapable of paying their loans because they are on low income and they cannot find work.
As soon as the student defaults their file is deferred to a collection agency which is charged with the task of harassing, degrading and browbeating a young person into submission. That is what our program has come to in terms of Canada student loans, a program of harassment and degradation of students who are simply trying to get through school.
Regrettably in this last budget the Liberal government announced another giant leap toward privatization. Very deep within the budget legislation currently in the committee is a clause which would give banks more power to refuse Canada student loans to individual students. The clause allows the cabinet outside of the scrutiny of the House to determine which students do not deserve access to loans. The implications of this are staggering.
Is this the first step toward giving banks total control over eligibility guidelines? How far are we away from banks being able to determine which areas of study have a better return than others, that is, how profitable is an education in arts? I think there is growing information from student organizations about their concern around privatization and corporatization and this move toward the banks influencing criteria and circumstances in which students will now get loans is cause for great concern.
Student loans are not commercial loans, although they are increasingly being treated as such. By handing student loans over to the banks the loans become potential revenue generators rather than social investments. It means that students are forced to contend with very unreasonable rates. In many cases there are students who are paying 11% to 12% interest on student loans, far above the prime rate. Even though the banks will if they are pushed lower the rates, students are not necessarily informed of this.
This is a very serious part of the privatization in that it forces individual students to deal with very bureaucratic banking structures that have no interest of the student at heart and a lot of students simply are not aware of their rights when they go through the banking system to know what they can access.
There is also a problem with the inflexibility of renegotiation. Many students who sincerely wish to repay their student loans are forced to default because the banks refuse to renegotiate when the borrower's financial situation changes.
The bottom line is that the banks are unaccountable to the public. Banks and collection agencies can be very intimidating and when they deal with an individual, that individual has no sense of advocacy or resources to help them get through the system. When students are faced with this they have nowhere to turn.
I have many examples in my own riding and I know from having spoken with other members in the House that there are many other examples as well across Canada where students are actually harassed and intimidated by collection agencies. I had one young woman in my riding who was a student and had a loan. For various circumstances, she had to go on social assistance. She is now being harassed by a collection agency for the repayment of her loan even though it is completely impractical and impossible for her to do so.
That is what the privatization of Canada's student loans has meant in a very real sense. That is what it means when we have turned the power over to the banks.
The issue of privatization goes even further. It is not just Canada student loans. We are seeing increasingly a trend of CEOs and shareholders of Canada's biggest banks who already sit on the board of governors of many of Canada's universities and colleges.
Privatizing student loans furthers their influence in shaping the direction of post-secondary education in this country. The Canadian Federation of Students has done quite a lot of research on this matter to unmask corporate rule on campuses across the country.
Their document says that privatization is essentially the retreat of public funding as well as public ownership, control and regulation from the post-secondary education system to be replaced by private dollars, private ownership, private controls and no regulation of things such as tuition fees.
They go on to say that corporatization is a term used to describe the influence of business interests in shaping many aspects of post-secondary education systems, including the setting of tuition fee levels, determining what gets taught in a course and by whom, which supplies get used for a course or program or which programs receive funding and which are cut.
We only have to look across Canada at post-secondary institutions such as Simon Fraser University, the University of Calgary, the University of Regina, the University of Toronto, McGill University or Concordia University to see this growing trend, a very alarming trend of increasing privatization and corporatization and an influence of these unaccountable organizations on the criteria, the courses the setting of fees in post-secondary education.
There is no question that trend and alarming increase is directly related to the retreat by the federal government of the public funding of our universities and colleges.
In presenting this motion today, the NDP wants to be very clear that we stand staunchly in defence of and to protect our public education system. We believe as New Democrats that we are not going to let the federal government forget about student debt and the student debt crisis.
Instead of creating scholarship programs, the millennium fund, which duplicate existing scholarship programs and do nothing to help students in need, we have repeatedly and we will continue to call on the federal government to take steps that would not defer student debt but reduce student debt. We think the key way to do that is by increasing funding to post-secondary education.
By the time the millennium fund begins in the year 2000, $3.1 billion will have been cut out from post-secondary education. The amount of funds in the millennium fund at about $250 million a year for 10 years will not even come close to compensating what we have lost as a result of Liberal government policies.
In this motion today we are calling on the government to stand up for public education, to restore the funding to this year's cut of $550 million and, more than that, to follow the lead of a province like British Columbia which has been working hard to make post-secondary education more accessible by instituting a freeze on tuition fees as a first step to making education accessible.
We want this federal government to follow the lead of British Columbia and to say that post-secondary education is a priority, that it must be accessible and that education is not just a privilege for those who can afford it. Post-secondary education is a right that has to be accessible to all Canadians.
What we in the NDP are calling for is a national grant program to assist first and second year students. This must be done in consultation with the provinces.
I think we have had enough of the kind of unilateral actions we have seen in this House around post-secondary education. The millennium fund was introduced with absolutely no consultation with stakeholders, with provinces or anyone who has an interest in this matter. It was an arbitrary measure that was taken by the government with no consultation and no information provided.
We believe that in establishing a national grant program it has to be done as part of a new federalism where the provinces are clearly involved in that. The federal government must take the leadership to establish accessibility as a new national standard. The issue of accessibility must be tied to the funding that comes from the federal government and the funds that flow to provincial governments. That is what needs to be done in Canada. That is what needs to be done by the Liberal government.
As we have seen in this last budget, we are going in exactly the opposite direction. We have seen a gutting of funds for post-secondary education and we have seen more targeting toward individual students based on some the government deems have needs and others who are now left behind. This is completely the wrong kind of approach. We need to restore confidence in the funding of those institutions so that institutions are not forced to increase tuition fees year after year and then we begin to see student debt go up.
The other measure we are putting forward in terms of the privatization of Canada student loans and what has taken place since 1995 is to establish a program of real service to students. In the human resource development committee we had representatives of student organizations come before us. They told us story after story. I know from my riding of Vancouver East that students have no resources or information to help them get through an incredible bureaucratic maze and through the banks around Canada student loans.
If you live outside the Ottawa-Hull area and you have a problem with a Canada student loan your only resource is to call long distance to Hull, Quebec or go on the Internet. The availability of local resources and local service to help students with their individual cases is non-existent. That is something that must be changed by stopping this privatization of Canada student loans and ensuring there is direct service through Human Resources Development Canada for Canada student loans.
There is no question that the millennium fund and the Canada student loan program could be easily administered through Human Resources Development Canada. There is absolutely no objective reason why this program has to be privatized other than to provide more gravy and more profits to the banks which are now living off the misery of students in this country.
In the coming months the members of the New Democratic caucus will continue to work very hard with other members of the House and with student organizations and post-secondary education organizations to make sure that young people from low and middle income families do not have to mortgage their future to attend university or college.
We are really fed up with the kind of hypocrisy that we have heard in the House where we are told repeatedly that this government is interested in the plight of young people, youth unemployment and student debt while we have seen measures introduced to increase the bankruptcy laws to make it more difficult for students to declare bankruptcy. We are seeing the eligibility criteria change and student debt continuing to rise. We are committed to working against that and to bringing accountability to the government to ensure that there is adequate funding for post-secondary education.