Post-Secondary Depression

With tuition fees soaring and provincial funding sinking, government financial aid has become a necessity for countless students. But many students find the aid just isn’t enough to cover the cost of a post-secondary education, and are left with few appealing options to bridge the gap.

Beyond students forking quintessential pots of nutritionally void, generic mac-n-cheese, there are ways to help ease money woes, but it likely won’t come without getting financially forked.
“Tuition fees are about double what they were three years ago, posing an increasingly large barrier to access for people who don’t necessarily have the financial means to pay $4,000 per year to go to school,” says Marc Lee, a research economist in the British Columbia office of the Canadian Centre for Policy Alternatives.

A sharp decline in government funding for universities and colleges has resulted in students being thwarted with higher tuition fees to help make up the lost funds the institution needs to operate, and with seemingly no relief in sight.

“In the short term we should freeze tuition fees and aim to lower them in the medium term…but you can’t just say, ‘thou shalt reduce tuition fees’,” explains Lee, who is the author of several CCPA reports on education. “You have to provide funding to the operating grants of colleges and universities so they don’t feel financially squeezed by the fact that they’re not getting the additional tuition revenues.”

Although the provincial government recently announced a tuition fee cap at the rate of inflation, many students are forced to turn to financial aid such as student loans to cover the high cost of going to school, which can act as a deterrent to the pursuit of an education. The most financial aid a single student in B.C. can receive for two semesters’ study has been frozen at $9,350 since 2002-03, even as university tuition has increased by an average $1,500 per year in that time.

“Ideally you want a situation where the cost of education isn’t creating any barriers to people who want to go there,” says Lee. “There’s a lot of scope within the provincial budget to increase the amount of grants for students who are having financial difficulties.”

Grants were once an effective way for students to ease the financial strain of school, both during and after. A single low-income student could receive up to $3,740 per year without having it added to their debt load.  However, the provincial government eliminated the grant program for needy students in February 2004 in order to fund an expansion in post-secondary spaces. This came after an announcement that the amount of money provided by the provincial government for each full time student space was to drop from $8,708 in 2003 to $7,974 in 2006.

According to Scott Payne, B.C. representative for the Canadian Federation of Students, one of the first things that should be done to improve financial aid is restoring the grants program. Payne feels that up until the grants program was eliminated, the province had one of the most comprehensive and leading edge financial aid systems in the country.

“The elimination of that program was a major step backwards for students in this province,” says Payne. “One of the first things that can be done to improve financial aid in British Columbia is a full reinstatement and restoration of the B.C. student grants program.”

After the grants program was wiped out, the B.C. Loans Reduction Program was put in place to try and fill the void. According to the Ministry of Education website, the B.C. Loan Reduction Program is intended to lower the financial barrier to post-secondary education faced by students whose personal circumstances force them to acquire a substantial debt to pursue their education.  Students automatically apply for a loan reduction when they apply for a student loan. The program establishes a threshold for student loan amounts, determined by the amount of available funding and the number of students who are eligible for a loan reduction. Anything borrowed beyond that amount is remitted upon annual completion of a full-time course of study.

According to a Ministry of Advanced Education press release, the Province will provide $450 million in funding over three years for student financial assistance, including debt relief programs and loan forgiveness programs, which offer assistance to those who qualify. With the average student graduating after four years with a $25,000 debt according to the CFS, this is certainly an option to look into for those saddled with huge student loans.

But according to Payne, the loan reduction program is no match for grants. “(The loans reduction program) is not as helpful for students in this province, particularly when we’re looking at how they’re able to budget the total cost of the education they’re seeking to achieve,” Payne explains.

“Students (with grants) knew at the beginning of the year how much they would be getting, and then would be able to figure out how they were going to get fund the rest of the education.”

But the loan reduction program doesn’t come into effect until the end of the year, leaving students unsure of how much help they’ll be getting. Payne also lamented the lack of funding compared to the grants program. The BC grants program ran on $80 million per year, while the loans reduction program gets $30 million in funding.

“Each year that goes by, students in British Columbia are going to be $50 million deeper in debt,” laments Payne. “Those debt numbers are not going down, you don’t see the federal government doing much to try and deal with student debt, and you certainly haven’t seen the provincial government doing much to deal with it either.”

Lowering tuition, or bringing back grants. Former Ontario premier Bob Rae, in his review of post-secondary education for that province, recommended a radical change in funding. Rather than keeping tuition low, Rae recommended that post-secondary schools be allowed to set their own fees, but have the government provide a comprehensive package of loans and grants to less well-off students in order to defray the up-fronts of school. The Ontario government has not yet acted on Rae’s recommendations.

For some unlucky students, it doesn’t seem to matter how many zeros fill their loan application—they just don’t qualify. For those who find they’ve been denied for a student loan, or the loan isn’t enough, another option for students is heading to a bank and applying for a line of credit or private loan. Although a relief period may be negotiated with the bank, the interest rates can put a major strain in a student’s wallet.

“The interest rates [for bank loans] are just astronomical…certainly more then what students would be looking at if they were receiving all their financial aid through the government,” Payne explains. “It’s a very unsustainable way for a student to try and finance their education.”

For those who have run out of options and can’t be lent enough money, there’s always the dreaded after-school job, which Payne says is what many students are forced to resort to.

“What’s happening for most students is that they’re either having to pick up a part time or full time job in order to make enough money,” says Payne, adding that taking on a job usually means less time studying, and sacrificing sleep in order to make ends meet.

“[Working] really just pulls a student in a lot of different directions and hampers the quality of the education that they wind up getting, simply because through no fault of their own they are unable to come with the resources in order to pay for their education.”

For many students in British Columbia, school is going to be a financial hardship, no matter how it’s paid for. Many student advocacy groups believe post-secondary education should be free, but Lee believes paying up a little will pay off.