The Canadian Federation of Students (CFS), the Canadian Alliance of Student Associations (CASA), and the Coalition for Student Loan Fairness (CSLF) all support Bill S-205, which is currently being debated at the Senate Banking, Trade and Commerce Committee.

Currently, student-loan borrowers must wait seven years before they can apply for a discharge on a loan by declaring bankruptcy, as per the federal Bankruptcy and Insolvency Act.

That number is down from the 10-year period that was mandated in 1998, and S-205 hopes to see the waiting period lowered to just two years.

?It’s really a relatively small demand of a student to be able to say they have to pay back their loan,? said Goldstein.

?What I’m worried about is the student who becomes ill, who becomes unemployed, who becomes handicapped, who has a nervous breakdown, who is unable to obtain a job in their field or any other field, and who just can’t pay back.?

S-205 was originally introduced as S-227, but it was dropped at the end of the last session of parliament.

He re-introduced the bill a few months ago, and it was the subject of two hearings at committee on March 13 and April 3.

Goldstein approached the CFS and CASA last summer when he was drafting the bill. Both groups were enthusiastic.

?Technically, our position is that there should be no prohibition [of loan discharges], but in the political landscape today, a two-year prohibition introduced by a Liberal senator is a welcome dialogue about the harm that the existing legislation is causing,? said CFS government-relations coordinator Ian Boyko.

CASA National Director Zach Churchill added his support, though with some reservation.

?It actually reflected a lot of our policy on bankruptcy issues, so we were pretty impressed with it,? he said.

?But It’s still going to make it an application-based process to be able to . . . get bankruptcy support. We would like to see one where students can automatically get it.?

Critics have said that this bill will allow students who want to get rid of their debt to do so simply by declaring bankruptcy and washing their hands of money owed.

HRSDC spokesman Murray Gross said that the government does not support S-205. He argued that the government has already addressed the issue of student-borrower relief.

“Our Bill C-12 put in place debt management measures to help borrowers for the first seven years of repayment. Most borrowers are able to make reasonable payments within five years,” he said.

Churchill disagreed with that assessment. He said that declaring bankruptcy only hurts students, but the option should be available.

?I think we need to give students the benefit of the doubt,? he said.
?They are smart people. Presumably, they just received a post-secondary education and have the ability to think critically and understand that bankruptcy isn’t a good thing for anybody. It’s a last resort for students who are suffering the most.?

For students who drop their debt irresponsibly, Goldstein offered criteria that a judge could consider when deciding whether or not to discharge either, part, or all of a borrower’s loan.

?[Criteria] would include the extent to which the student’s ability to earn a reasonable income in the foreseeable future is there, whether the student made an effort to reimburse during the course of the previous period of time, [or] whether the student took advantage of debt and interest relief provisions,? he said.

The CFS and CSLF both praised Goldstein for his commitment to student loans.
?[Goldstein] has a track record in working on these issues, and I think he’s generally regarded as one of Canada’s experts in this area of the law,? said Boyko.

?He brings a wealth of experience to this discussion that virtually most other Senators?or probably MPs?wouldn’t be able to bring . . . to the table.?

CSLF executive director Julian Benedict said that Goldstein was ?one of the first stakeholders approached? by the coalition when it formed in April 2007.
?Goldstein has been a tireless advocate for student-loan borrowers. I don’t think his party affiliation is as important as his passion for students,? said Benedict.

Benedict supports S-205, but he pointed out that it doesn’t help students avoid accumulating debt in the first place.

?It’s a step in the right direction, but we still have to deal with fundamental problems with the existing system that puts people into bankruptcy,? he said.

Benedict said that the entire student-loan repayment regime should have students and recent graduates pay less interest.

While the initial loans are hard to deal with, he said, what sends students over the edge?sometimes into bankruptcy?are the interest payments.

?Seventy-five per cent of people who default do so in the first three years of repayment,? he said. ?You pay mostly interest at the beginning of your loan, so actually It’s the interest that is causing people to default.?

Goldstein said that he has received support from a large number of senators, both in the chamber and at committee.

OTTAWA (CUP) — Human Resources Minister Monte Solberg has launched an online consultation to hear from students in the ongoing review of the Canada Student Loans Program (CSLP).

The online survey went live on Sept. 7 and is asking interested Canadians to offer their advice about ?how to best modernize, simplify and administer? the CSLP. The consultation lasts until Sept. 28.

Julian Benedict, a spokesperson for the Coalition for Student Loan Fairness (CSLF), welcomed the move, though he still had concerns about the review.

?It’s certainly better late than never. We are disappointed that it took this long for the government to realize that the almost one million student-loan borrowers deserve a say in the system they are paying for,? he said. ?Borrowers pay sky-high levels of interest for a system that is antiquated and unresponsive. we’re pleased that they’ve finally opened the review up.?

Benedict was cautiously optimistic about the outcome of the review, given that students now have a chance to air their grievances.

Zach Churchill, the national director of the Canadian Alliance of Student Associations, said that despite the consultation, the CSLP review is still inadequate.

?The review is still too narrow in scope and doesn’t address the real issue with student-loans programs or student financial aid in Canada,? he said. ?People’s stories and input will only go so far with this review, the way It’s set up.?

Benedict said that the federal Liberals have been relatively quiet on the issue and the Bloc Québecois don’t actively work on federal post-secondary issues. But, he said, the NDP has supported much of the work of the CSLF.

Denise Savoie, the NDP post-secondary critic, welcomed the public consultation.

?I would have liked for that process to begin right from the start of the review instead of this last-minute three-week window, but nonetheless I think It’s important that [the government is] listening and all I can say is that I hope they incorporate what they hear,? she said.

Benedict said that while the CSLP review’s mandate only looks at ?administrative tinkering?, much more is necessary to fix problems plaguing the system. Savoie agreed.

?All former governments have done is tinker around the edges of the system. So I think It’s high time to have a substantive fix to the student aid program,? she said.

Lesley Harmer, Solberg’s director of communications, wrote in an e-mail that the government has actively consulted stakeholders throughout the process.

?Consultations have been underway for a few months,? she said. ?The online consultation is just one more component. The best way to gather information is to have discussions with the people directly involved and that is what we are doing.?

The CSLF published a report last July that outlined a number of perceived problems with the CSLP, including high interest rates, the lack of a national student-loans ombudsperson and inadequate hardship-relief programs to help those who default on their loans.

The online consultation is available on the HRSDC website at: http://www.hrsdc.gc.ca/en/learning/canada_student_loan/form_en.shtml

According to a spokesperson with the Ministry of Human Resources and Social Development, the completed review of the Canada Student Loans Program is scheduled to be released with the 2008 federal budget.