Will Newfoundland and Labrador Look to Other Provinces for Direction on Retaining University Graduates?
There is a movement underway in Newfoundland and Labrador intended to convince the provincial government to waive interest charges on student loans. The initiative, led by local university graduate and social activist, Travis Parsons, is attempting to convince government that one of the reasons so many young people are continuing to leaving the province is their crippling student debt and an inability to attain salary levels in the province that would allow them to meet their loan obligations.
Retaining university graduates by easing the financial burdens is not a new concept, however it’s one that is just beginning to be recognized in parts of the Country. Earlier this year, the province of New Brunswick instituted a process that allows graduates to receive rebates of up to 50 per cent of their tuition costs, to a maximum of $10,000. The rebates are issued over a period of several years, to a maximum of $2,000 a year. Manitoba is also considering similar legislation in an effort to curb a growing problem with out-migration.
At this point the province of Newfoundland and Labrador has not publicly said it will support a debt reduction plan however Parsons and others believe that if any province should be concerned with out-migration it’s Newfoundland and Labrador. Recent reports have shown that the provinces population is falling, thousands of people a year are leaving for other locales, the skills base in the province is slipping and a large percentage of the population will soon be reaching retirement age or has already done so. All of which makes it extremely difficult to attract industry and grow the economy, two planks in the Tory government’s platform.
Convincing young people to remain in Newfoundland and Labrador is an issue that is growing more and more important with each passing year. These people are the future of any province however retaining them can be difficult when salaries, on average, are lower than those available in places like Alberta. One option to resolving this situation may be to ease the burden of student loan interest or to rebate tuition itself, in exchange for the graduated remaining in the province for a set period of time. Many graduates leave the province soon after graduation. It is believed that if those students could be convinced to begin their careers inside the province they would be more likely to remain for the longer term.
Reports suggest that under a pledge by Prime Minister Stephen Harper's Conservative government, Manitoba which is now considering student debt relief, could be in line for a major funding boost to help cover the cost of its initiative. If this is the case, one wonders if Newfoundland and Labrador might also be able to leverage federal funding for a similar scheme. According to the latest census, Manitoba lost 8,635 people between July 1, 2005 and July 1, 2006. Newfoundland and Labrador also lost thousands of people to out-migration during the same period, however while Manitoba's population continues to grow, thanks mainly to increased immigration, Newfoundland and Labrador’s is falling steadily. Regardless of whether or not the federal government is willing to support such an initiative in the province, many feel that if something isn’t done soon, the problem will continue to worsen.
8 comments:
Why bother with government loans?? When I went to University (of Calgary) I got a line of credit form the bank and it was interest free for 5 years after graduation.
Hi anon, I don't know what your financial circumstances were when you went to school, but banks don't just hand out lines of credit. You need collateral, a co-signer or something that would convince them you have the means to pay them back. Many students don't have that luxury and must rely on student loans to get an education.
Anon you said that you went to the University (of Calgary) and you got a line of credit from the bank that was interest free for 5 years after graduation. You didn't say the duration of your studies. So you must have had no payment during your University years and for 5 years after. That would amount to something over 5 years, since you spent time studying.
If you could provide more information that would be great. Somebody must be giving a guarantee for such a wonderful thing. There is such a long span there before the bank receives any payment for its outlay of funds.
Who would be the guatantor for such a venture, it sure wouldn't be the bank, since they are in business to make money, it must have been the government of Alberta or was it?
My husband and mother both co-signed and although know there are exceptions, I also know that very few university students do not have parents that could co-sign. All that is required is a steady income.
I attended for 4 years and received a Bachelor of Education. I now teach.
Sorry , what I meant to say was that most university students have someone that could co-sign a loan.
Anon - That is understandable that you would have somebody who would co-sign for you. But a Chartered Bank lending a person money and not receiving any payment at all on an outlay of cash for more than 5 years, that is unheard of.
There is something more to this than having a guarantee from somebody who co-signed, saying he/she would pay back the money at some future date on your behalf. What was the Bank getting in return for such a long time span? After 5 years did the bank charge an interest rate that was much higher than the rate that was current? A rate, say, that would have compensated for the interest lost by the Bank for the time span for which it received no payment on principal or interest. Banks are not in the business of lending money and receiving NO return. I am stomped.
If you got the deal with the Bank that you say you got, well then Anon you got the deal of a lifetime and you pulled a fast one on the Bank. Kudos to you!
My apologies. I dug out my statements and paperwork and it was 2 years after Graduating that the interest on the loan was due to start paying. Remember that is was a line of credit not a regular bank loan. Interest IS higher on a LOC but you can carry a balance forever (not recommended). It's not perfect but it is a good way to help students get themselves started.
Anon - Thanks
You say your interest rate was higher,and I think, if you computed the figures, you would find you were charged the amount of interest that you would have paid, had you been paying it off monthly.
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