Night Line & Premier's Offer
Well tonight I was called by Night Line, and I had the pleasure of talking to Linda. During this time I briefly explained to all Newfoundlanders and Labradorians what it is we are all about, and what NEEDS to be done to fix this mess. When Linda found out just how much of a monthly payment I had to make, she was stunned. Imagine what she would say if I had done the math before they called me and I mentioned how despite having a principle of approx. $44,000....I would have to pay back approx. $90,000. That is $46,000 that I could use to spend in THIS province and raise my family in THIS province. Either way, after I was done Premier Williams called in, and said he had not heard my conversation. Linda quickly filled him in and he said he would encourage me to send him a letter about our purpose, and list off the key points we want to make. This is where you guys come in. Please take your time in giving me your detailed stories about how the interest on your student loan impacts you. Either leave comments to this post, or email me (the link is on the left), and I'll include them all in my final letter to Mr. Williams, that I plan on delivering in person. We are rapidly making some progress people, let's keep it going.
Cheers
- Travis
Cheers
- Travis
posted by Travis | 10/25/2006 01:19:00 AM
14 Comments:
Way To Go Travis! If We All Keep It Up...Things Will Happen
One way the province could help give relief for student loans would be to give graduate students who choose to stay and work in the province a break on their provincial taxes.
This would encourage graduate students to stay and work in the province and also be an easy way for the govt to track and implement such a program.
The reduced provincial taxes would also help compensate for lower incomes in the province while allowing us to retain our educated young people.
The problem as I see it is cost and defaulters due to the removal of the incentive to pay due to the rising interest accumulation on the principal.
Defaulters could have to pay back all the interest that they were exempted from.
If someone has to move or chooses to move out of the province all exempted interest would have to be repaid.
Real can of worms here with defaulters/movers would require quite a lengthy contract all encompassing.
The military contract of serving the same amount of time in the province as in school or something along those lines maybe dollar value that would have to be constantly revised for inflation and tuition increases, could be considered.
It's not always out choice to stay in the province for the most part. I graudtaed from CNA in 2004 with a programmer analyst diploma. I recently had to take a job in PEI becaus e i simply could not find one in the province.
I agree that if jobs were available with good pay I could have afforded to stay, but I simply couldnt stay and pay my bills.
When I moved, my interest relief for the 6 mth period on my loan was up at the end of October. When I called to try and renew it, they told me I make too much money. When I told them about all the bills I have to pay, they told me they dont take into account the cost of living and my line of credit with the bank. Really im getting no further ahead now and I think what you are doing is a great cause. Keep up the good work and I hope my story can help you build a better case.
Feel free to contact me any time.
I agree with everything Strow said. I am an electrical engineer who had to leave the province because my interest lies in electronic hardware design. NL doesn't offer any jobs in that area so I don't agree that graduates who stay in NL be given a larger financial break.
Engineers make a lot of money you say? Keep in mind the hi-tech bubble burst years ago. It's now an employer's market. As a single person, living away from family, trying to make it on my own with no financial support I find it pretty tough to get ahead with this monkey on my back. I have calculated that 44% of my monthly payments goes towards interest and it's pretty depressing. If 100% of our payments could go towards the principal we would all be in a better position to getting rid of our debt.
Another joke that should be brought to Premier Williams' attention is the "Debt Reduction Grants" http://www.edu.gov.nf.ca/studentaidsystem/grants.htm#reduction. I thought I easily met the requirements from what was on the web. Turns out because engineering is a co-op program, "borrow more than $165 per borrowing week during a given semester;" also includes the semesters when we are working. I reminded them, "But you wouldn't give me a loan while I was on co-op because you said I was making money." Every time I called I would get someone different, with a different reason and it became obvious that Student "Aid" was not out to help me at all. So there are a lot of engineers out there who incurred over $40K of debt and are forced to swallow it because of this loophole.
My other question is, do you really think the Premier, a business man, is going to give everyone interest free loans? He's sitting on a gold mine. I'm pretty sure that's what his motivation was by getting the province to pay off our provincial loans, and create the "integrated" program. Don't tell me it was to make things easier for students. Mine is still two different payments. So, instead of having all of us pay the banks the interest, he saw an opportunity to have all of us pay the province. The banks did all the admin work, now all he had to do was make a lump sum, and we pay him back with interest. I thought it was a clever move.
-Shafted Engineer
All very good comments/suggestions about student Loans.
Anything that can be done reasonably without sticking the costs, 'after the fact', to the general and now aging taxpayer public
Using the example of the individual who said they had a debt of $46,000 and would have to pay back say $90,000.
Any borrowing of money is a commitment. Whether it is to buy a car, a home, an education, a vacation etc. It behoves someone, especially with the good basic education requirement to enter secondary and/or university training, to clearly understand the financial commitment they are making.
Or is there something deficient in preparation for life-long employment in our primary education system? Is it, for example, comparable internationally and to the Canadian 'average?
Do we leave school really understanding compound interest, how/why to vote, how to debate an issue in our so called democratic society and what is/are our personal responsibilities and rights within it?
That $46,000 is about the same cost, these days, as one high-ish end vehicle. Many cars/trucks etc. cost more than that (A Cadillac/Mercedes costs more and a Kia/Suzuki less) and none last anything like as long as the value of an education! Many people quite cheerfully commit to buying expensive vehicles, with payments of many hundreds of dollars per month! Along with many of the toys of today's society such as skidoos, ATVs, trailers etc.
And then complain about the cost of living due to their debts!
So someone incurring a student loan is maybe making a commitment that they will purchase, at some point in their working lives, one less higher end vehicle; or fewer goods and services to that same cost? And the interest that purchase will cost.
Or perhaps they are gambling that the supposedly additional earning capacity resulting from their additional qualifications will (or more than) compensate?
A calculation shows that owing $46,000 and paying back $90,000, over say 20 years, at a typical bank Line Of Credit interest rate will cost the borrower about $386 per month; no small amount. And (if that has to be paid from after income tax earnings?) it is the equivalent, if working in Newfoundland where taxes are high anyway, gross earnings of around $7000 per year. No small price to pay for 'an education'. Note: In Alberta one would pay some $2000 to $3000 less income tax.
My point is individuals should not come complaining after the fact and ask for student loan arrangements to be changed.
However maybe the Province can, look forward and at the longer term (whenever did politicians really look beyond the next election or two?), to alleviate or support the repayment of student loans. Provided it is some way beneficial to Newfoundland; and then wish to make that arrangement in some way retroactive, so be it.
For example; someone working full time in this province (or a deemed resident of this province), paying Nfld. taxes etc. could perhaps get subsidy for the interest portion of the student loan cost for say ten years?
Not the loan itself that was the commitment/responsibility entered into originally.
More personally we were as a family able to avoid any student loans. Even though pensioned (only one pensioner in the family), by the student and parents taking on additional part time work for a period of four to five years. Ex-student entered work force debt-free.
Also some students have much larger expenses, because they do not live close to one of the larger educational centres. Maybe this could be subsidized? But such subsidies should not extend to 'beer and skittles'(entertainment)!
In other words; for most students getting that secondary education is hard work with little relaxation, especially if they are also working 'to put themselves through'.
Maybe university and college fees should be 'free'? Provided that each student attends regularly and consistently and achieves, say, 75%+ (with right of appeal). If not a warning and then tuition subsidy withdrawn. Eh?
A few thoughts anyway.
... and it's getting worse I hate to say.
A lot of my parent's generation (your grandparents) had free tuition. In my day there were grants that did not have to be paid back and Deferred Grants that did not have to be paid back as long as you completed the semester. Your generation has insane amounts of tuition and debt.
The banks are crooks and they will give far inferior service than your father or mother when they go for a car loan or mortgage. They seem to forget that you young ladys and gentlemen will yourselves be getting car loans and mortgages in a few years.
Don't be afraid to demand the Service and respect you deserve.
Bravo to you for picking up the fight and thanks for linking the NL Defense League, our members are certainly supportive of your cause.
BornNBred
no jobs? I left my honors degree and just graduated with a B.Sc because I found work. Theres lots of work here for programming. No kidding, lots! Only problem is, most entry level positions do not pay nearly as well as mainland ones.
And by not paying well, I mean low 30's, high 20's. With my student loans, car payment(92 cavalier, not a Porsche) I was going negative money every month. I had constantly borrow money from my girlfriend or my family. I have to make the lowest loan payments just so I can make a payment at all, which in doing so, I collect more interest in the long run.
I couldn't buy a single thing for myself, or gifts for my family for Christmas (a $20 gift actually...), and basically, until I got my new job, lived exactly like a student would, if not a bit worse money wise. When, if I had just skipped university, I could have a family by now, a house, if I had moved to the mainland immediately after highschool.
I consider myself lucky however, and I managed to get a well paying job in St.John's about 2 months ago, and i'm only now getting on my feet.
But I won't have my family debts, and credit cards paid off until probably early next year, just because I had to borrow so much money.
I can't imagine being stuck in a low 30K/year job, I wouldn't be able to have a family really until my mid 30's, or really settle down. I can't imagine if you had trouble getting a job either... totally screwed. If you chose a sucky degree, your gonna be living with your spouse and working at walmart just to make ends meet.
I don't think rewarding people for just staying in the province would help much. I don't want our province to pay the price for all those people doing B.A's and flooded diploma's who should have thought a bit more before they chose to study that.
But however, those of us who are needed in the workplace, we could be starting new businesses now after a few years working, if we didn't have such high interest rates. We could be having families quicker and building more of a future for our province, quicker.
Instead, what we'll find is, because so few locals can afford to risk starting businesses, more and more outside companies and businessmen will come into our province when the opportunity arises, use our people as cheap labor, and keep the big profits. Whereas, a businessman from NL would not only employ the cheap labor, they would no doubt invest back into NL, and seek other ventures inside NL.
I believe students who receive student loans should be educated more. If someone told me when I started my post secondary education, that student loan payments would take up almost one third of my pay check while not taking into account the cost of living until I'm approx. 35 years of age, I would have thought things though more thoroughly. I'm not sure how, since I had a part time job and in my last year I maintained three jobs while going to school full time while still managing to ring up $36,000 of student loans. I may have decided to take some time to save up some money before going to post secondary education, or maybe lived on bread and water, who knows, but more education is needed.
For those of us that have student loans, the interest rates should be lowered or non-existent. At the moment I am paying the interest on my loan each month plus and extra 10-15 dollars. The principle is not going down, there doesn't seem to be any end to it. Why not charge a penalty to those people who don't make the payments. Some of us are really trying to get ahead and going nowhere. Please help!
I love the idea of lower taxes. NL is one of the highest taxed provinces in Canada. This is not helping the fact that people keep leaving the province for work. I know our provincial government needs the money; therefore, the federal government also needs to address this issue. Provinces like Alberta (our richest province) pay a lot less in provincial tax. Why not have these provinces pay slightly more federal tax and lowered the federal tax for NL, to try and equal things out. It doesn't feel like anyone but Newfoundlanders are looking out for us, we are the forgotten ones or the ones people would like to forget!
Excellent work Travis!! NL needs more people like you.
Hello Travis.
It seems your idea isn't without precedent. A commentor over on Marine and Mountain forum had this to say. Very good info to put to Mr williams to further your and our case to save our province from certain doom if people don't get involved.
http://www.mmzc.com/forum/topic.asp?TOPIC_ID=3440
Comment by Charlie_Header
I went to college in Alberta and one of my roommates was from NWT. They have the same type of program and as long as you come back there to work for I think its 5 years, they erase your student loans. If you chose not to, then you have to pay them back. They even give you travelling expenses and stuff. Its a great program.
I have lived away from NL for a while now, my husband is a student with a BC student loan and we are in Ontario while he is going to school to be an optometrist. If we go back to BC when he is done and he works for I believe 4 or 5 years, then he will get his loans forgiven, because he will be a doctor.
NL should really look into programs like that.
As for those of you who said you had to leave because of your chosen field didn't have any available jobs maybe a program like this would help develop and encourage people like yourselves to become entrepreneurs and start enterprises in your chosen fields. Baby steps and faith in our own people is what we are saddly lacking and which Upper canada continues to force us into doubting ourselves. Culture of defeat sound familiar.
Travis you should run what you have by the blog to see if anyone can help with your proposal. Were all here rooting for you and by definition ourselves and our children and grand children.
I have recently gotten married. My wife and I would *love* to start a family, but are unable to, owing to my student debt load. Thus, there is a clear connect between my student debt load and my inability to begin a family as quickly as I would like.
As I see it, eliminating the interest on loans that were provided (to obtain an education and contribute to society) would benefit the Province's economy more, by stimulating growth, than minimal monthly interest payments this Province currently receives. The long-term benefits far outstrip the government's short-term gain.
I understand your issue but I have a different perspective. My husband had student loan debt - close to $50,000 mine was smaller. We had a monthly payment of over $800 a month. And we finished post-secondary 10 years ago. At the time we paid more in student loan payments then our mortgage payment. But I always looked at our education as an asset for our entire future that would never depreciate in value for us. And it has been exactly that. Our student loans are now long gone and we both have excellent jobs in this province. Education is an investment into your future much the same as a house in an investment. So making the payments didn't upset me even though we had to sacrifice during that time. I also recognized that even though we needed loans to go through MUN, MUN itself is subsidized by government - almost $150 million a year. So I also recognized and appreciate that we were given somehting in that regard. If the government did not subsidize MUN then we probably would have had to pay a lot more. I just wonder your thoughts on that. It's just a different way to look at it.
Travis,
Congrats on setting out to change the situation for students in debt, that live in this province, but get unfair treatment to obatin an education. Foreigners attend our education factilities and enjoy a much cheaper cost of learning than in their own province, or country, but yet as natural residents we bear the brunt of student debt burden.
Student loan programs are great ways for a yound person to obtain an education but upon graduation those very students are faced with a personal burden that is similar to a mortgage, except that the only thing creditors can take is your integrity - to which you have little control of controlling in the economic situation in this province. Students choices are 1) to leave, 2) to default, 3) to pay back double or triple the original loan amount or 4) to live in debt until you retire!
A program should be incorporated not after a student graduates but during their schooling. For example, a good program would start from the first day of educational classes, based on the merits of marks, attendance, participation and of course graduating. Marks, attendance and participation is already monitored and would not need capital to monitor. Although this would have it's own worries, currently their are no incentives to pay off your loan or for that matter get an education, to simply put yourself in debt. Why would a young person go to school now to pay $60,000 in loans when they could go to alberta and make that the first year working with grade 12?
If only we could get rid of the insane interest on student loans! I graduated from Memorial University in 2004 with a B.SC. I had intended on going on to do Dentistry but was so far in debt I was discouraged. Instead, I boarded a plane to Fort McMurray and landed a job as an environmental analyst making $28.50 an hour! The cost of living is ridiculously high, but I am making more than the minimum payment on my student loan, I have a car and when all the bills are paid I still have a few dollars in the bank! But it was so hard to leave home and my family behind. I visit as often as I can and would love nothing more than to be able to move back eventually....but preferably before I'm 50....it seems that's how old I'll be when my damn loan is out of the way....It's really too bad that I had to leave...instead of staying in Newfoundland to work and raise a family....as someone else mentioned, the money we would save by cutting out the interest on our student loans would allow us to take a few steps ahead instead of always feeling like we're going backwards! Out-migration is such a big concern right now for the province of Newfoundland. Cutting out the interest may be one solution to help fix it.
I'll be keeping my fingers crossed:)
I completed my Bachelors degree at MUN in 2002 with almost $40,000 in principle and interest oweing. I was fortuante to have parents who offered to let me take some time to work abroad while they paid my monthly bill of $300 while I figured out what I wanted to do with an Arts degree. I came home to go to school again, to pursue my Masters, adding more money to the mix through student loans. I cannot afford to stop going to school because NO ONE will pay me enough to live AND pay my loan. I choose life and so I'm back to school in Jan to complete my PhD (more loans yes), but the intent is to hope that when I finish, someone will hire me and pay me enough so that I can afford to live and pay my loan back.
My biggest fear is that if the government knock off the interest, it will be with the catch that we must stay in Newfoundland. While I love Newfoundland, there isn't a place for me here. I am sure no one will pay me enough when I graduate again. There should be no stipluation on interest coming off our loans.
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