Parental contributions on longer count for N.B. student loans
Change could widen gulf between rich and poor students, prof says
WILLIAM WOLFE-WYLIE CUP ATLANTIC BUREAU CHIEF
SACKVILLE, N.B. (CUP) — Students in New Brunswick no longer have to report their parents’ income when applying for a student loan, but not everyone is singing the praises of more accessible student loans.
“We will also follow through on a day-one commitment by removing parental and spousal income from the assessment of New Brunswick student loans effective August 1, 2007,” said the Finance Minister Victor Boudreau in his 2007 budget speech last week.
“This initiative will cost the government an estimated $7 million to implement in 2007-08 and will help improve affordability and access to higher educational institutions for all New Brunswickers,” he added.
But that’s exactly what some observers are worried about. Dale Kirby, a professor of post-secondary education studies at the Memorial University of Newfoundland, fears that the change will only increase the divide between rich and poor students.
“I am skeptical of this claim,” he wrote in an e-mail. “By removing parental [and] spousal income from the assessment of student loans amounts, the N.B. government will now be providing a greater public subsidy to those who can most afford to attend post-secondary education.
“This is neither equitable nor efficient.”
Currently, parental contributions to students are calculated based on what is called the “discretionary income” of a family. A table compiled by the federal Ministry of Human Resources and Social Development allows a family to determine how much of their annual income is available to be spent on education. According to a report published by the New Brunswick Student Alliance in 2006, this amount is then deducted from what a student is eligible to receive in the form of a provincial student loan.
“This means that the future of the student relies on the ability and/or desire of their parents to pay for their education, and hardly ensure that ‘all qualified student have the opportunity to reach their educational potential,’” claimed the report.
“Denying someone access to a loan because of the choices made by their parents puts that individual at a noticeable disadvantage.”
Colin Banks is the vice-president (executive) of the New Brunswick Student Alliance, a provincial student lobby group. He has mixed feelings on the announcement, believing that while it will certainly benefit some students, it will do nothing to address the overall issue of student debt.
“I’m really of two minds,” he said. “It does nothing to solve the problem of student debt.”
Providing the same benefits to all students regardless of their financial situation would benefit some much more than others, but not necessarily the way the government is imagining.
“It targets the middle class,” Banks said.
Students from higher-income families, he argued, will now be able to apply for larger student loans and invest that money, placing them in an even more advantageous situation after they graduate. Meanwhile, he said, “they’re taking away from the pool that could otherwise go to low-income students.”
According to Banks, the $7 million that was invested into this new program would have been better spent on targeted needs-based grants.
The elimination of parental and spousal contributions from student loan assessments is part of the Conservative government’s package of promises in their fall election campaign. Accessibility of post-secondary education is one of a series of manoeuvres designed to make the province more economically sustainable.
One dimension of that is the low skills training and literacy rate of the province. The 2007-08 budget is also boosting funding to adult literacy centres, the public education system, and local community centres.
