HALIFAX—“At times, I wanted to disappear forever and not bother anyone with my stupid money problems,” recalls Jane (not her real name), who, like many other graduates in Nova Scotia, accrued tens of thousands of dollars of debt in student loans over the course of her university education. In her thirties, Jane’s debt is over $60,000 but under $90,000. She is currently filing for bankruptcy, and her financial and legal counsellors have advised her not to publicly discuss the particulars of her case.
“I made the decision to declare bankruptcy because it was the only option available to me,” says Jane in an email interview. “I owed a lot of money from student loans and debt from private institutions…I realize that yes, I did sign a contract to help me attain my education, however with a reasonable expectation that I was going to find a job and be in a position to pay the money back. Well, the fairy tale didn't work out for me and I am desperate for the chance to move on with my life.”
The average Nova Scotia post-secondary student graduates with a debt of $31,000. Under Canadian law, former students must wait seven years before they can apply for discharge from student loan debt. No other type of debt has such restrictive discharge restrictions applied to it.
In a 2008 study of the 2003 graduating class of Maritime Universities, the Maritimes Provinces Higher Education Commission found that of those who had borrowed over $30,000, a full seventy-nine per cent were making payments on outstanding loans five years after graduation. Twenty-one per cent of those surveyed still had outstanding debt at or above $30,000.
Forcing former students to prioritize their debt payments over everything else hurts not only students, but the larger economy as well, according to Elise Graham. Graham is Chairperson of the Canadian Federation of Students (CFS) -Nova Scotia, as well as a student at the Nova Scotia College of Art and Design (NSCAD).
“Students who graduate with $31,000 debt are leaving the province,” says Graham. “They’re going to find jobs that are not necessarily in their field of study, just what pays.”
Numerous studies, including “Educational Debt Burden and Career Choice”, published in 2006, demonstrate the link between a students’ debt load and the career they choose. When debt loads are high, students will opt, out of financial necessity, for higher-paying career opportunities. Newly graduated lawyers with heavy debt loads are less likely to choose to practice public interest law. Heavily indebted graduates with degrees in medicine are less likely to choose careers in research, or internal medicine, and will instead opt to specialize in higher-paying fields.
The financial difficulties that stem from an inability to repay debt are also linked to emotional and physiological distress, according to several studies, including “The impact of financial circumstances on student health”, published in 2005. As Jane’s debt load reached a proportion she could not control, she found that her own mental health was failing.
“One thing that is important to understand is the toll that these massive debts can take on a person's ego,” says Jane. “It was intimidating admitting the sheer scale of the debt to myself and figuring out how long it was going to take for me to pay it back, and those figures were absolutely insurmountable considering my current income. My self-worth took quite a beating and the stress of always worrying about money negatively affected my relationships with loved ones and close friends. I would often feel very ashamed as though I had done something terribly wrong.”
Where affordable education is a priority, governments find the money to keep tuitions reasonable. In Sweden, Norway, and Denmark, university is completely free for EU passport holders. In France, Germany, Italy and Spain, tuition for EU residents is nominal. In Nova Scotia, which flaunts itself as “Canada’s Education Province”, the average tuition is $5,495, several hundred dollars above the national average. Nova Scotia may have more universities and colleges per capita than anywhere else in the country, but tuition fees, until 2009, were the highest in the country for over twenty years. And the recently published “O’Neill Report”, commissioned by the provincial government, suggests that future students might find their debt getting bigger still.
In September 2010, Nova Scotia Premier Darrell Dexter commissioned former Bank of Montreal executive vice-president, Dr. Tim O’Neill, to prepare the “Report on the University System in Nova Scotia.” The language contained within the report, such as “severe recession”, “fiscal responsibility”, and “spending restraint”, hint at a provincial government looking to tighten its belt on post-secondary education expenditures.
The “O’Neill Report”, as it has come to be known, recommends a complete deregulation of tuition fees, while earmarking a percentage of tuition revenue increases for student assistance. This model, known as a high fee/high aid model, stands to drive up-front tuition fees through the roof.
In one scenario recommended by O’Neill, the CFS found that in five years time tuition and ancillary fees for Nova Scotia students would cost an average of $11,630, an increase of 86 percent. Rates would be even higher for out-of-province and international students, who together currently make up forty-one per cent of the Nova Scotia student body. Through a complex process, requiring new levels of administration, students would stand to recoup a percentage of their up-front tuition payments, based on their income levels. But many fear that the high sticker price will be an immediate deterrent.
“I think sticker shock will be sufficient to divert the people who really ought to be going to university,” says Dr. Laura Penny, lecturer at Mount Saint Vincent University and best-selling Canadian author. “So the student aid top-ups are a moot point. Students have to be part of the system to access aid. But the higher tuition goes, the more the system is perceived as strictly for the elite.”
A University of Toronto study highlighted by “The Tuition Trap”, a 2005 report commissioned by the Ontario Confederation of University Faculty Associations (OCUFA), supports Penny’s theory. The study found that over seventy per cent of students in the law department come from high-income families. Tuition fees at the U of T faculty of law are currently over $20,000 per year.
The Tuition Trap also highlights the fact that during the several-year period when tuition for medical school in Ontario increased from $5,000 to $14,500, enrolment of students whose families earned less than $40,000 dropped significantly, from 23 percent to 10 percent.
O’Neill, who declined to be interviewed for this story, argues that targeted assistance will offset the proven link between increased tuition fees and decreased access.
But nowhere in his 188-page report does O’Neill provide any formula indicating how this “high aid” is to be calculated or distributed. And a 2005 report by the Ontario Confederation of University Faculty Associations showed that increasing public funding, not tuition, was the best way to ensure access to education for both low- and middle-income students.
In this light, the mood of unease and suspicion amidst Nova Scotia students, staff, and prospective students, is appropriate.
“Raising tuition makes our universities less competitive,” says Laura Penny. “We're already losing Nova Scotia students to Newfoundland. Given that students and staff have a huge economic multiplier effect - especially in small college towns like Antigonish and Wolfville - this strikes me as a short-sighted economic strategy, a cheapness that may not turn out to be cheap at all, in terms of lost revenues and spinoffs.”
Elise Graham agrees.
“Newfoundland and Labrador have very low tuition fees [on average $2,500], coupled with a significant amount of government funding, and their student population is growing,” she says. “Other students are leaving other provinces and going to Newfoundland, because they can afford their education.”
“If Nova Scotia is serious about wanting to rebuild the economy, [it shouldn’t be] saddling our young people with debt,” says Graham.
Judging by the tens of billions of tax dollars that are now being ear-marked for prisons, military, and, perhaps closer to the minds of Nova Scotians, a multi-million dollar convention centre, many wonder if the “severe recession” conditions that O’Neill refers to in his report even exist.
“This government is spending millions on building a trade centre, and are cutting millions from their education budget,” says Judy Haiven, a professor at the Sobey School of Business at Saint Mary’s University. “That’s a direct subsidy to the business class, and a removal of subsidies from those that need education.”
“We as a society benefit from an educated workforce, and we need to create a tax structure where education is reasonable, or free. If higher income earners paid $800 more in taxes towards education, we could be offering free or highly subsidized education to all those who wanted to go,” says Haiven.
Canadian Federation of Students-Nova Scotia is planning a day of action on February 2nd. Student activists are urging those who stand to be affected by deregulated tuition, in effect all of Nova Scotia and beyond, to attend and show their solidarity with the next generation of university graduates. Graham is calling for “Canada-wide support in our fight against the O’Neill report.”
As for Jane, her bankruptcy trial looms.
“I feel awful knowing that student debt is rising, and thinking about the students that may have to go through what I went through is terrible,” says Jane. “If education is a priority, then it should be accessible to everyone and not be a pair of concrete boots forced onto those who don't have wealthy parents.”