August 28, 2013

By Margaret H. Johnson

On August 13th 2013 the topic of student debt loads made another cameo appearance in the media under the heading – "Student debt loads are delaying too many life decisions".

Written by Don Cayo for the Vancouver Sun, the article drew attention to debt associated with hitting the books, and how this is causing increasing stress for BC students.

For me the issue of student debt opens up the proverbial can of worms regarding the practice of governments lending huge sums of money to its citizens for basic access to post-secondary institutions like universities and colleges. Estimates range from an average student debt after graduation of 28,000 to $34,886.

Is this the best way to help lower and middle income families? Is this the best way to fund universities and colleges – by granting loans to students to partially pay for the high costs associated with these post-secondary education institutions?

The lack of any reliable or valid research about debt generally and student loan debt in particular is troubling. I would suggest that it is a bit of a stretch to rely on bank statistics for a number of obvious reasons – and it seems that they are the only institutions talking about debt these days.

Assorted data regarding total consumer and mortgage debt levels and other details are often published, but we don’t know the whole picture - who actually owes the debt – what income and occupational groups, their family dynamics, the geographical regions, their ages, their marital status – married, divorced, separated, blended families and so on.

We know even less about student loan debt except for the default rate – which has been shaped by harsh bankruptcy laws that prevent student loan debtors from being treated with the same measure of dignity and respect as all other consumer debtors.

We don’t know how many student loan debtors suffer from impossible levels of debt before they are forced into a bankruptcy - from clinical depression to other debilitating health issues, marital discord, separation or divorce – or how many students are unable to find jobs or are underemployed or unable to gain control over their lives and enjoy the fruits of their expensive education for legitimate reasons.

We don’t know the breakdown of the insolvent student loan debtors into those from colleges, universities or the myriad of other diploma granting schools. In other words, how many of the student loan debtors have received diplomas or degrees in occupational or vocational areas where the prospect of employment is negligible?

Bankruptcy statistics do not break down the student loan debt information into any meaningful categories like divorced, married, family types or if the student loans were the cause of the bankruptcies. How many doctors, accountants or lawyers are filing for bankruptcy because of a massive student debt problem? How many of the student loan debtors in a bankruptcy have legitimate problems and causes that would otherwise be discharged like other consumer debtors?

And we really don’t know how the cost of post-secondary education resulting in huge personal debt affects relationships, when people marry or have children, or cause marriages and families to break down.

We do know that high levels of student loan debt is a deterrent for more and more middle and lower income groups to attending post-secondary education institutions and that many struggle with financial hardship frequently ending in a bankruptcy assignment because they tried to get better, higher paying jobs – jobs they would not qualify for without the education.


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