OPINION | Who Benefits from high student debt?

Predominantly, financial assistance has enabled better access to universities and colleges, albeit with some exceptions (namely for Indigenous students and students with disabilities) however, the repercussions of student loans has become debilitating. One study found that 36 percent of young adults identified the financial strain caused by attending postsecondary education negatively impacted their mental health. 

Despite this, students remain willing to undertake student debt in the hopes that the correlation between obtaining a degree and financial success remains positive. Yet, increased tuition rates for undergraduate and graduate students and the recent changes to Ontario’s student loan program have made the ‘purchase’ of education as a commodity more difficult to repay.

Perhaps Representative Ilhan Omar said it best in her tweet,  “student debt [is] the result of a two-tiered education system—one for the rich and another for the poor and middle class, who have to pay off that education for the rest of their lives.” Though Omar was referring to the situation in the United States, this statement pertains to all systems that commodify postsecondary education to the extent that it is now a prerequisite to enter the labour market, specifically for jobs that never required it before.

In 2016, the changes to the Ontario Student Assistance Program (OSAP) by Kathleen Wynne’s government provided a greater portion of financial aid in grants to alleviate students’ financial burden. Consequently, in response to the rise in grant funding, the 2018 Annual Report by the Office of the Auditor General reported that this would result in “fewer defaulted loans,” with defaulted loans totaling $69 million from 2013-2018.

However, this financial breathing room given to students didn’t last long. In 2019, Doug Ford’s government changed the rules, no longer providing “free tuition for low-income students” – with low income referring to those whose parents earned $50,000 or less. Although grants are still available to low-income families, they will not “cover the entire cost of tuition.” 

Simply put, this change in policy now ensures that students eligible for OSAP will have to take on more debt to access higher education. Progressive Conservative MPP, Merrilee Fullerton, defended the Ford government’s decision arguing these changes would “make the program more sustainable.” What she means by sustainable is vague and confusing, with these changes and the increasing difficulty in loan repayment due to job scarcity, continuing to restrict socioeconomic mobility. If that was the Ford government’s intent, then they successfully achieved their goal of program longevity. 

The neoliberal view of education has linked the need for higher education as crucial for socioeconomic mobility, however in reality, the only thing it has ensured is that elites stay in elite positions. For example, those in support of tuition fees argue that competition will increase the quality of education in the marketplace, with those in favour consisting of the Ministry of Education, universities, and business representatives.

If you’re wondering why business representatives have a vested interest in tuition costs, take a glance at private collection agencies. These agencies are paid “a 16% commission on the amounts [of loans] they recover” comprising an estimated $20 million over a five year period, paid for, by the Province of Ontario. 

An alternative model can be found in Nordic countries where their education is primarily publicly funded and rooted in the belief of education as a civil right – removing the degree marketplace. This framing extends from the understanding that a high level of education is imperative for a progressing society. 

This sentiment exists in Canada with some arguing that the removal of student debt would allow graduating students to help boost “Canada’s entrepreneurial ecosystem” by enabling them to start a business. One study published by Management Science found that there is a “statistically significant and negative relation” between obtaining student debt and entrepreneurship. 

But how do we change a system, when the ones with the power to do so, are the ones who benefit the most from the system in place? In a capitalist system such as this, the case for arguing the removal of student loans must be economically profitable, for a moral based argument will collapse. 

Policies that will eliminate the monetization of education are better for society and its ‘progress’. Education is the foundation of society and thus, treating it as a service that can be taken away will prevent Canada’s ability to move forward. Society does not benefit when a large proportion of citizens are burdened by financial debt due to education.

The views, thoughts, and opinions expressed in this article belong solely to the author, and do not reflect the views of Conversationally Speaking Magazine
Sophia Stavropoulos
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Sophia Stavropoulos graduated from the University of Ottawa with a Bachelor of Social Sciences, Joint Honours in Political Science and History. She is currently attending the University of Toronto for a Master of Public Policy with a Collaborative Specialization in Environmental Studies. Her research interests include politics, environmental policy, Indigenous issues, and American cultural & political history.

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