Ka-ching! Take it to the bank

This fall, students will still be able to cash their government student loans at the bank, despite the banks’ withdrawal from the Canada Student Loan Program. On July 31, Human Resources Development Canada announced participating banks would continue to disburse student loans until March 2001.

"We wanted to ensure that the banks getting out of the business would not negatively affect students," said Thomas Townsend, HRDC’s Director General of Learning and Literacy. "The big change is that the loan itself is coming from the Government of Canada rather than the banks."

The banks’ distribution of loans is a transitional measure for HRDC as they search for a service provider to permanently fill that role. The changes in the CSLP are occurring because HRDC and participating financial institutions announced in March that they could not agree on terms to continue a risk-sharing arrangement that began in 1995.

Student leaders are positive about banks temporarily continuing to disburse loans.

"This will mean a seamless transition; that is what we are hoping for right now," said Mark Kissel, National Director for the Canadian Alliance of Student Associations. "We are hoping students won’t notice the difference."

The biggest concern for students is to gain assurance that they do not have to pay their current student loans before they are finished school.

"I would advise students to keep their banks advised of their student status," said Duncan Wojtaszek, Vice-president External for the University of Calgary Students’ Union. "They should continue the service with the bank they have used in the past."

Townsend expects HRDC will put the contract for a service provider out to tender by November, and said interested parties will have to prove they will be able to deal with all the documentation involved in the student loan process.

"This confirms the commitment of the government to student financial aid and the student loan program," said Townsend. "We are excited about the opportunity to improve the program and the service we provide."

While Wojtaszek is pleased with the steps HRDC is taking to ensure proper distribution of student loans, he still has concerns about other aspects of the program.

"This does not affect needs assessment, interest rates or interest relief, which are looming problems with the CSLP," said Wojtaszek.

For more information on changes to the CSLP visit www.canlearn.ca.

Leave a comment

Your email address will not be published.