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Through Heidi lee and Mariam Nouser
In March 2020, the Government of Ontario ad it would temporarily suspend all Ontario Student Assistance Program (OSAP) payments and interest until the end of September 2020. As of October 1, OSAP borrowers are required to repay their loans as usual .
The National Student Loans Service Center (NSLSC), which is responsible for the distribution and collection of student loans, has announced that students in Ontario, British Columbia, Newfoundland and Labrador , New Brunswick and Saskatchewan obtained a freeze on federal and provincial student loans. refunds from March 30 to September 30, 2020.
On November 24, the House of Commons unanimously passed a motion to postpone student loan repayments until May 2021. However, there is no update yet on whether or not this is the case. there will or will not be another extension of the moratorium on student loans.
The unemployment rate reaching an all-time high of 13.7% in May 2020 according to Statistics Canada, new graduates struggle to find jobs that allow them to repay their monthly loans.
Roshanak Aktefan, a fifth-year sociology student, plans to graduate in June, but currently does not have a job.
Although she is currently looking for a job, she said she was still worried about finding a suitable job that could help her pay off her student loans.
“Whether it’s returning to my current job at Ryerson this summer or finding a job in retail, I’m flexible as long as it pays,” Aktefan said.
She added that she wanted to go to college to get a social work degree because she didn’t think she could get “a good paying job” with her current degree in this work climate.
“In some academic books, young people aged 18 to 24 and new graduates are called the lock-down generation”
Behnoush Amery, senior economist at the Labor Market Information Council, said young people between the ages of 18 and 24 and recent graduates are called the “locked generation” in some academic literature.
She added that this “lockdown generation” is “facing multiple shocks from this pandemic” which both create short-term consequences such as unemployment; and long-term consequences, such as longer periods of unemployment due to difficulty in finding a job.
Another consequence of the pandemic is “prolonged underemployment,” which means students find inadequate jobs for which they are overqualified based on their degrees. These jobs pay low wages and offer limited hours.
The impact of prolonged underemployment can be very serious, especially for young people who are also immigrants, women and people with disabilities, according to Amery.
Amery said the prolonged underemployment of young people will not only negatively impact the economy, but also the well-being of those of the locked-in generation.
She said underemployment usually occurs when a new graduate or an experienced person works part-time involuntarily because there are no full-time jobs available. It also happens when a person accepts a job that “does not reflect their actual training and skills”.
“Either way, they can earn less than they’re capable of,” Amery said. “Earning low income for a long time can affect their ability to repay their loans. [and] may take longer than expected, which, again, impacts the well-being of this generation. “
Ontario graduates call for another refund freeze
When the federal student loan repayment freeze ended last October, Patty Facy launched the Freeze NSLSC campaign to advocate for an extended postponement of student loan repayments.
Facy, who graduated last spring from the University of Toronto’s Faculty of Information, said she and her colleagues felt that a six-month non-repayment grace period was not was not sufficient for recent graduates.
“The purpose of the campaign is to bring to the government’s attention that recent graduates are having a hard time during COVID,” Facy said. “Not just recent graduates, but also any former student with loans.”
When it all came to a standstill in March, Facy said she was stressed out about finding a job because she had to start paying off her student loans.
“I’m worried [that the class of 2021] will end up doing the same things we needed to do, ”she said.
The campaign launched a petition last November, he urged the House of Commons to extend the default period on federal student loans by six months.
“The petition was originally made in the fall for the class of 2020, but all of the terms really apply to the class of 2021 as well,” said Facy. “We really hope this sets a precedent to provide relief to new graduates.”
“Everyone wants a refund freeze,” Facy said. “We’re not saying we’re not going to pay, we’re just going to say we want to freeze the interest and the loan until now.”
She added that while government grants like the Canada Summer Jobs Program and the Canada Student Emergency Benefit could help students, the supports essentially stop when they graduate.
“Implementing a loan freeze now is the only way to give some economic relief to all new graduates trying to transition from student status to being in the Canadian workforce,” said she declared.
“I’m afraid the 2021 class will end up doing the same things we needed to do”
Daniel Lis and Taylor Leppik, Ryerson alumni in politics and governance, also launched a petition on February 24, demanding another freeze on student loans, as well as improved services to the NSLSC. As of March 11, the petition had collected more than 17,000 signatures.
Lis said they started the campaign because he saw how the economy and “the insane amount of student loans” wreaked havoc on students during the pandemic.
Leppik said after the freeze ended in October, his payments restarted in November 2020 with more money withdrawn from his bank account than before the pandemic. When she inquired about the possibility of taking out a loan for her credit card payments, the bank informed her that her credit score had fallen below 600 points.
“That’s when I had a breakdown. I didn’t know what to do, I felt completely hopeless, ”said Leppik.
Living together in West Toronto, Leppik and Lis said they had no choice but to give up their lease in March due to their financial situation and would return to live with Lis’ family in may.
Leppik and Lis both work full time, while Leppik works part time to keep his student loan payments up to date. However, Leppik said she still hasn’t been able to meet the minimum payout in the event of an automatic withdrawal.
“That’s when I had a breakdown. I didn’t know what to do, I felt completely desperate ”
Chris Glover, MPP for Spadina Fort-York and New Democrat Party (NDP) spokesperson for colleges and universities, said the Ontario government must continue to freeze OSAP payments until the end of the pandemic.
“[The NDP] worked with the Canadian Federation of Students with support from the College Student Alliance and the Ontario Undergraduate Student Alliance to call on the government to freeze payments, ”Glover said. “The students reached out and said they lost their jobs or had reduced income and are forced to choose between groceries and paying off their OSAP debt.
Glover noted that the government also cut $ 670 million OSAP funding as well as the elimination of the interest-free grace period for new graduates.
He added that OSAP cuts have resulted in students who leave their studies or take more work to finance them.
Glover said that while the cost of tuition is rising at a rapid rate, it is not in line with the money families and students are making. When Glover went to college in the early 1980s, he was costing around $ 1,000 a year for his tuition. Now a degree like engineering can cost over $ 11,000 for domestic students at Ryerson.
Challenges of the repayment assistance plan
While graduates can apply for the Repayment Assistance Plan (RAP), Leppik and Facy said students face a lot of confusion and difficulty when trying to contact the NSLSC.
According to them website, the NSLSC has received a higher than usual volume of RAP applications and is experiencing a backlog in processing applications.
Leppik spent a few weeks trying to find a representative at the NSLSC to apply for RAP. She said the system did not allow her to file her application online.
Ultimately, the request was denied and Leppik had no choice but to continue the payments. A few weeks later, in December 2020, she received an email from the NSLSC telling her that she might be eligible for the assistance plan and was recommended to reapply. On February 22, she received another email informing her that they were experiencing “processing delays” so that she could have a response within three weeks.
Facy said after getting her six-month grace period, she was due to start repaying her loan in October. Without the loan freeze, his only option was to apply for RAP.
“It took them months to even respond and [because it is] online, people can’t even reach their call centers, ”Facy said.
“I might be lucky in the sense that I was able to get approved for the PAR, but it’s not really a supportive measure because it’s so hard to work with and it’s so stressful. for people who have to trust it.
CORRECTION: A previous version of this article stated that Lis and Leppik returned to their parents in March. Lis and Leppik recently gave up their lease and will be returning to Lis’ parents in May. The Eyeopener regret this error. This article has also been updated to reflect the most recent correspondence from Leppik regarding the Repayment Assistance Program.