By Canadian Press

Risk of student loan defaults rising, say documents warning ‘system is broken’

Jul 31, 2019 | 8:04 AM

OTTAWA — Federal officials warned in a presentation earlier this year that the risk of student loan defaults and delays was on the rise, noting bleakly: the “system is broken.”

Federal student debt alone is approximately $17 billion and the federal government has to regularly write-off millions of dollars in loans it will never collect.

The documents, obtained by The Canadian Press, say the costs for post-secondary education have increased at rates “above wage growth and inflation” over the last decade, while the cost of living has also jumped, creating an affordability crunch for new and graduating students.

And yet, the documents acknowledge that post-secondary education is a must for many entering the job market.

Recommendations for how to address the problem were redacted from the documents, but student groups say they should include more non-repayable grants and waiving interest payments on student loans.

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The Canadian Press