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Amanda Hu/the Gauntlet

Going for broke

In university, nothing is certain but debt and taxes

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Fifth year philosophy majors aren't typically known for their financial prowess and Jordan Fritz is no exception. However, for the first four years of his University of Calgary career, Fritz managed to avoid going into debt by working in Fort MacMurray while staying at his parents' home during summer months.

"I worked for the city doing forestry, that was before second year, and every other year I've just worked for my mom at her office," says Fritz. "I was accounts payable, it sucked. Honestly, going to Fort Mac for four months straight after living in Calgary all year is, like, life destroying."

After having his fill of Alberta's oil capital, Fritz decided to stay in Calgary this summer to take courses and hopefully land a decent part-time job. Given the recent economic climate, however, this proved more difficult than planned. Unable to find work, he applied for a combination of provincial and federal student loans totaling $12,000.

"On average, a student graduating from an undergrad degree graduates with about $25,000 worth of debt," says Canadian Alliance of Student Associations national director Arati Sharma. "In the Maritimes it is slightly higher because their cost of education is slightly higher as well."

This figure is almost $10,000 more than the average amount last year, mainly due to students unable to find summer work. Student unemployment, categorized as those between 18 and 24 years old by Statistics Canada's Labour Force Survey, reached 20.9 per cent this July- the highest it's been since 1977. Despite this, the government still factors in a certain contribution from summer jobs when calculating a student's need for financial assistance. CASA, the U of C's national lobby group for student interests, is trying to remove the expected summer contribution until the economy recovers.

On top of your summer job, the Canadian Students Loan Program subtracts what it assesses to be a reasonable parental contribution based on income and number of dependents. According to their online calculator, Albertan parents making $125,000 a year with two full-time students are expected to fork up just under $3,000 per child each year for education. Those married to students are expected to contribute $200 every month if making minimum wage, and more with higher income.

Luckily for Fritz, he's been out of high school long enough not to be considered a dependent. In previous years, he had been denied due to his parents' income.

"They make a lot of money compared to other people in Canada, but in Fort Mac, they actually don't make very much money. We're kind of like middle class," he says.

"In Alberta our income is a lot higher than everywhere else, but it also costs a lot more to live here and I don't think they consider that when they look at your parents' income and decide whether you need funding."

Even CASA's director was unable to receive assistance because of her parents' income. She understands that in an "ideal world, obviously we want parents to support their children," but thanks to the recession and the rising costs of textbooks, rent and tuition, that isn't always possible.

Even the government's attempt to help students pay back their loans is half-hearted. A new Repayment Assistance Plan was put in place to help students with low or nonexistent wages make their payments manageable. However, if you default on several payments, you're no longer eligible for the plan and have to revert back to regular payments.

"If you don't have any money, you're the most in need of a plan," says Students' Union vice-president external Kay She. "They're saying, 'Sorry, you have to make up the last three payments.' Then where does that leave those students essentially? You're in trouble and the Repayment Assistance Plan doesn't assess that."

The Council of Alberta University Students, where She is vice-chair, is a provincial lobby group focusing on student debt this year. They rotate priorities every few years to line up with "hot topics" in provincial politics, and debt is finally back in the lime light after being a side issue for too long.

One of CAUS' primary goals is to lower interest rates on federal student loans, which are often higher than private bank loans. Alberta's loans are currently at prime, federal ones equal prime plus 2.5 per cent, while bank loans are typically around prime plus one per cent.

"We don't want students to turn towards credit cards or private lines of credit," said Sharma. "Credit cards have an average interest rate of 18 to 20 per cent for students and then the issue is that there really is no security when you're trying to pay back your private credit card or loan, and you incur interest during your studies."

Fritz admitted that his credit card was "pretty much maxed out" before his loan arrived, and he's still working on paying it down. His family took a different approach when his brother went to art school, applying for a line of credit from their bank at prime plus 0.75 per cent. Unfortunately for most students, banks give out loans based on ability to pay, not need. This leaves those who need help the most out of the loop.

"All the required classes I need aren't even offered this year, which means I'll have to get even more loans probably," says Fritz.

There is hope says She. The SU is hosting Debt City Oct. 6–8, where students will camp out to raise awareness on the issue. They'll be asking the government to increase the number of non-repayable bursaries and grants for students, or at least tie them to inflation (for the past several years, the U of C has matched tuition increases with inflation). This way, funding will stay proportional to tuition costs.

The SU is also looking for help from municipal figures. Rent is a huge burden for students and while some progress was made legalizing secondary suites in the city last year, wards near the university still have a confusing and tedious process for setting them up. In some areas, individual property owners have to ask permission from the alderman and their case is discussed in council meetings. A streamlined process would increase the number of cheaper rental options and possibly save students hundreds of dollars every month.

Altogether, cheaper housing, lower interest rates, more needs-based bursaries and better repayment options will make post-secondary education more accessible.

"The fact that we either have to take out loans or work while we go to school, it seems that the government doesn't really consider being a student a job," says Fritz. "If your going to do well, you have to devote all of your time to it."

He recently got a letter explaining that after graduation, he'll be expected to pay a minimum of $89 a month, which means it could take him over 11 years to be debt free.

"Most of our universities are designed to churn out bachelors and then they go get a job, which is kind of the opposite of what I'm in university for."

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