Privately run post-secondary institutions have been warned: if students don’t pay back loans, future students could lose access to government loan funding.
Last week, StudentAid B.C. stripped 13 schools of their official designation and left students attending those institutions faced with funding their education independently. Since 2006, post-secondary institutions that have default rates – the percentage of student loan borrowers with loan payments in default – above 28 per cent for four or more consecutive years are subject to a designation review by StudentAid B.C. Designations are revoked for a minimum of two years.
No schools in Greater Victoria were affected by the recent crackdown. The closest was Sprott Shaw Community College’s Duncan campus, with a default rate of 38 per cent in 2010. John Predyk, vice-president of operations for Sprott Shaw Community College, confirmed that the majority of their students are funded through student loans. He calls the decision a disappointment and one that will affect students with the most barriers to education.
“By closing campuses in those communities, they’re limiting prospective students’ access to education they might not otherwise be able to get through the public system,” Predyk said.
The decision to pull publicly-funded student loans is intended to protect students from unreasonable financial risk and serve the best interests of the public, wrote Minister of Advanced Education, Naomi Yamaoto in a statement to the News.
“It is important to note that in such circumstances, an institution does have the right to appeal the decision, or, after two years, can work with the ministry to request that the decision be reconsidered,” she wrote, adding that the loss of funding should not directly impact a school’s ability to operate.
Sprott Shaw has been in talks with the ministry to ensure that student funding stays available for students attending the Victoria campus, which has been above the 28 per cent default standard for the last four years. While under review, the ministry has asked schools to have a plan in place to ensure that default rates stay as low as possible. For Victoria, this includes limiting or restricting programs that have a high rate of default, as well as limiting access to students who have a higher unmet financial need on student loan applications, and a traditionally higher rate of default.
“At the end of the day it’s the student’s decision whether or not to pay their student loan,” Predyk said. “You’re penalizing other prospective students for the actions of students who may have come to school four years ago.”
2010 default rates per cent of borrowers in default (haven’t paid loans in 150 days or more)
University of Victoria 4.2
Camosun College 11.6
Aveda Institute Victoria 13.8
Academy of Learning Victoria 17.2
Sprott Shaw Community College 30.8
University Canada West (Victoria) 20.0
University Canada West Academies 18.8