Canadore On The Hook For Loan Defaults

Canadore College Board of Governors where stunned to learn last night that the college is financially responsible for students who have defaulted on their OSAP loans.

Board members where informed during the regular monthly meeting, that the college’s default rate had surpassed the 25% threshold to 28.9%.

“As we said in the meeting, it’s an early warning from the ministry that there’s an issue that we have to look at,” states Candadore College President, Barbara Taylor.

“This fluctuates year to year, I mean we’ve been actually doing quite well, and that this year we saw a fluctuation, and again this relates back to three years ago in terms of loans issued.”

Taylor says it is important for the college to support the students in loan repayment as much as possible.

“Because sometimes it’s a financial management issues for students, things get out of control, they run into some problems when they leave and they’re not aware that they can get OSAP deferrals. So some of it is increasingly support to students. The other thing though, I expect we will see decrease in that default rate is because we we’re working on improving on the retention rate.”

Taylor says that as the school’s retention rates continue to grow they will see less OSAP defaults in their students, because historically the person most likely to default is someone who drops out and doesn’t complete the program.

The board also learned that being on the hook for the defaulted loans could potentially mean a loss of $60,000 in operating grants for the 2009 year. This doesn’t sit well with the board drawing statements like ‘I’m highly offended’ and the act is ‘discriminatory’.

“We’ve had some ongoing discussions with the Ministry of Training Colleges and Universities over the 8 years now that this has been in effect,” says Taylor.

“I understand the need for public accountability. This is public dollars you and I and our neighbours are paying the taxes that provide the funding, so there has to be accountability, and obviously the college has a role to play in working with students to make them aware of their responsibilities and that when they graduate they repay their OSAP.”

“Again it’s a little more difficult when it is someone who drops out and doesn’t complete a program but still we need to be doing that due diligence to them though say that down the road the institution itself has to potentially take some responsibility for repayment it’s kind of an interesting slant on it. “

Taylor agrees with her board that there has to be a better way of dealing with defaults other than the Default Sharing Requirement.

“We have a number of years before we would be liable and as long as we get that default rate back down again, we’re certainly again focusing on that both through retention initiatives and increased attention to how we inform our students when they do receive loans, I’m pretty confident we’ll get it back down again.”

“Having said that I would argue it’s unfair to hold the institution ultimately accountable for money that the institution doesn’t control.”