{"id":1140,"date":"2010-12-21T08:48:32","date_gmt":"2010-12-21T13:48:32","guid":{"rendered":"http:\/\/www.cusjc.ca\/ottawainsight\/?p=1140"},"modified":"2017-11-19T17:35:31","modified_gmt":"2017-11-19T22:35:31","slug":"money-management-mess","status":"publish","type":"post","link":"https:\/\/www.cusjc.ca\/ottawainsight\/?p=1140","title":{"rendered":"Money management mess"},"content":{"rendered":"

Christian Faigen came to Algonquin College in Ottawa from the\u00a0 Ottawa Valley town of Eganville five years ago to study computer engineering technology and had to borrow money to pay for it. <\/span><\/p>\n

That decision to go into debt changed Faigen\u2019s life.<\/p>\n

\"\"<\/a>A tough year and all that debt too.<\/p>\n

Taking on student debt is getting riskier.\u00a0 Students hope education will\u00a0 give them a\u00a0 good job =\u00a0 that makes it easier to pay back their loan. These days though\u00a0 if\u00a0 those who make it through school,\u00a0 may\u00a0 discover the well-paying jobs are hard to find or just not available.<\/p>\n

\u201cThe student debt crisis is a national economic syndrome plaguing Canadian youth,\u201d says Jean LeBlanc, owner of Canadian Financial Wellness Group, a credit counselling service on the east\u00a0 coast. \u00a0\u00a0 \u00a0It\u2019s getting harder for Canadian youth to pay for post secondary education, and it\u2019s just as hard for them to stay enrolled, says LeBlanc.<\/p>\n

\u201cThe economic barriers are just too many.\u201d<\/p>\n

\u201cBut people are forced to grin and bear it,\u201d he says, \u201cBecause without education unfortunately people don\u2019t have a hope.\u201d<\/p>\n

For Faigen, the risk of taking on debt did not pay off.<\/p>\n

LITTLE ROOM FOR THE UNEXPECTED<\/span><\/strong><\/p>\n

He hit a\u00a0 tough semester. A salad dressing spill fried his computer\u2019s hard drive. He missed four labs and couldn\u2019t catch up.<\/p>\n

When he dropped the course, the Ontario Student Assistance Program (OSAP) said he no longer met their minimum 60 per cent course-load requirements to keep his full funding, says Faigen.<\/p>\n

\u201cIt basically came down to which is more important, roof over my head and my bills being paid, or school,\u201d he says.<\/p>\n

So he dropped out and now works night shifts part time at a Metro grocery store. He\u2019s been on welfare since November. He owes OSAP $16,000.\u00a0 a further $10,000 to a student line of credi and $2,000 on a credit card.<\/p>\n

Faigen admits he mad mistakes. He says his marijuana habit was also a factor in his school failure. It was his first time away from home and he went a little crazy, he says.<\/p>\n

He\u2019s not the only one.<\/p>\n

POOR JUDGEMENT<\/span><\/strong><\/p>\n

Young people leaving home for the first time are not used to having to manage so much money, says Joel Gris\u00e9, credit counselling coordinator for K3C Credit Counselling.<\/p>\n

\u201cI\u2019ve come into contact with a couple of people who have gotten their student loans and went to the casino and gambled it all,\u201d he says.<\/p>\n

Poor judgment is not the only reason debt causes students to drop out and have trouble repaying.<\/p>\n

The fear and stress associated with debt, and even the hounding of collection agencies, causes students to become depressed, frustrated and distracted from their studies, says LeBlanc.<\/p>\n

\u201cPeople fear that the size of the debt they own is going to survive them.\u201d<\/p>\n

But even students who make it through school have trouble repaying their debt.<\/p>\n

Students are facing higher levels of debt, and many of them can\u2019t find jobs in their field so they have to accept lower pay, says Pat White, executive director of Credit Counselling Canada.<\/p>\n

Students can try to decrease the risks by thinking about how realistic it is to find a job in the field they are\u00a0 studying, she says.<\/p>\n

\u201cI\u2019m sure that everyone has the expectation that they\u2019re going to do well, and they\u2019re going to get a job, and they\u2019re going to be able to repay, but from my perspective I would say you have to take off the rose-coloured glasses and really look at your career path,\u201d she says.<\/p>\n

PROGRAMS TO HELP<\/span><\/strong><\/p>\n

Even though education is\u00a0 leaving many students in difficult debt situations, there are many programs in place to help you get out of debt.<\/p>\n

The first is interest relief.<\/p>\n

If you can\u2019t get a good job when you graduate, then you can apply to stop OSAP from charging you interest on your debt, says Gris\u00e9.<\/p>\n

Interest relief lasts for up to five years.<\/p>\n

You have to catch up on your interest to go on interest relief<\/p>\n

Faigen has been on interest relief for three years already.<\/p>\n

You can only get interest relief if your interest payments are up to date, says Gris\u00e9. When you finish school you have six months to contact your national student loan centre to make payment arrangements, but a lot of people who\u00a0 believe they don\u2019t have the ability to pay just don\u2019t call, he says.<\/p>\n

Financial institutions start charging interest anyway, and after a few months,\u00a0 the accumulated interest might put the interest relief program out of reach, says Gris\u00e9.<\/p>\n

\u201cYou have to catch up on your interest to go on interest relief,\u201d he says.<\/p>\n

If interest relief still isn\u2019t helping, the next step is called revision of terms\u00a0 under which OSAP rewrites\u00a0 the student\u2019s repayment contract.<\/p>\n

\u201cThey bump your payment plan from 114 months \u2013 9.5 years \u2013 to 174 months, and it will reduce your monthly payments by about 25 percent,\u201d says Gris\u00e9.<\/p>\n

FORGIVENESS SOMETIMES<\/span><\/strong><\/p>\n

There is also the forgiveness program where government would just waive\u00a0 the debt, says White.<\/p>\n

\u201cIt\u2019s kind of like going bankrupt, but bankruptcy legislation doesn\u2019t allow anyone to include student loan debt unless they\u2019ve been out of school for seven years,\u201d she says.<\/p>\n

People were graduating, not finding jobs, and a year later\u00a0 declaring bankruptcy. The government says that\u2019s not fair to the creditors who would lose their loan repayments.\u00a0 believing that students should spend seven years searching for a good job before they can go bankrupt, says White.<\/p>\n

\u201cBankruptcy is never taken lightly,\u201d says Gris\u00e9.<\/p>\n

It remains on your credit file, in bold letters, for seven years, he says.\u00a0 Its also a public record, so any time you want to apply for a loan you have to tick the little box that asks if you\u2019ve ever been bankrupt, he says.<\/p>\n","protected":false},"excerpt":{"rendered":"

Christian Faigen came to Algonquin College in Ottawa from the\u00a0 Ottawa Valley town of Eganville five years ago to study<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[229],"class_list":["post-1140","post","type-post","status-publish","format-standard","hentry","category-personal-finance-2010","tag-mathew-klie-cribb"],"_links":{"self":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1140"}],"version-history":[{"count":14,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1140\/revisions"}],"predecessor-version":[{"id":4343,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1140\/revisions\/4343"}],"wp:attachment":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}