Business

How student loans keep some people trapped in debt – CBC News

Published

1 year ago

June 18, 2023

When Samuel Bonne received $15,000 in student grants to fund his studies, he wasn’t expecting to have to pay it back. But just two years later — in the middle of the pandemic — those grants were converted to loans.

At the end of his sophomore year at the University of Toronto, the Ontario Student Assistance Program (OSAP) asked Bonne, originally from Mauritius, for his parents’ financial documents, but they couldn’t provide them.

“My dad works in Kenya and my mom doesn’t work,” said Bonne. “So I ended up having $15,000 in loans that I did not know about.”

Bonne, who became a permanent resident in 2018 on humanitarian grounds, says there was no consideration for the fact that his parents were not Canadian citizens and didn’t have the relevant documentation.

What’s more, the interest on OSAP loans rose from 4.7 per cent when Bonne entered university in fall 2018 to 7.95 per cent this spring when he graduated with a degree in biological chemistry.

“That’s when the interest starts taking over,” Bonne said.

Bonne was grateful that he was able to find summer work and receive a research grant, which allowed him to get a head start on his payments.

“I’m just not comfortable with the idea of taking that [debt] for the rest of my life,” he said.

But he isn’t in the clear yet. Bonne enters medical school at McGill University in Montreal this fall — and, pending other scholarship funding, he’s considering taking on a line of credit from a bank, which offers medical students loans of up to $350,000 to finance their medical education.

Bonne isn’t sure what area of medicine he wants to pursue yet. But he wants to serve immigrants and other marginalized groups in Quebec, recalling a time after his family first came to Canada in 2009 when his sister got sick and they didn’t have a family doctor or a clinic they could go to.

“That’s a problem many immigrants face today. I don’t even have a family doctor; I’m still on a waitlist,” he said, darkly noting that he might be a family physician before he has one himself.

WATCH | Where are all the doctors?

Why is it so hard to find a family doctor in Canada?

7 months ago

Duration 7:36

As one in five Canadians struggle to find a family doctor, CBC News set out to learn what’s driving so many from their jobs, and visits a community that may have found a solution.

Bonne says he’ll take the funding he needs but no more, noting that he also doesn’t have family support in Canada to fall back on in a crisis.

“One bedroom, one desk — that’s really all I need.”

‘Gateway debt’

Bonne is far from alone in his struggle with student debt; 1.9 million Canadians owed the federal government a total of $23.5 billion in student loans as of July 2022 — a number that only balloons further when including provincial loans and private debt. More than half of those who pursued professional programs such as medicine took on bank loans or lines of credit, according to a 2020 Statistics Canada report.

Erika Shaker, the director of the national office at the Canadian Centre for Policy Alternatives, says this “gateway debt” perpetuates social inequality and prevents people from achieving financial independence.

“That debt that you graduate with sticks around,” she said. “It ends up with you postponing the choices that you can make, whether or not you can buy that house, whether or not you can buy a car, whether or not you can start a family.”

It’s a reality Ari Black knows well.

“I don’t have any financial goals. I can’t,” said Black, who teaches American Sign Language at Carleton University in Ottawa. “My financial goal is to make sure that I pay all of my bills, I don’t default on my student loan — and there’s groceries.”

WATCH | Petition takes aim at student loan interest:

Why Ari Black started a petition to eliminate all student loan interest

3 days ago

Duration 1:03

Ari Black, an instructor at Carleton University who teaches American Sign Language, explains why he started a petition to eliminate student loan interest in all jurisdictions.

Black says he’s been on interest-only payments since he graduated with a master of education from the University of Ottawa in 2019. As such, the student-turned-activist has made little progress paying off the principal. But he stresses that he had a little choice, especially given the limited income he makes teaching.

With the increasing interest rates, Black says his monthly payments will soon increase by $500 to $600.

“We already have people choosing rent or food,” said Black. “I’m not in that situation, but I’m close to it.”

Black says he calls the National Student Loans Service Centre every six months to request to continue with interest-only payments. But while he was grateful to hear that federal loan interest was eliminated in April, he was also informed that provincial interest would continue — and that there was a 12-month cap on how long he could make interest-only payments.

So after a final period of reduced payments, he says he’ll likely have to apply for a repayment assistance plan.

All this led to Black starting an online petition to eliminate student loan interest at all levels of government. It has roughly 74 signatures.

Shaker says eliminating interest is “the least that can be done.”

A photo of a woman. — Erika Shaker, the director of the national office at the Canadian Centre for Policy Alternatives, says student debt is a ‘gateway debt’ that perpetuates social inequality and prevents people from achieving financial independence. (Submitted by Erika Shaker)

“If we’re really looking at systemically addressing the issue, the answer is not more loans, not raising the loan ceiling,” she said. “It’s actually acknowledging that investing in post-secondary education is not just a commitment to the students who want to pursue it, but it’s a commitment to future innovation, future equity.”

High costs of higher education

Shaker says pressure to make loan payments can also trap many former students in a cycle of precarity as they take on “whatever job[s] they can” to make ends meet. Beyond that, she stresses that the increasing costs of higher education excludes those whose families can’t or don’t support them — and those who have children or other dependants of their own.

Average undergraduate tuition fees for full-time domestic students have risen from $534 in 1972-73 to $6,834 in 2022-23. These figures are almost double what they would be if tuition rates grew proportionally with inflation.

“We need a much more honest understanding of who is going to post secondary,” said Shaker. “Otherwise we’re leaving out swaths of students who don’t fit this template and we’re reproducing the inequalities that already exist.”

Rania Phillips, a recent graduate of the Rotman School of Management at the University of Toronto, feels that the student financial aid system places too much emphasis on income over wealth.

“Things like expenses are very much affected by wealth,” she said. “Families who make less money but don’t necessarily have to pay a mortgage have a very different financial situation than families who do have a mortgage, especially in the current housing market.”

A young woman stands in front of a series of lockers. — Rania Phillips, a recent graduate of the Rotman School of Management at the University of Toronto, says the student financial aid system focuses too much on income over wealth. (Aloysius Wong/CBC)

Phillips worked three jobs in her final year of undergraduate studies and took a year off to work before pursuing a masters degree this fall. She says the pressure to make ends meet led her to only consider academic programs that would allow her to immediately start repaying her student loans.

“There’s certainly … a different way you carry yourself when you don’t have the constant stress of how you’re going to make the very basics of your education,” she said.

Despite his difficulties, Black says he’s appreciative of how the student loan system allowed him to pursue an education, and he intends to pay back “every cent.”

“I don’t want to give anyone the impression that I think that I’m somehow a blameless victim in this scenario — I’m not,” said Black. “I’m an active participant in my situation.”

But unlike a lease on a car or a mortgage on a house, he says, he can’t return the education he received — nor would he want to.

“I was gambling that I would succeed,” he said. “So far, it’s helping me, but it’s not helping me enough to keep up with what they are asking for. And I can’t give it to them to make up for it.

“There’s nothing for me to pay them back with — so I’m trapped in the system.”

Adblock test (Why?)

Source link

Business

The #1 Skill I Look For When Hiring

Published

2 days ago

September 17, 2024

Nick Kossovan

File this column under “for what it’s worth.”

“Communication is one of the most important skills you require for a successful life.” — Catherine Pulsifer, author.

I’m one hundred percent in agreement with Pulsifer, which is why my evaluation of candidates begins with their writing skills. If a candidate’s writing skills and verbal communication skills, which I’ll assess when interviewing, aren’t well above average, I’ll pass on them regardless of their skills and experience.

Why?

Because business is fundamentally about getting other people to do things—getting employees to be productive, getting customers to buy your products or services, and getting vendors to agree to a counteroffer price. In business, as in life in general, you can’t make anything happen without effective communication; this is especially true when job searching when your writing is often an employer’s first impression of you.

Think of all the writing you engage in during a job search (resumes, cover letters, emails, texts) and all your other writing (LinkedIn profile, as well as posts and comments, blogs, articles, tweets, etc.) employers will read when they Google you to determine if you’re interview-worthy.

With so much of our communication today taking place via writing (email, text, collaboration platforms such as Microsoft Teams, Slack, ClickUp, WhatsApp and Rocket.Chat), the importance of proficient writing skills can’t be overstated.

When assessing a candidate’s writing skills, you probably think I’m looking for grammar and spelling errors. Although error-free writing is important—it shows professionalism and attention to detail—it’s not the primary reason I look at a candidate’s writing skills.

The way someone writes reveals how they think.

Clear writing = Clear thinking
Structured paragraphs = Structured mind
Impactful sentences = Impactful ideas

Effective writing isn’t about using sophisticated vocabulary. Hemingway demonstrated that deceptively simple, stripped-down prose can captivate readers. Effective writing takes intricate thoughts and presents them in a way that makes the reader think, “Damn! Why didn’t I see it that way?” A good writer is a dead giveaway for a good thinker. More than ever, the business world needs “good thinkers.”

Therefore, when I come across a candidate who’s a good writer, hence a good thinker, I know they’re likely to be able to write:

Emails that don’t get deleted immediately and are responded to
Simple, concise, and unambiguous instructions
Pitches that are likely to get read
Social media content that stops thumbs
Human-sounding website copy
Persuasively, while attuned to the reader’s possible sensitivities

Now, let’s talk about the elephant in the room: AI, which job seekers are using en masse. Earlier this year, I wrote that AI’s ability to hyper-increase an employee’s productivity—AI is still in its infancy; we’ve seen nothing yet—in certain professions, such as writing, sales and marketing, computer programming, office and admin, and customer service, makes it a “fewer employees needed” tool, which understandably greatly appeals to employers. In my opinion, the recent layoffs aren’t related to the economy; they’re due to employers adopting AI. Additionally, companies are trying to balance investing in AI with cost-cutting measures. CEOs who’ve previously said, “Our people are everything,” have arguably created today’s job market by obsessively focusing on AI to gain competitive advantages and reduce their largest expense, their payroll.

It wouldn’t be a stretch to assume that most AI usage involves generating written content, content that’s obvious to me, and likely to you as well, to have been written by AI. However, here’s the twist: I don’t particularly care.

Why?

Because the fundamental skill I’m looking for is the ability to organize thoughts and communicate effectively. What I care about is whether the candidate can take AI-generated content and transform it into something uniquely valuable. If they can, they’re demonstrating the skills of being a good thinker and communicator. It’s like being a great DJ; anyone can push play, but it takes skill to read a room and mix music that gets people pumped.

Using AI requires prompting effectively, which requires good writing skills to write clear and precise instructions that guide the AI to produce desired outcomes. Prompting AI effectively requires understanding structure, flow and impact. You need to know how to shape raw information, such as milestones throughout your career when you achieved quantitative results, into a compelling narrative.

So, what’s the best way to gain and enhance your writing skills? As with any skill, you’ve got to work at it.

Two rules guide my writing:

Use strong verbs and nouns instead of relying on adverbs, such as “She dashed to the store.” instead of “She ran quickly to the store.” or “He whispered to the child.” instead of “He spoke softly to the child.”
Avoid using long words when a shorter one will do, such as “use” instead of “utilize” or “ask” instead of “inquire.” As attention spans get shorter, I aim for clarity, simplicity and, most importantly, brevity in my writing.

Don’t just string words together; learn to organize your thoughts, think critically, and communicate clearly. Solid writing skills will significantly set you apart from your competition, giving you an advantage in your job search and career.

_____________________________________________________________________

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

Business

Politics likely pushed Air Canada toward deal with ‘unheard of’ gains for pilots

Published

2 days ago

September 16, 2024

Anne Joseph

MONTREAL – Politics, public opinion and salary hikes south of the border helped push Air Canada toward a deal that secures major pay gains for pilots, experts say.

Hammered out over the weekend, the would-be agreement includes a cumulative wage hike of nearly 42 per cent over four years — an enormous bump by historical standards — according to one source who was not authorized to speak publicly on the matter. The previous 10-year contract granted increases of just two per cent annually.

The federal government’s stated unwillingness to step in paved the way for a deal, noted John Gradek, after Prime Minister Justin Trudeau made it plain the two sides should hash one out themselves.

“Public opinion basically pressed the federal cabinet, including the prime minister, to keep their hands clear of negotiations and looking at imposing a settlement,” said Gradek, who teaches aviation management at McGill University.

After late-night talks at a hotel near Toronto’s Pearson airport, the country’s biggest airline and the union representing 5,200-plus aviators announced early Sunday morning they had reached a tentative agreement, averting a strike that would have grounded flights and affected some 110,000 passengers daily.

The relative precariousness of the Liberal minority government as well as a push to appear more pro-labour underlay the prime minister’s hands-off approach to the negotiations.

Trudeau said Friday the government would not step in to fix the impasse — unlike during a massive railway work stoppage last month and a strike by WestJet mechanics over the Canada Day long weekend that workers claimed road roughshod over their constitutional right to collective bargaining. Trudeau said the government respects the right to strike and would only intervene if it became apparent no negotiated deal was possible.

“They felt that they really didn’t want to try for a third attempt at intervention and basically said, ‘Let’s let the airline decide how they want to deal with this one,'” said Gradek.

“Air Canada ran out of support as the week wore on, and by the time they got to Friday night, Saturday morning, there was nothing left for them to do but to basically try to get a deal set up and accepted by ALPA (Air Line Pilots Association).”

Trudeau’s government was also unlikely to consider back-to-work legislation after the NDP tore up its agreement to support the Liberal minority in Parliament, Gradek said. Conservative Leader Pierre Poilievre, whose party has traditionally toed a more pro-business line, also said last week that Tories “stand with the pilots” and swore off “pre-empting” the negotiations.

Air Canada CEO Michael Rousseau had asked Ottawa on Thursday to impose binding arbitration pre-emptively — “before any travel disruption starts” — if talks failed. Backed by business leaders, he’d hoped for an effective repeat of the Conservatives’ move to head off a strike in 2012 by legislating Air Canada pilots and ground crew to stick to their posts before any work stoppage could start.

The request may have fallen flat, however. Gradek said he believes there was less anxiety over the fallout from an airline strike than from the countrywide railway shutdown.

He also speculated that public frustration over thousands of cancelled flights would have flowed toward Air Canada rather than Ottawa, prompting the carrier to concede to a deal yielding “unheard of” gains for employees.

“It really was a total collapse of the Air Canada bargaining position,” he said.

Pilots are slated to vote in the coming weeks on the four-year contract.

Last year, pilots at Delta Air Lines, United Airlines and American Airlines secured agreements that included four-year pay boosts ranging from 34 per cent to 40 per cent, ramping up pressure on other carriers to raise wages.

After more than a year of bargaining, Air Canada put forward an offer in August centred around a 30 per cent wage hike over four years.

But the final deal, should union members approve it, grants a 26 per cent increase in the first year alone, retroactive to September 2023, according to the source. Three wage bumps of four per cent would follow in 2024 through 2026.

Passengers may wind up shouldering some of that financial load, one expert noted.

“At the end of the day, it’s all us consumers who are paying,” said Barry Prentice, who heads the University of Manitoba’s transport institute.

Higher fares may be mitigated by the persistence of budget carrier Flair Airlines and the rapid expansion of Porter Airlines — a growing Air Canada rival — as well as waning demand for leisure trips. Corporate travel also remains below pre-COVID-19 levels.

Air Canada said Sunday the tentative contract “recognizes the contributions and professionalism of Air Canada’s pilot group, while providing a framework for the future growth of the airline.”

The union issued a statement saying that, if ratified, the agreement will generate about $1.9 billion of additional value for Air Canada pilots over the course of the deal.

Meanwhile, labour tension with cabin crew looms on the horizon. Air Canada is poised to kick off negotiations with the union representing more than 10,000 flight attendants this year before the contract expires on March 31.

This report by The Canadian Press was first published Sept. 16, 2024.

Companies in this story: (TSX:AC)

Source link

Business

Federal $500M bailout for Muskrat Falls power delays to keep N.S. rate hikes in check

Published

3 days ago

September 16, 2024

Anne Joseph

HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.

Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.

Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”

Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.

The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.

Those delays forced Nova Scotia Power to spend more on generating its own electricity.

This report by The Canadian Press was first published Sept. 16, 2024.

Source link