HUMA Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

EVIDENCE

CONTENTS

Tuesday, June 4, 2002

Á

1105

The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.))

Mr. David Cogliati (Director General, Canada Student Loans Program, Department of Human Resources Development)

Á

1110

The Chair

Mr. David Frankham (Vice-President, Business Development, BDP Business Data Service Ltd.)

Á

1115

The Chair

Mr. Liam Arbuckle (National Director, Canadian Alliance of Student Associations)

Á

1120

The Chair

Mr. Tony Norrad (President, Canadian Association of Student Financial Aid Administrators)

Á

1125

Á

1130

The Chair

Mr. Ian Boyko (Chair, Canadian Federation of Students)

The Chair

Mrs. Sandra Ferguson (Senior Vice-President, Sales and Services, EDULINX Canada Corporation)

Á

1135

The Chair

Mr. David Cogliati

Á

1140

Ms. Dale Barbour (Director, Program Management, Canada Student Loans Program, Department of Human Resources Development)

The Chair

Ms. Dale Barbour

Mr. Monte Solberg

Ms. Dale Barbour

The Chair

Mr. Alan Tonks (York South—Weston, Lib.)

Á

1145

Mr. David Cogliati

Ms. Dale Barbour

Mr. Alan Tonks

Mr. Tony Norrad

Ms. Dale Barbour

Á

1150

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

Mr. David Cogliati

Mr. Alan Tonks

Ms. Dale Barbour

The Chair

Ms. Diane Bourgeois (Terrebonne—Blainville, BQ)

Á

1155

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

Mr. David Cogliati

Ms. Diane Bourgeois

The Chair

Mr. Ian Boyko

The Chair

Â

1200

Ms. Sandra Ferguson

The Chair

Ms. Diane Bourgeois

The Chair

Mr. Joe McGuire (Egmont, Lib.)

Mr. David Cogliati

Mr. Joe McGuire

The Chair

Mr. David Cogliati

The Chair

Mr. David Cogliati

The Chair

Mr. Joe McGuire

Ms. Dale Barbour

Mr. David Cogliati

Mr. Joe McGuire

Mr. David Cogliati

Mr. Joe McGuire

Â

1205

Ms. Dale Barbour

Mr. Joe McGuire

The Chair

Mr. Monte Solberg

Mr. David Cogliati

Mr. Monte Solberg

Mr. David Cogliati

Mr. Monte Solberg

Mr. David Cogliati

Mr. Monte Solberg

Â

1210

Mr. David Cogliati

Mr. Monte Solberg

Mr. David Cogliati

Mr. Monte Solberg

Mr. David Cogliati

Mr. Monte Solberg

The Chair

Ms. Diane Bourgeois

Mr. David Cogliati

Â

1215

Ms. Diane Bourgeois

The Chair

Mr. Joe McGuire

Mr. David Cogliati

Mr. Joe McGuire

Mr. Liam Arbuckle

Â

1220

Mr. Joe McGuire

The Chair

Mr. Ian Boyko

The Chair

Mr. David Cogliati

The Chair

Mr. David Cogliati

The Chair

Mr. David Cogliati

The Chair

Ms. Dale Barbour

The Chair

Mr. Alan Tonks

Â

1225

Mr. Ian Boyko

Mr. Alan Tonks

The Chair

Ms. Sandra Ferguson

The Chair

Mr. Ian Boyko

The Chair

Mr. Tony Norrad

Â

1230

The Chair

Mr. David Frankham

The Chair

Mr. Liam Arbuckle

The Chair

Mr. David Cogliati

The Chair

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CANADA

Standing Committee on Human Resources Development and the Status of Persons with Disabilities

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NUMBER 067

l

1st SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, June 4, 2002

[Recorded by Electronic Apparatus]

Á  (1105)  

[English]

    The Chair (Mrs. Judi Longfield (Whitby—Ajax, Lib.)): Good morning, ladies and gentleman. I call the meeting to order.

    This morning we are looking at an administrative update on student loan administration, and we have a number of excellent witnesses with us. We're going to start this morning by hearing from the Department of Human Resources Development, and we have with us Dale Barbour and Dave Cogliati. Welcome. It's good to see you again. You know the drill, and we look forward to your presentation.

    Mr. David Cogliati (Director General, Canada Student Loans Program, Department of Human Resources Development): Thank you.

[Translation]

    I would like to thank the chair and the members of the Standing Committee for this opportunity to provide you with an update on the Canada Student Loans Program, including how the direct financing of loans is progressing, as well as other current initiatives.

[English]

    I'd like to begin this morning with a brief overview of what I think will become the most important driver of the department in regard to skills and learning, and then come back to the experiences we've had with the first year of direct loans.

[Translation]

    The government has long voiced its support in promoting access to post-secondary education for all. It has advocated for and been active in supporting lifelong learning.

    The government has recognized that Canadians increasingly need to upgrade their skills in the knowledge-based global economy, and that they often have limited access to adequate resources when the need or opportunity for skills upgrading occurs.

[English]

    The innovation strategy, with the skills and learning agenda, in major part builds on the priorities identified by the government in the latest Speech from the Throne. At the standing committee on May 9 Minister Stewart appeared and addressed some of the major initiatives within the skills and learning agenda. These include initiatives to help adults who want to improve their skills, but may face difficulty finding the resources to do this. The discussion paper building on the innovation agenda, “Knowledge Matters: Skills and Learning for Canadians”, released in February 2002, sets out a number of very challenging goals, one of which is that all qualified Canadians have access to post-secondary education. It identifies the need to explore how to provide low-income and moderate-income adults with the means to advance their skills and knowledge while continuing to earn a living.

    I'd like to give a very brief overview of the Canada student loans program and where we are right now. We're fortunate from the perspective that Canada currently enjoys the highest proportion of its working age population in the OECD with post-secondary education.

[Translation]

    In terms of student financial assistance in Canada, over half of all students pursuing post-secondary education complete their studies debt-free and in the case of students who do obtain loans through the Canada Student Loans Program, 85% repay them without major difficulties.

    For those who are experiencing financial challenges repaying their loans, there are a number of features available to them such as interest relief, for up to 54 months.

[English]

    However, while we've achieved a lot of success with respect to access to post-secondary education, there are a number of developments that are obviously cause for considerable concern. I'm referring here to developments like rising tuition rates, overall student debt levels, and access to post-secondary education among some under-represented groups, such as aboriginal students and students from low-income families.

    Under the rubric of the skills and learning agenda we are currently looking at improving student financial assistance, perhaps in the short-term to part-time learners, as part of an overall effort to promote life-long learning, and increasing access to post-secondary education for adults.

    There's an extensive consultation process under way right now. In fact, there's a meeting tomorrow in Halifax on post-secondary education, a round table, that will be looking at best practices.

[Translation]

    The issue of access to part-time education will continue to be discussed over the coming months, along with a number of other important issues with stakeholders and other interested parties.

[English]

    We'll also be talking quite extensively with our provincial colleagues and partners to flesh out proposals for improvements, and as always, we'd be very interested in any opinions, suggestions, or recommendations from the standing committee.

    In April 2002 federal, provincial, and territorial deputy ministers responsible for education and training met in Toronto, and they received a report and recommendations for creating a renewed framework for student financial assistance. The deputy ministers collectively directed that a committee be constituted at the assistant deputy minister level, federal, provincial, and territorial, to look at opportunities for short-term and long-term actions to improve student financial assistance, including what could be undertaken jointly, as well as complementary actions by individual federal, provincial, and territorial governments.

    I'd like to also very briefly talk about an announcement made in the December budget with respect to Canada study grants for the disabled. We're committing ourselves to increasing the maximum grant to cover exceptional education-related costs associated with persons with permanent disabilities from the current $5,000 up to a maximum of $8,000. In addition, a new Canada study grant for high-needs students with permanent disabilities is being made available, up to $2,000, to offset such direct costs as tuition, books, and transportation. The grant will be made available to students with permanent disabilities who, after having received the maximum amount in loans, still have unmet needs, and this will become operational in August of this year.

    In the 2000-2001 loan year approximately 56,000 Canada study grants were awarded, totalling $81 million, and of those approximately 4,600 were awarded to students with permanent disabilities, at a value of $11.2 million.

    Now I'll very briefly give you an update on direct financing. Since August of last year over 400,000 disbursements have been made, with a total value of approximately $1.5 billion. One of the most important issues we continue to address is the length of time it takes for students to receive their Canada student loan funds. It's our service commitment that Canada student loan funds be disbursed within one week of the “do not disburse before” date indicated on the student loan document. On November 30, 2001, we implemented a number of system changes that allow our service provider colleagues to send the student's file to the Canada student loan program three business days prior to the “do not disburse before” date. This starts the whole disbursement process in a much more timely fashion and, in our opinion, will result in many more automatic deposits lining up closer to the “do not disburse before” date. At our January peak we had, I think, a very good experience with getting the student loans out in a timely fashion, and we disbursed something over 120,000 with relatively little interruption.

    We have signed two integration agreements, one with Ontario and one with Saskatchewan. We're coming up to our first anniversary under those agreements. The feedback we've received from student groups is that those integration agreements are a positive development, and we're discussing other possible integration agreements with other provincial partners.

Á  (1110)  

[Translation]

    In closing, may I once again thank the members of the Standing Committee for the opportunity to provide an update on the Canada Student Loans Program.

    We would be pleased to answer any questions that may have arisen over the course of this presentation. Thank you.

[English]

    The Chair: Thank you.

    We will hear from our next presenter, not a stranger to this committee, and welcome back David Frankham from BDP Business Data Service Ltd.

    Mr. David Frankham (Vice-President, Business Development, BDP Business Data Service Ltd.): Thank you very much. Good morning.

    I would like to thank the chair and the members of the standing committee for this opportunity once more to provide you with an update on how the directly financed Canada student loans program is performing from a private educational institutions perspective

    As an opening comment, I would like to state that we continue to have a very constructive and cohesive working relationship with the Canada student loans program staff at HRDC, the schools, the students, and the private educational institutions, which continues to contribute to a high level of service and student satisfaction. The private educational institutions student loan portfolio represents over 4,000 schools and 40,000 students worldwide.

    I'd like to provide you with a few key statistics relating to customer service with private educational institutions. Over 89,000 loans have been processed, representing in excess of $302 million of new funding for students. Over 90% of these loans are processed on the same day we receive correct documentation. Eighty per cent of all customer service inquiries have been answered within 35 seconds of wait time, with the longest single wait time being two minutes and 10 seconds.

    We are working closely with the Canada student loans programs staff and their provincial counterparts in Ontario and Saskatchewan in the next phase of the federal-provincial integration program, specifically to integrate the interest relief process, so that students need only apply once. This is very much in keeping with the overall integration objective of one student, one loan.

    Our accuracy standards are very high. For example, first year independent audit results confirm an error rate of only 1% of all fund disbursements processed, and none of these represented financial loss to the federal government. Overall, the auditor rated these results highly satisfactory.

    In conjunction with the Canada student loan program, we are constantly looking for ways to improve service to the students. In this regard, a number of technology enhancements are planned for implementation over the next 6 months, including, as Dave has just stated, reducing the time within which funds are disbursed to students.

    In conclusion, I would like to thank the members of the standing committee for the opportunity to provide a further update on the service results relating to the private educational institutions portfolio being administered by BDP. I'd be pleased to answer any questions at this time.

Á  (1115)  

    The Chair: I'm sure there will be questions as we proceed.

    The next presenter is from the Canadian Alliance of Student Associations, and I'd like to welcome Liam Arbuckle.

    Mr. Liam Arbuckle (National Director, Canadian Alliance of Student Associations): Good morning, Madam Chair, members of the committee. On behalf of CASA and the over 310,000 college and university students we represent, I would like to thank you for the opportunity to present here today.

    The Canada student loan program continues to play a vital role in helping many students secure a post-secondary education. To be effective, CSLP must have policies that accurately assess students' needs and provide the necessary loans in a timely and user-friendly manner. The purpose of today's hearings on the administrative arrangements of the Canadian student loan program is to ensure that the provision of loans is being held to a high standard. In the fall CASA testified before this committee on the same subject. At that time we said that with the major structural changes the program had just undergone, loans were dispersed to a relatively high standard. We also made mention of a few specific service problems, and I am pleased to say that the Canada student loan program showed a real commitment to addressing them.

    Right now it is very difficult for CASA to provide useful insights on how the changes to the process have improved the quality of service borrowers have received, as the vast majority of students we represent have not received a new disbursement of Canada student loans since September. I would like to comment today on some future improvements the Canada student loan program can make to improve service both during the application process and during loan repayment.

    First and foremost, the program must remain aware of how confusing the repayment process will be for many borrowers who have graduated. Switching from loans provided by banks to direct finance loans will mean some students will have to make payments to multiple sources, mainly both the Government of Canada and banks that once participated in the loan program. As well as an advertising campaign to communicate these changes, CASA recommends that the government look for financial arrangements that would allow students to repay their loans in a single monthly payment. The government could then disaggregate what amount of money should go to the lending bank and what amount it should be keeping for the directly financed portion of the loan. Students like simplicity.

    Another major step towards improving service would be the provision of services on-line. Overall, students are very Internet-savvy, and it is often their preferred medium for doing business. Both the Canada student loan program and EDULINX have previously stated to us a shared desire to offer on-line services, including on-line application, loan status updates, and repayment. To CASA's understanding, once Human Resources and Development Canada introduces a working security and privacy policy for such an on-line service, these types of services can be implemented. Obviously, students want to see these services soon.

    Those are all the comments CASA currently wishes to make on the Canada student loan service, Madam Chair, but I would encourage this committee to hold hearings in the fall to look at some of the policy issues surrounding the needs assessment process for student loans. In the recent skills and learning paper from HRDC some very important goals were set with respect to accessibility. I believe this committee should investigate whether the current needs assessment process of the Canada student loan program will allow these goals to be met.

    Thank you again for your time.

Á  (1120)  

    The Chair: Thank you, Liam.

    The next group we'll hear from is the Canadian Association of Student Financial Aid Administrators, and I welcome the president, Tony Norrad.

    Mr. Tony Norrad (President, Canadian Association of Student Financial Aid Administrators): Thank you, Madam Chair, and good morning, members of the committee. I would like to thank you for the opportunity to appear this morning.

    For information purposes, CASFAA's membership is made up of professional and administrative personnel from universities, colleges, and technical institutions who have direct involvement in student financial aid or student award programs at those institutions.

    From the outset, CASFAA would like to acknowledge the efforts of the Canada student loans program in developing a consultative process that has included members of the national advisory group on student financial aid, the service providers, and other stakeholders, including our association. Although the transition has not been without its challenges, we have appreciated the continued commitment of CSLP to address the concerns brought forward by our association on behalf of our members and the thousands of students we serve each day.

    We continue to be concerned about those challenges that are still affecting students and post-secondary institutions. We believe, if CSLP is to be successful, these challenges must be resolved. We are also concerned about the growing number of students who are finding themselves lost in the web of a very complex student loan program. This is especially true for those student borrowers who hold multiple loan products, including direct loans, risk-shared loans, and guaranteed loans. We understand that one of the primary objectives of the new direct loan program is to improve the overall service delivery for student borrowers, and we support that. CASFAA's committed to working with CSLP and its service providers to ensure that this objective is achieved.

    I'm just going to focus on the recommendation points raised in the brief that was presented to the committee earlier today.

    The first one concerns the disbursement process. The disbursement of funds continues to be problematic for some students, and the current standard for processing federal student loans, as has been mentioned by Mr. Cogliati, is one week. In the fall of 2000 students were experiencing processing times of around 10 to 14 days. Although some improvements in the processing times were noted during the winter disbursement period, primarily due to changes made in the processes, as already highlighted, students are still waiting longer to receive their funds than they would have under the previous risk-shared loan program, which was three business days. This delay has resulted in increased workloads for many educational institutions, which find themselves having to provide interim funding through their emergency loan programs.

    It is our position that we need to develop a process in which the service providers become directly responsible for the disbursement of funds to student borrowers. This would significantly reduce the processing time and ensure that students receive their funds in a more timely manner. It is understood that such a change would require regulatory and legislative changes to the current Financial Administration Act at sections 33 and 34. One possible option would be a zero-based accounting process, which I believe is currently being explored by CSLP. I would like to point out that a similar process is currently being used by the Province of Alberta in their direct loan program, and it has met with tremendous success.

    The other issue concerns training with regard to the kiosks that are being set up by the service providers during high-peak periods. It is our position that a more comprehensive training program needs to be developed for the temporary personnel hired by service providers to staff the on-campus kiosks during peak periods. This is really a result of some of our experiences. These kiosks are to facilitate the large volume of loan documents the service providers are handling in September and January of each year. This has certainly been viewed by our association and others as a value-added service for students. However, a number of issues were raised regarding the training of these kiosk personnel, which in some cases was inadequate. Certainly, there was a variance in level of knowledge at the various campuses across Canada. For the most part, as I mentioned, these personnel are hired by the service provider to staff these kiosks during peak periods and in many cases are not regular staff in their organization. As a result, the educational institutions were required to closely monitor the kiosk staff.

Á  (1125)  

    As a follow-up to that particular point, there is a recommendation from CASFAA to permit the educational institutions to be contracted by the service providers to collect and forward loan documents to the service providers, the national student loan service centre. There are many reasons for this, we believe. One point is that it reduces the number of contacts student borrowers need to make in trying to process their student loans, almost moving to the one-stop shopping concept. I bring my loan document into the educational institution, they confirm and sign off my enrolment status, and then they forward the documents directly to the national student loans service centre, as opposed to having the student then take the document out to an designated postal outlet to start that process.

    The other area with regard to training that we want to highlight concerns the postal outlets. Although we believe, as an association, the level of service at the postal outlets has been improving over the past few months—in fact, there's been some significant improvement in a number of areas—there is still a need to be diligent and ensure that all Canada Post personnel are appropriately trained. Typical errors include accepting stale-dated documents, not ensuring that loan documents are properly completed, and not ensuring that the student has signed in the required places, which all result in a delay in the processing of the student loans. Many designated postal outlets have experienced inadequate supply of materials, Canada student loan agreements, envelopes for forwarding confirmation of enrolment forms, and the like. In some cases postal personnel have even suggested to students that it may take up to three weeks to get new supplies of these materials, turning the students away without their being serviced.

    It is certainly our position that we need to review the Canada Post training program and ensure that it's adequate and that there are quality control measures in place—it is our understanding that they currently do exist.

    The next issue is about maintaining an effective communications strategy to inform student borrowers of their responsibility, not only with their new direct loans, but also with their previous non-direct loans. It is important that CSLP and the service providers maintain a communications strategy that effectively informs these student borrowers of their responsibility. With the recent changes to both the federal and provincial student financial assistance programs, it will not be uncommon to find a student with six separate loans and dealing with four different contacts, whether they be financial institutions or service providers. It has become quite evident that the students are struggling with the new realities of the CSLP. They find themselves not knowing what to do with all their documents. As an example, in our institution I am finding that my staff are spending four to five times longer with each student just explaining the process to them in greater detail, so they understand what they need to be doing and what documents they need to be taking where.

    Also, it is our position that CSLP needs to continue to work very closely with the financial institutions to ensure that their staff at all levels, including the local branches, are properly informed about the Canada student loan program and that the students will continue to receive an appropriate level of service. We remain concerned about the service levels students have been receiving from the financial institutions that previously managed the risk-shared loans, as well as the guaranteed loans. Although we are not able to offer any solutions in this regard, we strongly believe CSLP must continue to work closely with the financial institutions to really ensure that they are well informed, so that the level of service to students is not decreasing.

    The next comment is a general follow-up in regard to the complexity of the multiple loan programs. We suggest that the Canada student loans program, in cooperation with the provincial governments, consider the creation of a national clearing house or data warehouse to help reduce the complexity of the student loan programs for students. As I mentioned, given the complexity of the multiple loan products, CASFAA continues to encourage CSLP to work in creating this data warehouse. This clearing house would maintain a comprehensive database containing information on student borrowers, including all data relating to the federal and provincial loan products, both full- and part-time. For example, one function would be to receive confirmation of enrolments from the post-secondary institutions, and in turn, be responsible for disseminating that information to the appropriate service provider and financial institutions on behalf of the student borrower.

    This is really focusing on a one-stop process for students, which would simplify the overall maintenance required for their student loans. CSLP this past fall established a one-application process for those students applying for interest relief who have multiple loan products, including a direct loan. We would recommend that CSLP create similar processes for the reinstatement of the interest-free status. These one-application processes could be coordinated through the data warehouse, national clearing house, or perhaps the service providers, and they would then be responsible for disseminating the information to the financial institutions and other appropriate stakeholders.

    The next two items concern the contacts we have with the service providers, CSLP, and the financial institutions. We need to find a system that allows us to have a more effective and confidential exchange of information between us, the educational institutions, CSLP, the service providers, and the financial institutions dealing with the direct loans. There have been a number of challenges our members have been facing across the country in trying to get information. Although we certainly have seen a significant improvement in dealing with the Canada students loans folks, as well as the service providers, we are still challenged in the area of trying to work with the financial institutions in resolving student concerns.

Á  (1130)  

    The last comment I would just make in relation to this is that we are requesting that there be a comprehensive listing of key problem solver contacts within CSLP, service providers, and the financial institutions for use by the educational institutions. This would simply allow us to have direct contact, to be able to resolve issues and concerns being raised by our students in a very timely and effective manner.

    Those are my comments. Thank you.

    The Chair: Thank you. As usual, you have presented a very thorough and worthwhile document, and I know there'll be lots of questions.

    The next presentation is from Ian Boyko, who is the chairperson of the Canadian Federation of Students. Welcome, Ian.

    Mr. Ian Boyko (Chair, Canadian Federation of Students): Hello.

    I would like to begin by thanking the committee for the invitation to appear today. The Canadian Federation of Students welcomes the opportunity to discuss the successes and failures in the administration of the directly financed Canada student loans program. Before I begin, I'll just stray from my notes for a second. I just wanted to make reference to John Herron's motion regarding tax credits and Canada student loan repayments. The federation is pretty disappointed that this motion didn't pass, but we would like to thank members of this committee who did vote in favour of it when it came to the floor.

    My remarks today will be guided by the idea that there remains much room for improvement in both the administration and the policy with regard to accountability. The Canadian Federation of Students maintains that the direct lending model for the Canada student loans program is the most publicly accountable model to date. The departure of the banks gave students an increased level of trust in the mechanism that lends hundreds of thousands of students millions of dollars, but the way that has translated into service provision through the partnership with the private service providers has been a little underwhelming.

    The most common complaint we receive from students, though it's difficult to generalize, because there are a myriad of complaints and they're very individualized is that there is no one staff person at the national student loan centre who is directly accountable for their loan. The service providers are, of course, proud of their call centre's ability to answer calls quickly, but with no single representative who is accountable to students each time they call, the time saved by getting a call answered in less than 27 seconds is more than surpassed by being bounced around 27 times to different representatives, to receive interest relief, for example.

    Of course, drawing policy conclusions in order to improve the administration of the Canada student loans program is somewhat difficult these days if stakeholders do not know, in very specific terms, what is expected of the service provider. We know, for example, there are certain performance incentives built into the agreement. It is for this reason that it would be beneficial to our 400,000 members if stakeholders could receive copies of this agreement signed between the federal government and EDULINX and the federal government and BDP. Public social programs should be publicly accountable. One of the federation's foremost complaints about the partnership with the banks was the secrecy under which the banks insisted on operating. Students expect more scrutiny for a direct lending model.

    I've kept my remarks relatively brief today in order to allow more time for answering questions. Again, I want to thank the committee for the invitation to appear today, and I look forward to your questions.

    The Chair: Thank you.

    We will wrap up the presentations with EDULINX Canada. We have with us Sandra Ferguson, who's the senior vice-president, sales and service, and Douglas Gilhooly, who is the assistant vice-president, sales and service. I understand, Sandra, you're making the presentation today.

    Mrs. Sandra Ferguson (Senior Vice-President, Sales and Services, EDULINX Canada Corporation): Thank you, Madam Chair.

    As many of you already know, EDULINX Canada Corporation is the leading student loan service provider in Canada. Based in Mississauga, with regional representatives across the country, we employ more than 600 student loan specialists and currently administer over one million loans for post-secondary students in Canada. On behalf of the Government of Canada, we operate the national student loans service centre, public institutions division, providing end-to-end services in support of the directly financed Canada student loans programs and the integrated programs of Ontario and Saskatchewan. Currently, those programs represent over 500,000 loans under administration, with a value of $2.8 billion.

    Madam Chair, in the year since the launch of the new program EDULINX has dedicated a tremendous amount of energy, enthusiasm, and hard work to the delivery of the Canada and integrated student loan programs. Some of the highlights are: over 300,000 loans converted to our servicing system; design and implementation of the integrated programs for Saskatchewan and Ontario; over 500,000 loans authorized for disbursement, including 123,000 disbursements in this most recent January peak; over 760,000 telephone calls received from student borrowers and educational institutions.

    Our commitment to the government and to the students is to consistently meet all established service levels and to improve service wherever feasible. We are always striving to deliver on that promise. Together with the HRDC officials, we've streamlined the delivery of services to student borrowers with multiple loans, including the administration of interest relief and continuations of enrolment, which, you may recall, was a problem for some students last fall.

    In another new initiative, we held our inaugural meeting of the EDULINX service advisory council this past February. Established to provide us with valuable stakeholder feedback on service delivery, the council is comprised of representatives from student groups, educational institutions, and governments. It will be an important contributor to our continuing improvement efforts, and we look forward to the output of future meetings.

    With regard to our aboriginal partnership, EDULINX and Tribal Wi-Chi-Way-Win Capital Corporation have reached agreement on the next stage of our service partnership and will be announcing these details later this month.

    As an aside, this year, as part of our corporate commitment to youth and education, we are again sponsoring the EDULINX mentoring awareness tour. The tour, featuring mentoring expert Dr. Susan Weinberger, will visit eight Canadian cities over the next two weeks to promote the benefits of company sponsored in-school mentoring programs.

    Madam Chair, while there is a lot more work to do, we are proud of our accomplishments to date and the positive working relationships established with program officials, stakeholders, including members' offices, and students. I believe we share a common goal to improve and simplify the delivery of student loan programs for student borrowers in Canada.

    In closing, I again express our enthusiasm and commitment in supporting one of Canada's key education initiatives. Thank you, Madam Chair, members of the committee, and the round table, for the opportunity to join with you today.

Á  (1135)  

    The Chair: Thank you.

    We'll now move into our question period, and we'll lead off with Mr. Solberg, a six-minute round.

    Mr. Monte Solberg (Medicine Hat, Canadian Alliance): Thank you very much, Madam Chair, and thank you to all our witnesses for coming before the committee today.

    The first question I have is for Mr.Cogliati, and it has to do with some of the issues that have been received. I'm interested to know if you are aware of some of the concerns people have expressed today, and I'd like to offer you the chance to respond to some of those concerns. I should back up and say it sounds as though much of what you're doing is going well and there have been a lot of improvements—and I'm new to the committee, so I'm not fully up to speed, I guess, on how things were in the past. I wonder if you want to address some of the concerns that have been raised, and maybe also tell us which issues you can't do much about right now or if there are things being asked for that are simply beyond your ability to grant.

    Mr. David Cogliati: Fortunately, we have a very good working relationship with the people here. They sit on a number of advisory groups, and I've personally met with several of them individually. The fact that we're soliciting this kind of input is, I think, a sign that we're interested in addressing these matters whenever we have the opportunity to do so. When we were here last October, Tony's colleague from CASFAA presented a list. We've gone through that quite closely and tried to address a lot of those issues. We've taken some of those issues back to our service provider colleagues. A lot of them dealt with training and distribution. We've desperately tried to improve there, but there's always room for improvement, so we're always interested to hear what they have to say.

    The one area we probably have a problem meeting is having the financial officers at the universities be the authority for a lot of the documents and certify the documents. In our discussions with our provinces, which, of course, are equally involved in the disbursement process, they've expressed a little reservation about having the financial officers handle that particular function.

    We obviously need to do a lot of work with our Canada Post colleagues to improve their service, but we're hoping to alleviate some of the need for fixing that particular problem.

    I'd ask my colleague Dale Barbour, who looks after our operations specifically, if there are any others we can or cannot move on.

Á  (1140)  

    Ms. Dale Barbour (Director, Program Management, Canada Student Loans Program, Department of Human Resources Development): Thanks, Dave.

    To give a little more information on the disbursement process, first, we are investigating the possibility of zero-based accounting to see what benefits that would actually give us and, consequently, the borrowers. The other thing I can pass on is that right now the actual deposit of funds is handled by Public Works and Government Services. They actually have an electronic exchange of information with CIBC, and come the fall, they hope to have this same exchange with all the major banks, and this is going to speed up the process too, because up to now the tapes have actually been couriered to the other major banks to have those funds deposited in the borrower's account.

    The Chair: Before you go any further, as you're speaking, I'm looking at my colleagues. Zero-based accounting is something you might want to elaborate on a little.

    Ms. Dale Barbour: Zero-based accounting actually means we would have an accounting system set up with the service providers so they would actually be able to direct the funds directly to the borrower. A file would still have to come to HRDC to have the actual funds approved, and then the service provider would be able to disburse the dollars directly into the borrower's account or issue the cheque, if that were the process the individual wanted. Our research has indicated that we might actually save a day by doing this.

    Mr. Monte Solberg: I wonder if you could address a point Mr. Boyko made about having one person address an account. I run into this all the time in dealing with the public service. It's a common complaint in different departments. I wonder if that's possible.

    Ms. Dale Barbour: We have looked at this, and the service providers have looked at this too. The strategy we are pursuing is that all the individuals working in the call centres have the same level of expertise and information, and when an individual does call in and raise a concern, that concern is actually documented on the individual's file, so that any other operator taking a subsequent call from that borrower can see exactly what has happened. With the number of individuals we're dealing with, we don't know if it would actually end up providing a better level of service to actually have one contact. That's the system we're trying to continue to improve, to make sure the level of training for all the operators and both the service providers is at a level where they're able to provide the expert service, actually taking note of what the individual is complaining about when they do call in, so it's not like you're going back to square one every time you call in.

    The Chair: Mr. Tonks.

    Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Madam Chairman.

    A question was raised with respect to some students struggling with CSLP and some having still six or seven loans. David, you talked about the notion of one student, one loan. How are we bringing that together?

Á  (1145)  

    Mr. David Cogliati: The one student, one loan model works well from direct loans onwards, in the sense that a lot of the old loans that were issued under either the guaranteed loan portfolio or the direct loan portfolio were, in fact, the banks loaning out money. We're going through a transition phase, and my colleagues representing student groups are entirely accurate in saying there is a lot of confusion right now for those with prior loans with multiple financial institutions. With the ones that are lent out directly by governments, it's almost like a threshold from that point forward. We're starting to get our house in order, and once those other groups who have taken loans as perhaps guaranteed, risk-shared direct loans actually consolidate their loans--and that's a one-time event--it becomes a bit simpler, but the process of consolidation is a challenge.

    We have had discussions with the banks and the financial institutions to see if there's something we can do at the federal level to try to facilitate that process, and I'd ask Dale to update you on those discussions.

    Ms. Dale Barbour: With an individual who does have a guaranteed loan that was issued from a bank or a risk-shared loan, you can't actually consolidate those loans along with a direct loan. That's why the students end up having to make a payment for their direct loan, which is handled by the service providers, and payments on any of their previous loans with the banks. To try to reduce the complexity of this program, once an individual has consolidated, if they need interest relief to help them with their payments, we have set up a process whereby it's the service provider that's actually doing that application for interest relief, obtaining the information from the financial institutions for the previous loans. The borrower then only has to complete one interest relief application. So we are starting to make some headway in trying to reduce the complexity.

    Mr. Alan Tonks: Okay. Perhaps Tony would like to respond to that. From the students' perspective, rationalizing those and getting into a one or two payment situation would be a huge achievement, but I can see the inherent problems with that.

    Mr. Tony Norrad: The only comment I would make is that even when I enter into consolidation, I will have both federal and provincial loans. If I started in school between 1995 and 2000, I will have a risk-shared loan, which means I'll end up with four separate loan payments if I've received funding under both federal and provincial programs. For example, a student graduating from the province of Alberta with x dollars of debt and both a provincial and federal loan, will have one loan with the financial institutions, and they may very well be the same people who hold the federal one under the risk-shared program, one payment for a direct loan under the Canada loan program, and one payment for a direct loan under the Alberta loan program. So I end up after graduation having three separate loan payments and being responsible for consolidating all of those documents separately with those organizations and those providers.

    There certainly are issues, and I seriously compliment the efforts of CSLP in looking at one-application processes to deal with things like interest relief. We assume that will be extended to things like DRR and so on, so that students aren't needing to apply to each of these separate financial institutions. But it is certainly a very complex web for students, there's no question. And as we move through this transition, where we get out at those students who are currently enrolled with multiple loan products, this is going to be a challenge for us.

    Ms. Dale Barbour: I just wanted to make a comment. People who actually have an integrated loan in both Saskatchewan and Ontario right now are actually making one payment, and that's it. That payment goes into the service provider, and it's split out at the back end. We're going to have a number of years where people do have these multiple portfolios for the loans, but the future is much more positive. The more provinces we're able to convince to sign an integrated agreement with the federal government, the more positive it will be for the borrower.

Á  (1150)  

    Mr. Alan Tonks: That was my next question, Madam Chair.

    The Chair: I see Tony nodding his head, so I think he's pleased as well.

    Mr. Alan Tonks: Then I just have one other question, on the mechanics of it. With respect to EDULINX and the on-line service, what is the status with respect to that program?

    Mr. David Cogliati: We're getting our ducks in order, for want of a better phrase. The service providers' infrastructure is ready to put information on-line for students. From the program's perspective, we've built an infrastructure where we can exchange information back and forth. The holdup at this point is the protocol by which we would identify the student at the other end in a secure fashion. So it's a program integrity issue. We've tried to use the student loan program as a pilot, as we think the banks have got this kind of interchange going on quite regularly, but the government--it's odd speaking on behalf of the whole government--is trying to put in place a standardized secure channel that will apply to all applications, and not one-offs. So there's still quite a bit of work through our Treasury Board colleagues, the chief informatics officer, and the private sector in developing the public key infrastructure and the secure channel that will make it absolutely certain that when we exchange information across the Internet, we know who's at the other end through some kind of authentication process. So the service providers are ready, the program, generally speaking, is ready, it's that link in-between with the students that still needs to get sorted out.

    Mr. Alan Tonks: I don't understand, then, the tie-in with the kiosks in respect of what EDULINX would offer in an on-line service. How does the kiosk issue differ from that? How do they operate?

    Ms. Dale Barbour: I think maybe the term kiosk is a bit of a misnomer, because the kiosk really is just the facility at an educational institution during the peak period to accept documents from the student. Eventually, when we have everything on-line, there won't be a need to have people there to accept documents, because everything will be sent electronically.

    The Chair: Thank you.

    Our next questioner is Madame Bourgeois. Welcome.

[Translation]

    Ms. Diane Bourgeois (Terrebonne—Blainville, BQ): Thank you, Madam Chair. Good morning, ladies and gentlemen.

    I have two questions. I would like first of all for Mr. Cogliati or Ms. Barbour to explain the following from the fourth paragraph of the second page of your presentation. It reads:

In terms of student financial assistance in Canada, over half of all students pursuing post-secondary education complete their studies debt-free.

    Could you explain that, please?

    Secondly, Madam  Chair, since the Human Resources Development Department has brought forward a program to help those who wish to pursue post-secondary education... Status of Women Canada is undertaking a comparative gender analysis and is seeking to determine whether or not the programs that are made available are advantageous to women.

    I would like to know whether or not you have taken into account the women who would like to pursue post-secondary studies but who may have young children, who may be single parents, and who may not have the means to do so.

    My question is also for BDP Business Data Service Ltd. and for EDULINX.

    Those are my questions, Madam  Chair.

Á  (1155)  

    Mr. David Cogliati: Thank you, Ms. Bourgeois.

    In answer to the first question, according to our figures, we grant about 400,000 loans per year. There are more than one million post-secondary students. Therefore, less than half of them receive loans. When I say that less than half are given loans, and have no debt, there are no doubt some of them who do owe money, but when I said one half, I was referring to those who had been given a loan.

    Ms. Diane Bourgeois: Would Ms...

    Mr. David Cogliati: Did I understand the question correctly?

    Ms. Diane Bourgeois: I do not think so.

    May I repeat my question, Madam  Chair? It is because the following sentence is in your paper:

In terms of student financial assistance, over half of all students pursuing post-secondary education complete their studies debt-free.

    Unless I am mistaken or have misunderstood, that does not seem to be the case, according to the students who are here or the student association representatives.

    Mr. David Cogliati: No, that is fine. When I say “debt-free”, what I meant was the students who had received a Canada student loan.

    Ms. Diane Bourgeois: But is a loan not a debt?

    Mr. David Cogliati: Yes, absolutely, but half of them receive a loan, so half of them do have a debt, whereas the other half would be debt-free.

    Ms. Diane Bourgeois: Because of the wording, we thought that maybe... Unless I am missing something here, I do not understand how a post-secondary student could be debt-free. If you say that they are—

    Mr. David Cogliati: It is a public debt. Maybe that is the difference.

    Ms. Diane Bourgeois: But if you are saying that they have a public debt, it is nevertheless still a debt.

    Mr. David Cogliati: Absolutely.

    Ms. Diane Bourgeois: You are not giving them money, you are lending it to them. The student must pay it back.

    Mr. David Cogliati: Yes, that is true.

    Ms. Diane Bourgeois: Therefore, it is a debt. That is fine. Thank you very much.

    Perhaps one of you could answer the second part of my question.

[English]

    Mr. David Cogliati: Your question was about the gender basis and whether or not we're taking into account students who have dependents. There's a program designed specifically for that, the Canada study grant program, and the largest category of disbursement under that program is for students with dependents. In the last loan year we had close to 46,000 grants issued to students with dependents, to a value of close to $65 million. So there is a program in place to try to help those students with dependents, and if memory serves--and it's always dangerous to go on memory--slightly more than half of the students who receive loans are female.

[Translation]

    Ms. Diane Bourgeois: Some people have not answered my question.

[English]

    The Chair: Mr. Boyko, I think, wants to speak.

    Mr. Ian Boyko: This might be a good time to add that there's some very good research done by a bankruptcy expert named Saul Schwartz that we're using in our charter challenge to the bankruptcy and insolvency changes in 1998. There are programs in place for female PhD students and students with dependents, but there is still a dramatic difference in the debts graduates carry. The research Saul Schwartz did specifically showed that the people who were affected by the bankruptcy and insolvency changes in 1998 were disproportionately women, because of the debts they carry, the time they spend out of the workforce on average, and so on. I think that's important to know.

    The Chair: I think Madame Bourgeois was also hoping someone from EDULINX or BDP would comment or respond to her original question.

  (1200)  

    Ms. Sandra Ferguson: I think the HRDC officials have really covered the explanations. It truly is a policy regulation issue that service providers are not experts in.

    The Chair: You'll get an extra round, Madame Bourgeois.

[Translation]

    Ms. Diane Bourgeois: Fine. Thank you.

[English]

    The Chair: Mr. McGuire.

    Mr. Joe McGuire (Egmont, Lib.): Thank you, Madam Chair.

    I'm wondering about the other provinces. You say Saskatchewan and Ontario are into your integrated programs. Is there any progress being made with other provinces joining the program?

    Mr. David Cogliati: We certainly have had discussions, but it may be premature for me to indicate which ones we're close to and which ones have said, not in the short term. Several of the provinces with whom we've had discussions have entered into contractual arrangements for two, three, four years, and in some cases the window of opportunity for an integration agreement may be a function of the expiration of those contractual arrangements.

    We have had discussions, and we are continuing. In fact, we're having one next Monday evening with one of the provinces. We've been out east, we've talked to the provinces out there, and we are certainly pursuing this. Our best spokespersons, to be honest, are the Provinces of Ontario and Saskatchewan, who, when we get into a federal-provincial forum, speak quite eloquently about the advantages, from their perspective, for the students in these integration agreements.

    Mr. Joe McGuire: Right.

    The Chair: I'm just curious. Do you have a target date for when you might get those kinds of agreements with the other provinces?

    Mr. David Cogliati: We don't have anything fixed. As I said, it largely depends on the contractual arrangements each province has. The sooner we can do these, the better, but we don't have a fixed date when we stop talking to them.

    The Chair: Is that the only impediment, from your perspective? Are there provinces that just don't accept the premise?

    Mr. David Cogliati: Several have indicated that it's not an immediate priority for them. None have said it is philosophically absolutely the wrong way to go, but some are warmer than others. How's that? That's dancing.

    The Chair: I'm sorry, Mr. McGuire. That's not using up your time.

    Mr. Joe McGuire: It's no problem.

    On the interest relief, I've had a number of inquiries. People who were making $10 an hour qualified for interest relief, and when it went up to $12 an hour, they no longer qualified. Basically, they were still as badly off at $12 an hour as they were at $10. What are the levels of income to qualify and to lose your qualifications on interest relief?

    Ms. Dale Barbour: There are a number of factors that have to be taken into consideration when you're looking at approving interest relief. It isn't strictly based on the level of income the individual has. It is based on the amount of money they're actually paying on their student loans, the amount of debt they have, the family income they are bringing in, and the number of people in their family. We have a specific income table that's used. But there are other things the individual would have to do. For example, they have to give us proof of income, and there are many individuals who, for whatever reason, are not able to do that, so the applications cannot be approved. But it's not strictly just the income you are making that determines whether you have it approved.

    Mr. David Cogliati: As a point of clarification, you're absolutely correct, it tends to be an all or nothing kind of proposition. Your income is either low enough that you qualify or it's not. Back in 1998-1999 there was a very serious look at a graduated income relief proposal, and unfortunately, the banks had difficulty trying to determine how they were going to deal with that in the light of the Y2K systems exercise that was going on at the same time. So it was, in effect, put on a shelf. But graduated interest relief would be a way of dealing with that kind of issue, and I can say that we have looked at it and are looking at it, and possibly, we'll be looking at it in the context of the federal-provincial working group on potential improvements to the program.

    Mr. Joe McGuire: When do you think that might be implemented? Do you have a timetable on that?

    Mr. David Cogliati: I don't make the call, but we're looking to bring proposals forward to ministers this fall for short-term improvements, and then possibly a spring legislative amendment process. For some changes there may be a window of opportunity for the next loan year, starting next summer.

    Mr. Joe McGuire: In regard to the aboriginal partnership, we just went through a process on employment equity, where one of the groups that still hasn't made much of an impact on the country is the aboriginal people. What are you doing in regard to the aboriginal partnership? You say you're close to an agreement.

  (1205)  

    Ms. Dale Barbour: That's part of the contract we signed with EDULINX, that they would develop a partnership with an aboriginal organization, and that has happened. The contract was negotiated and put in place as of February of this year. What it involves is providing additional counselling for aboriginal clients to make sure they're making sound decisions on career choices and educational choices. We're also, this coming month, setting up a process where we'll have a call centre in Winnipeg handling some of the inquiries of our aboriginal borrowers. EDULINX has also done a great deal of work in having sensitivity training provided to the operators so that everybody has a better understanding of the cultural differences.

    Mr. Joe McGuire: Thank you.

    The Chair: Mr. Solberg.

    Mr. Monte Solberg: Thank you very much, Madam Chair.

    Mr. Cogliati, in your opening remarks you made reference to three concerns. One was rising tuition, one was rising debt, and one was disadvantaged groups. I guess it's tied to debt levels. Again, I'm new to the committee, so everyone else probably knows the answer to this, but why is the default rate so much higher with private institutions as compared to public?

    Mr. David Cogliati: This will be a gross generalization, but it's in part a function of the quality of education at the public institutions. As an example, they're graduating with a degree, or in some cases a graduate degree. The level of tuition at some of the privates is significant, so students take on quite a bit of debt for a relatively short period of time of study. Then the job market may or may not be what they had anticipated going into that level of study.

    Mr. Monte Solberg: High-tech, I would think, would be a good example.

    Mr. David Cogliati: A classic example would where somebody's been trained--I'm making this up--to be an Oracle database manager, he graduates from a private college, and they're not hiring. So now he's got a debt, he can't get a job, and he really doesn't have a university degree to wave in front of an employer.

    Mr. Monte Solberg: You mentioned disadvantaged groups, aboriginals, low-income Canadians. Do you have any numbers on how many people want access to post-secondary education as compared to how many actually receive it? Do you have a sense of how big the universe is and how well it's being serviced?

    Mr. David Cogliati: There have been a number of studies. I don't have it on the top of my head about the wants for getting in. One of the things that concerns policy-makers about the low-income strata in respect of access is the sticker price of going to school. That in itself discourages them from even approaching a university or another post-secondary level institution.

    Mr. Monte Solberg: Obviously, that's pretty important to know in order to design a program that can help these people.

    I want to go back to something Mr. Arbuckle raised originally, and it's already been addressed once, the issue of on-line services. I remember, when the computer revolution was really taking hold, I saw this in private industry, but it also happened in government. Government or an institution set out to develop their own software, as it was then; everyone was trying to develop their own software for everything, and they wouldn't use whatever was off the shelf. There were so many horror stories about things that just didn't work. I'm worried that maybe we're running into the same thing with this one big pipe issue that you're talking about through Treasury Board. Doesn't it make some sense to have at least some redundancy? Why not have some programs that are doing their own thing on this while the government beavers away? Potentially, this could take a long time, and perhaps it will never really happen, at least in the way the government wants.

  (1210)  

    Mr. David Cogliati: I used to be in the computer design business. It's less the pipes and it's more the standards we would have to meet in order to exchange that information with citizens of Canada. We're not trying to design one pipe for the Government of Canada. The bottleneck right now concerns what exactly the standard is of authenticity we're going to demand both of the person at the other end and of ourselves before we exchange personal private information across the line. The holdup at the moment is the issue of standards. What exactly will be the public key infrastructure standard? What level of security will be demanded? It's that more than trying to construct one pipe that everything would filter through.

    Mr. Monte Solberg: So the problem is getting agreement amongst departments?

    Mr. David Cogliati: Amongst departments and the central agencies that will determine what that standard is, because they're dealing with the Privacy Act, of course, and various pieces of legislation that demand confidentiality. They have to be absolutely sure there are no breaches in that confidentiality before we start exchanging personal information, financial information, across the Internet. It's a very high bar they're setting, there's no question. It's that balance between the protection of privacy and access to information, which we think would be a huge improvement in service levels, where, as Ian Boyko said earlier, instead of chasing somebody who knows something about your account, you'd have the ability to call your account up on-line to find out how much you owe or how much you have left to pay.

    Mr. Monte Solberg: We all do this every day. How big a priority is this for the government? It's one of those things where everyone agrees it should be done, and everyone knows roughly how to do it, but if it's not a priority, then—

    Mr. David Cogliati: I think it is quite an intense priority, because a lot of funding has gone all around to departments to start building up the government on-line infrastructure to be ready. So the departments are now saying to the central agencies, give us the standard. It doesn't matter how high you've set the bar, we'll meet it, but set the bar.

    Mr. Monte Solberg: All right.

    The Chair: Madame Bourgeois.

[Translation]

    Ms. Diane Bourgeois: Thank you, Madam Chair. I would like to clarify the question that I asked earlier in the hope that the answer will be clear as well.

    Following the World Conference on Women that was held in Beijing in 1995, a conference that brought together all of the Status of Women ministers, Canada had agreed to put forward a comparative gender analysis. I would like to come back to that. I believe this is extremely important, particularly since Mr. Boyko said earlier that statistics do exist to demonstrate that female post-secondary students are deeply in debt.

    Status of Women Canada has a $10 million budget for comparative gender analysis programs.

    I would like to know if anyone asked the representatives of the Human Resources Development Department to collate data relating to gender, apart from grants or other help given to students with dependents.

    What I would like to know is whether or not you have been asked to take into account the gender differences and I would like to know if you, along with your partners, the two other lending institutions, would be ready to implement a comparative gender analysis in order to determine how seriously women are affected by their heavy debt load.

    Thank you, Madam Chair.

[English]

    Mr. David Cogliati: The department has, in fact, a unit in the strategic policy branch that does gender-based analysis. It's a requirement, as we move policies along, to put them through that gender-analysis lens. We collect statistics already on our program by gender, so we do have some gender-based analysis. I don't know if we've necessarily shared that with our service provider colleagues, because I'm not sure it would change the way they do business dramatically. It would probably have much more of an impact on the policies, and in fact, whenever we do bring policies forward, one of the criteria we work through on this checklist is what the gender-based analysis is telling us and proper program design. In the context of that ADM level committee, if and when we bring proposals forward, they'll be subjected to that gender-based analysis.

  (1215)  

[Translation]

    Ms. Diane Bourgeois: Thank you.

[English]

    The Chair: Mr. McGuire.

    Mr. Joe McGuire: Thank you, Madam Chair.

    It's been said more and more often that we're well on our way to eliminating most of our low- and middle-income students from ever receiving a higher education. You're in the business of helping those people. Do you see fewer and fewer of these people entering institutions of higher learning? Are these people alarmists, or are we actually seeing the purpose for you guys being where you are eliminated, as we are going to end up with just children of higher-income families getting a higher education?

    Mr. David Cogliati: If you take a close look at the skills in learning paper, there's a front-end piece in there--the buzzword the bureaucrats use is a diagnostique--that shows access by income groupings. There are three income groupings, low, middle, and high. In all three cases over the last decade the proportion going to post-secondary has increased. So to answer your first question as to whether we are seeing fewer with low income, the answer is, no, we're actually seeing more.

    What's of concern, from that analysis, is that the rate of growth of the low-income third is much lower than the rate of growth of the middle and the higher incomes. So the gap is widening, so to speak. I think that's the major cause for concern on the part of governments and the reason a lot of the programs need to be tweaked. Perhaps loans by themselves are not sufficient. I think it's one of the reasons the government introduced the millennium scholarship, the non-repayable financial assistance.

    But it's not always purely financial considerations that dictate whether or not someone is going to go to post-secondary. In some cases it's academic performance. In some cases, interestingly, it's the academic attainment of the parents, which has a significantly high correlation with the education of the younger generation. Just making more money available may or may not be the trick, and we may have to provide other kinds of information, labour market information, so they'll fully understand the repercussions of lower educational attainment. It's a big concern, that's why I mentioned it here. They haven't necessarily decreased, but their rate of growth is falling more and more behind other income cohorts. That's a cause for concern.

    Mr. Joe McGuire: What do you think, Liam?

    Mr. Liam Arbuckle: The study had a very good graph that depicted the likelihood of the lower socio-economic groups entering university education. It's at two to one, basically, that's what the gap is widening to. For every two higher-income family children entering university, there's one from lower down. Also, there are some provincial data, as from the University of Western Ontario. When they had their professional program of medicine deregulated for tuition, the average median income of those families with children entering the medicine programs rose dramatically. I don't have the numbers in my head right now, but it was a significant jump. So you can see that just within professional programs: as soon as tuition is deregulated, you're selecting your doctors and your lawyers from a very small percentage of the population, which never services the country properly, I would think. We have always advocated that loans may not be the only answer, as Dave said before.

    So from our point of view, it's worrisome, and we think the high levels of tuition are driving it in that direction as well.

  (1220)  

    Mr. Joe McGuire: Thank you.

    The Chair: Are there further comments?

    Mr. Ian Boyko: Yes. I echo what Liam was saying. I'm not totally sure about the timeline Dave is talking about in respect of increased participation rates. I'm sure, since 1965, when the Canada student loans program was introduced, we have more people from low incomes participating, but Liam referred to a couple of very recent, very credible studies done by the University of Western Ontario, Statistics Canada, and the Canadian Medical Association that made a very close analysis of before and after significant tuition fee increases. The participation rates from low-income families plummets, and in some cases it's cut in half.

    On the notion that there are a lot of factors not related to finances that are keeping people out of universities and colleges, while these factors exist, I challenge anybody out there in the sector to poll people who are attending Upper Canada College in Toronto and see what kind of non-financial barriers are keeping those folks out of university. I suspect that there are not a lot, that they're going because they can afford it and they make no bones about it. It's these other non-financial issues that are only creeping up with these disadvantaged groups. People don't want to look at the financial barriers that are there. The polling we've done and the research done by the groups I mentioned say pretty clearly that finances are the single biggest issue, but a barrier is a barrier.

    The Chair: Good.

    Mr. Frankham, you talked about servicing students worldwide. Are there funds available to Canadian students who are studying in U.S. or U.K. institutions, and how would they secure them?

    Mr. David Cogliati: Indeed, they are available through their province of residence, and about 2% of all the students who qualify for student loans study outside Canada.

    The Chair: So it's direct application through the province.

    Mr. David Cogliati: That's correct, the province of residence.

    The Chair: David, in your presentation in October you indicated in a response to Ms. Davies that your target was to put money in the account the day after the “do not disburse before” date, In your presentation today you said right now you're working on about a week. So when might what you're currently doing meet your target time of a day?

    Mr. David Cogliati: To go back to zero-based accounting, we're doing a pilot on that for part-time loans through this fall. Depending on how that particular vehicle works, we may be able to extend it to the full-time, and that's when we would get the one-day turnaround. But as I think Mr. Solberg mentioned, there are some Financial Administration Act issues we have to deal with, which are different from what the banks had to deal with.

    The Chair: Dale.

    Ms. Dale Barbour: I just wanted to add something to that. Starting the process three days before the “do not disburse before” date for some borrowers actually does mean they will have the dollars in their account the day after that date. What we're faced with at times is that some students don't actually submit their documents ahead of time. The service providers are not able to take that action until they verify the information and send the document on its way. But traditionally, for the September peak, most of the students submit their documents ahead of time. We think there will be a significant difference this September with length of time waiting for funds.

    The Chair: Thank you.

    Mr. Tonks.

    Mr. Alan Tonks: From my own personal experience, Mr. Boyko, to address your statement--and I'm not taking exception to it--I have an observation. With Upper Canada College, if you did a review, you'd probably find that rather than it being an elitist reason, the parents fall into an income category in many cases where their priority is to send their young person there. It's a choice that we offer, there's no tax deductibility given for it and so on.

    If we're looking at continuing education, with the Canada student loan program being the framework to lock into people in need, there may be lots of young adults who have gone through Upper Canada College and are not in a position where they're able to sustain themselves and will apply for a loan. I think that's the important thing we have to look at, not broadly saying everyone is going to be self-sustaining in perpetuity. Life isn't like that. At some point don't you want to be your own person? The loan should treat you as that. The program should treat you as that.

    I hope I'm not preaching down or being patronizing, but it appeared to me that there may be a bit of a philosophical gap in how you're viewing the program and the world.

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    Mr. Ian Boyko: I'm not 100% clear about the question. I understand the sentiment of the statement. Upper Canada College is, of course, only used an example. There are people who can afford to go and are not citing non-financial reasons for not going. The data speak for themselves. Maybe ten years ago it would have been a little more rhetorical to say people from low-income families aren't gaining access to the system in the numbers they should be, but that's not the case any more. We have the data to show that it's the people from low-income backgrounds and women and people from disadvantaged groups who are being turned off by the sticker shock of a $25,000 law degree at the University of Toronto. It's those people who are primarily taking out the biggest loans and having trouble with repayment.

    I'm not suggesting that as long as your parents make a lot and as long as your parents are educated, you're automatically going to be self-sustaining in the future. That, of course, is not the case, and the loan system should be there for people who need access to financial aid. But let's not kid ourselves about the demographics of people who are relying the most on grants and loans and the reasons they're citing for not continuing to post-secondary education. I do, however, appreciate the point about Upper Canada College.

    Mr. Alan Tonks: That's fine. Thank you.

    The Chair: We have a little bit of time, and if any of the witnesses would like to add closing remarks, we can do this. I'll go in reverse order, to EDULINX first.

    Ms. Sandra Ferguson: Thank you, Madam Chair.

    We believe HRDC, in fact our country, has entrusted EDULINX with the accurate and efficient servicing of hundreds of thousands of student loans. We take the responsbility extremely seriously, and we look forward to the ongoing improvement of the program, as all the stakeholders are definitely committed to improving the servicing for students. Thank you very much for the opportunity to speak about it today.

    The Chair: Mr. Boyko.

    Mr. Ian Boyko: Again, we appreciate the invitation. These discussions are very productive. Maybe the only thing that hasn't already been documented in my remarks and I didn't get to go to is Mr. McGuire's question about the things we could do to improve interest relief. It's actually a program that is surpassing expectations with the number of people who are qualifying, but before we look at improving interest relief, we should look at improving debt reduction and repayment, because there's a program that's fallen flat on its face. Of course, Dave and I have talked about this in the past. DRR, debt reduction and repayment, is a bigger priority than interest relief. I just wanted to put that on record.

    Thanks.

    The Chair: Thank you.

    From CASFAA, Tony Norrad.

    Mr. Tony Norrad: Thank you, Madam Chair.

    I don't think there's one person around this table who doesn't believe one of the reasons we moved to a direct loan financing program with the federal government was really to increase and improve the overall service delivery to our student borrowers. And a number of the points I raised in my presentation today and we have talked about and been in consultation with CSLP about are very important. Again, with disbursement before direct loans, we were looking at a three-day benchmark, now in the direct loan program we're looking at one week. I think we want to be working towards moving that, as you mentioned Madam Chair, to a one-day turnaround after the “do not disburse before” date. I think we'll continue to work with CSLP on that particular area.

    With regard to the communications strategies, there is no doubt that as we move through this whole transition period, where students are going to have multiple loan products, and the complexity of this program continues to grow, we want to make sure our strategies and our communications with our students are adequate enough that they fully understand what their responsibilities are going to be, both while they're in study and when they move into repayment situations.

    I want to affirm, on behalf of our association, our position in favouring a simplified, harmonized student financial assistance program that will facilitate, I believe, student access. We are particularly encouraged to learn that for the past year the provinces of Saskatchewan and Ontario have worked with the federal government in developing an integrated loan program. Integration, we understand, has piqued the interest of other provinces, and we certainly hope the federal government will continue to work with those provinces. This can only serve to strengthen the existing financial assistance programs in Canada and to help to reduce the overall complexity of the programs.

    Again, on behalf of the Canadian Association of Student Financial Aid Administrators, I'd like to thank you, the committee, for this opportunity to highlight some of the challenges we have encountered during this transitional period into direct loan financing. We look forward to continuing to work with the members of this standing committee, the Canada student loans program, and the service providers to ensure that the direct program is being delivered to student borrowers in the most effective way possible.

    Thank you.

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    The Chair: Thank you.

    From BDP, David Frankham.

    Mr. David Frankham: I'd like to thank you for inviting me today. It's always a pleasure to appear before you. I find it most interesting and stimulating, and the topics are great.

    I just want to assure each and every one of you, as I have in the past, that BDP is committed to improving the student loan experience. Working closely with our sponsors, we see some real and significant changes, some of which we've talked about today, for example, the on-line access for students. Hopefully, Dave can get through the little bottleneck here and we can get on and provide that. I think things like that will really improve it. Along with our partners here, EDULINX, we're committed to really making it better.

    Thank you.

    The Chair: Good.

    My apologies, Liam, from CASA,

    Mr. Liam Arbuckle: You can see how it was not just the issue of administrative arrangements that occurred today and how quickly it went into issues of policy with CSLP. I would again remind the committee how beneficial it could be to hold some hearings, perhaps in the fall, about issues of needs assessment and what not for the Canadian student loan program, especially in light of the skills and learning paper that lays out these goals of improving accessibility and what not. That would be my only point to the committee.

    The Chair: Thank you.

    And finally, from HRD, David.

    Mr. David Cogliati: First of all, thanks to the committee. It's always a pleasure to come here, and we welcome the opportunity to lay ourselves bare. If there are knocks to be absorbed, that's what we're here for, and we take that responsibility seriously.

    This is an incredibly important program, important for the country, and we take it really seriously. And the fact that we're here with our colleagues and--I was going to say our clients, but our fellow citizens, because I was reminded that clients may not always be the most appropriate term with our fellow citizens. I went to speak at a large gathering of student representatives and was reminded that calling people clients may not be the best thing in the world. But we take it seriously and we respect the opinion of our partners in the delivery of this. So the opportunity to come together in this kind of group is welcomed, and I dare say we'll be seeing you again.

    The Chair: I'm sure you will.

    As a personal observation, I'm very encouraged when fellow citizens, partners, clients--as you wish not to call them--can refer to one another on a first-name basis. It's obvious that there's a very close working relationship and that there's a great deal of goodwill on all sides to ensure that our students are receiving the best possible service. I know there will be an opportunity, as we continue to have this unfold, for you to come back to the committee. Certainly, when the committee starts up its work again in the fall, I think the skills and learning agenda will be on a high burner and there will be opportunity for many of you to come back, either together like this or independently on other issues.

    So I thank each and every one of you. I'm particularly pleased to see representatives from the student groups. You are serving your fellow students extremely well, and I know that the future of our country is in good hands with the youth who are coming up.

    Before I adjourn the committee, for members of the committee, next Thursday's meeting is going to be taken over by our subcommittee on children and youth at risk. They are working on a report, and many of you serve on both committees. They will take up our regular time slot on Thursday, and the main committee will reconvene on Tuesday, June 11, to continue our work on the employment equity report.

    Thank you, all. Meeting adjourned.