2/3 Applicants Denied Student Loan Disability Benefits

From this week's Maclean's

quote:When Lorna Appleby herniated a disc while lifting heavy boxes of paperwork on the job, she was left with debilitating pain from permanent nerve damage in her lower back. She is unable to walk for long periods of time because of the weakness of her left leg. No longer able to work, one comfort was Canada's multiple programs that would financially assist her with her disability—or so she thought.

After a legal battle with her insurance company, Appleby won a settlement that allowed her to purchase a small trailer. She qualified for the BC Disability Benefit and things seemed to be under control. But then interest relief on her student loan—which defers debt without interest for borrowers who are unable to make payments—ran out without warning. Because her student loans were from before 2000, she was denied help from the Canada Student Loan Permanent Disability Benefit and told to pay up, with interest.

Now Appleby is spending $66 per month on student loan payments, $54 of which is interest. Considering that her income from BC Disability is $736 per month, she cannot afford to pay more. That means she is paying interest to the federal government program with money from a provincial program. At this rate, she expects to be making student loan payments for another 10 to 12 years.

"I don't expect anyone to pay off my debt," Appleby said, "but I don't think it is unreasonable to ask that my debt be put on interest relief until I am in a position that I can pay it back without extreme financial hardship."

Appleby is only one of thousands of applicants who were denied the Canada Student Loan (CSL) Permanent Disability Benefit since January 2005. In fact, only one third of the applicants received full or partial support, according to documents obtained by a freedom of information request. However, just why such a large number of applicants are being declined is unclear.

"The program is only there to show that the government is compassionate on the surface," said Julian Benedict, co-founder of the Coalition for Student Loan Fairness, whose organization obtained the information. "If the program was sincere, more people would be approved. Most people know the income requirements. So why are they applying if they know they won't be approved?" Benedict has since filed a further request asking for the reasons behind the rejections.

[ 27 July 2007: Message edited by: robbie_dee ]

It was the same with VLA loans after the second world war. The feds didn't push mortgage insurance on veterans like my father. My mother got stuck with paying on a loan for a broken down VLA house after dad died. Stay the hell out of the army, kiddies.

What is the disadvantage of student loan?

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Your link?  Flooring?  An advertisement?  Or is it not working?

This does not surprise me, as I have said before all our government departments produce beautiful brochures that reassure us that we are still who we think we are but the reality is that they are empty of substance.  I hope and suspect they will now give her a break, media attention tends to get some response if only to make the person drawing attention to the problem go away.

I'm curious why she's getting $736.  BC Disability is supposed to pay $900.  Also, if this is a long-term disability, she should be eligible for CPP Disability and her student loans should be cancelled in their entirety.  When I was very ill in the late 1980s, my doctor wrote to the student loans program and said I didn't have a hope in hell of repaying them and that their letters, etc. were exacerbating my condition (which they certainly were).  They saw the wisdom of that and forgave them.  Of course, things have changed since the 80s.

High-interest student loans a burden for graduates

UBC graduate Jenn Duong says that, thanks to her remaining $23,000 federal student-loan debt, she is unlikely to qualify for a mortgage

And if you have a debilitating injury or health condition, it's no problem. Our liberal-fascist stoogeocracy will take care to add-on usurous interest racked-up on your student loan for you. It's called your student loan debt sentence ball and chain. Forget the oil and gas and massive amounts of hydroelectric power we pay corporate America to take off our collective hands. Because Canadian kids had better learn to pay their way disabled or not!

Clearly, the interest on student loans should be no higher (and probably lower) than standard bank interest.

What I'm wondering about, though, is why people take on such massive amounts of debt in the first place.  Why would you borrow tens of thousands of dollars to get a philosophy undergrad degree?  It qualifies you for nothing.  Why not get your Starbucks job first and then take courses on a part-time basis paying as you go? 

Shouldn't need loans for PSE in the first place.

I was astonished to learn that some students in the US have debts as high as $85,000.00 and the system there is draconian.  I actually think university has become simply part of the indoctrination process resulting in individuals with no choice but to be a slave to the system to repay it for the priveledge of becoming a slave.  lol

I am not saying going to university is a waste of time but do it smart and get what you want from it without being victimized by it.

Yes, that's the ideal.  But first I'd like to get the homeless housed. 

Agreed, thanks for the reality check G. Pie.

Yes. First things first.

Canada can afford both.

Yes we can. The reason I said that was because over the years the two old line parties rolled back social transfers to the provinces by tens of billions of dollars. Some babblers criticize the NDP for not having vision for the future and new ideas for creating new social programs. The federal NDP has examined this issue long and hard. And the NDP discovered that most Canadians want core federal funding restored to those programs, like post-secondary education, and the national housing strategy fought hard for by the federal NDP and civil society groups in the 1970's, and infrastructure spending that used to create good paying full-time jobs in Canada.  We can't go forward until we reclaim the social democracy that was abandoned and even sabotaged by previous Liberal and Tory governments in Ottawa. Many Canadians just want the kinds of well-funded public services that exist in other rich countries.

What is the main disadvantage of student loan?

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What is the main advantages of student loan?

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