Bob Green Innes,


curmudgeon

Hamiltonian by birth & occupation!  

.... seeking to restore values, traditions, institutions, laws and protections Canadians once enjoyed
      .....lost by apathy
          ..... but stolen nonetheless




WARNING

BEWARE OSAP FRAUD

Like the Mafia, OSAP is using sucker rates to tempt innocent students into taking on too much debt. Their calculator shows a default setting of 3.5% which is ludicrous when they know damn well the rate right now is above 5%. Plus, they know rates are headed higher, possibly MUCH higher, like double or triple by the time you were hoping to pay it off. Do not let them sucker you in. See what you can afford at 10%, which is the max setting the calculator allows. Their strategem is deplorable, tentamount to fraudulent. Taxpayers and students, screwed by banksters (agents) - again.

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TAGS

FCP, CAP, Election 2011

Bank of Canada (BOC)

Money - create, inflate, deflate, banks

Fluoridation

LRT 1ST, Latest

Stadium, Ti-Cats, Pan-Am

student debt, OSAP

Light bulbs, ban

Green

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Back to Initial post in this series - Reflections on Student Debt & higher education. #17,


OSAP, the Student Debt Trap

-#18 Jan 11, 2011, updates, Dec 2011.


My apologies for having you navigate away from the base page but the technical arrangement I wanted to do here wouldn't work on the original pages.

Where were we? Oh yeah. . . . . . . "Don't worry", the kid was saying. "OSAP's got me covered. Everyone's doing it, no problemo". You shudder. You're still trying to get your dearly beloved to understand money isn't growing on a tree in the backyard, and even if it is, it shouldn't be treated as such.

Indeed, OSAP does promise to take care of everything. Within limits of course. Its website is most welcoming, designed to calm the fears of any student or parent, and encourages any prospective student to follow their dreams and become the best that they can be.

There's even Ontario's "Student Access Guarantee: No qualified Ontario student will be prevented from pursuing a postsecondary education due to lack of financial support".

What's not to like? Well, maybe you feel all those lessons you taught your kid about living within one's means and saving before spending are beginning to crumble, though to be sure, many would not get there without such support. Sensible advice of working for a year or two before university falls prey to the fear of higher dreams succumbing to mercenary schemes. A first car is very tempting. A co-op program is not always available. But is all this borrowing being made too easy? We hear horror stories about grads carrying huge debts. I listened to a person interviewed on CBC quip that she graduated with a $45,000 "bar tab" - and then went a further $40,000 into the hole because of the bad credit card habit she learned in school. Is that what we call an education? Is this contributing to our society's bent for immediate gratification? Isn't that the very antithesis of the kind of long term thinking that a good education is supposed to inculcate? Isn't that why we study history? What does history say about a society of the indebted? One thing for sure - banks love such folks.

Let's have a look at some info I pulled off the OSAP site. Let's see if you find the same kind of easy money feel to it as I do. Will you, like me, hit the roof over the interest rate issue or am i reading too much into it? Please do not rely on the info here for any of your own planning, this is just for discussion purposes - getting a feel for how it all works. Although collected recently, it may be out of date by the time you read it so act accordingly. Click where indicated to reveal it, click at the same spot to hide it. Which is a bit of HTML code I just found and which is way too cool, no?!

Fine Print from the OSAP website - read disclaimer (click to display or hide)

Some stories click to expand or collapse)

Here is the coolest little gizmo I've seen for awhile. If you're too rushed to read, just click the LISTEN button. It's still experimental, so please let me know if I need to fix it! The voice isn't perfect but seems remarkably coherent. Or you can save the mp3 file to listen from your ipod while you're walking or driving. To do this, right click on the button, and save target to your system. Be sure to rename the file with the extension .mp3.

After plowing through all this info, two streams of thought present themselves. The interest rate thing, which boils my blood, and the overall educational angle, which has many components.

On the latter, my little heart softens up - just a little. No doubt there are worthy students who could not afford an education without borrowing money, No doubt, society needs a highly educated workforce. What is not to like?

When everything works out, indeed, there is nothing to dislike. With a good job, loans can be paid off quickly. Everybody benefits. But loans, as we have seen, can go sour, both for individuals, and for whole nations. Therefore I believe we should look this "gift horse" in the mouth. First, a few guesses. I will assume that 20% of the students are aces, 60% are the muddling middle, and 20% are in the wrong place, as suggested in the opening blog or the story about Mary Joosten. Further, I will posit that many of the aces are foreigners, as will be easily found by a google search, or a drive through a premier campus. Taken together, this means that the majority of our kids are vulnerable to things not going so swimmingly.

Negative outcomes can be caused by all sorts of factors - personal, institutional, economic and systemic - too many to list. These are the risks that one takes, and I have no objection to individuals taking risks. But I have a lot of objection to 'the system' duping whole student populations. It is one thing for a fast talking swindler to sell some teenager an expensive car, or a phony trinket, or even an education at inflated prices, even if it relys on borrowed money. It is quite another for our government to bully huge batches of kids into tricky dicky loans, or into credit card living, or to confuse education versus credentialism, as I will discuss later. Grade 12 grads are totally unprepared to assess the implications of their loan - which I have not heard discussed anywhere. Plus, kids like Kelli Space are being encouraged to adopt risky credit behaviour, which runs counter to the lesson most parents want their kids to learn. This begins to look like a con game of gigantic proportions.

Consider that huge numbers of kids switch courses. One recruiter mentioned 50%. Nothing wrong with that, but shouldn't it be a yellow flag? An indication that the borrowing of relatively huge sums by young folks basically telling their parents where to get off, is based on a wobbly project? An education is not like a salable physical asset that backs a mortgage. The educational asset is very nice, but financially many degrees may be totally useless, unless the student can leverage it into a career. Lots can't. (Certainly one would not suggest students should not change, which would only mean they stuck to a poor fit just for the sake of it.) But maybe more kids should wait a year, instead of being peer pressured to move faster than their minds have really developed? We should wonder why nobody pushes that option.

Putting aside the notion that there is any sense to the qualification race (credentialism), for the moment, maybe you, like me, sensed that the tenor of the OSAP site is to sweet talk innocent and excited students into signing themselves up for the very same con job, that is causing the US and Europe so much anguish - variable rate loans. We should be familiar by now with dangers of adjustable rate mortgages. Same thing. Doesn't anyone read the papers? Doesn't anyone get it? Such loans are toxic because one does not appreciate how much repayment difficulties increase as interest rates rise. Only a few old boomers like me can recall when rates hit 20%. It happened once. It can happen again.

The whole idea of asking grade 12 graduates to fill in the interest rate box is absurd. Outrageous. A high school grad is expected to do what Mark Carney, ex Goldman Snakes, and now Governor of the Bank of Canada, refuses to do - determine a long term honest and realistic forecast of interest rates! Aren't we kidding ourselves? Most applicants will probably leave the setting at the default of 3.5% which is ridiculous given that real inflation is about triple that rate. The chances of rates being under 4% in 10 years seem laughable, especially in light of my earlier blogs on the banking system. Indeed, even the maximum setting of 10% seems absurdly low - I would certainly not lend out my money for any long term at this rate, despite it being 10 times what I get from my bank. Folks are not clued in yet - one has to consider what one can do with the dollars one gets back as the loan is paid off. How much has gas gone up this year?

Anyway, Mark Carney is busy telling Canadians not to go into so much debt, and OSAP is busy sucking young innocent students, into variable rate debt they have no hope of appreciating. What choice do they have anyway? Take the loan, and hope the gummerment will cover your ass if you have problems? That can become a real headache if a good job doesn't materialize. Is that what we want for our kids' future - bowing and scraping to collection agents, as the poster above noted?

reader skips down

Just to put this into perspective and change the pace a little, let's try out a little polling service that i discovered recently. Being a curmudgeon, I've devised a suitably diabolical task for you - of ten true but conflicting statements, please chose the most true! Canadians should answer for Canada, all others for the US (or whatever).

This survey is a new invention designed to increase electrical brain activity to the point a fuse blows, as will be indicated by your actually making a selection! The scientific conclusion will be that you blew a fuse. The unscientific conclusion will indicate which dichotomy sets you off the most. But I thought it was a fun way to present the conflicting sentiments we might be sharing over this dilemma. Is it possible that student needs can be met by anyone not owning a diamond mine?

So if the this entire scheme seems like a scam, what could be the purpose? What do we see when we look closely at this gift horse?

click to reveal this obvious little secret!!

reader starts again

Some may protest I'm sure, the same folks that think everything is hunkey-dorey, but we have to also think about what we are trying to accomplish. One of the ideas of higher education is that the more one adopts a future orientation, and accepts delayed gratification, the more one is likely to make a significant contribution. Almost every major advance is preceded by endless effort and error. But by means of loan programs such as this, we reinforce instant gratification, short term thinking, short term goals and short term measurements.

We also have to ask WHY so many students need such big student loans. This is because the entire system has become exorbitantly expensive. Overpaid bureaucrats and overpaid profs soaking a million students for an overrated degree too many folks hardly use - but employers demand anyway, just because they can. Some call that degree creep, others, credentialism. When we made these credentials mandatory, we leave the kids too little maneuvering room. Taxpayers are footing much of the bill (80%) - but is there any real offsetting gain? Slowly, second, and even third degrees, are exerting themselves into the workforce, but to what benefit? Canadian living cost creep ever higher in real terms. Tuition is high. Parental wages are falling in real terms. Taxes are sucking the lifeblood out of the economy, in order to pay for fat bureaucrats and all the schemes put in place by Boomers for Boomers, not Gen Xrs.

Meanwhile, the good jobs the grads are hoping to get, are being shipped off to China, as fast as our leading citizens can arrange it. Free trade they call it, ignoring the currency manipulation that keeps that party going. Meanwhile, everyone struggles with high taxes, that is supposed to pay for all this, but doesn't. Canadians pay taxes until June, but university education, which is supposed to benefit everybody, is not free (or nearly so) as it is in France, Germany and the Nordic nations. No. Boomers get free health care and expect themselves to be looked after in expensive nursing homes, even if they have no savings. People who should, and could be out working, are enjoying welfare life (while working under the table). Who will pay for all this? The kids. We will leave our trillion dollar debts to the next generation.

The kids, once out of high school, get little benefit from all the taxes we pay. They can't get a decent job without a degree, or two. Even students trying to earn a few bucks in part-time 'jobs', are increasingly being told the only thing available is unpaid volunteer positions. Hey, young kids are a liability, not a resource any more - our vaunted system took care of that.

The whole darn thing smells like a scam, or maybe a bubble. Every year, two to three hundred thousand high school grads traipse off to our grand institutions, few with any definite goal in mind, except to get away from home and enjoy themselves, leaning on parents, grandparents and greedy banks to come up with the 17 grand for a year of higher 'education'.

Don't get me wrong - nothing should be completely free, or it just gets abused. Nor should we abandon higher education. But the way we have stacked the deck in favour of boomers, and against kids in a way this boomer thinks is completely unfair. Just to make absolutely sure they start out on the wrong foot, it seems that we have devised a cunning system of both persuading them that all this crap is essential, AND then we developed a debt trap for innocents to fall into. You hear the stories - new grads owing 50 to 100 grand and unable to find a job while interest is piling up. Employers are saying universities are failing. Universities say high schools are failing. High schools say grade schools are failing. Taxpayers are owed $15 billion or so and the only ones to really benefit, as noted, are those who get the money regardless of outcome - , bureaucrats, boomers and bankers. As a final poke-in-the-eye, bankers may be setting up a second sting in the form of a bursting bubble to ensure the hapless taxpayer gets screwed again. The US situation is particularly bleak with private colleges producing disastrous levels of defaults.

One can now see OSAP in a new light - that of a facilitating seducer, tempting young impressionable students with all kinds of promises, in order to sucker them into a lifetime of something that even now is being called debt bondage by means of a sucker loan at artificially low rates, while at the same time building a debt bomb for taxpayers. Not a healthy future vision. I think its time everybody involved had an attitude adjustment.

Caveat Emptor. DISCLAIMER. I'm not a lawyer and may easily have misunderstood information - you are responsible for ascertaining facts for yourself!!!

Stay Tuned :-)

Bob Green Innes


Comments

-

Date: Tuesday, 19 April 2011, 7:24 AM

I really appreciate the honesty and time you took to research on OSAP and the literal Debt Trap it is. I am 35 and currently 70k in Student Loan Debt, due to changes in my finances during the recession crunch in 2008 my overall family income dwindled from 2 person to one person and of course my Provincial Loans is now in Collections.

As an Immigrant and ethnic minority, OSAP not only gives you false hope but continues the cycle of financial struggle and poverty. Although I have a degree I cannot find employment that suit my educational background and I am half-way through my Masters which I discontinued because I can no longer afford to pay for it myself and no longer qualify for OSAP. I am sure you heard many horror stories and mine is not the 1st.

Thanks for the time you took to break this down because many unknowing high-school students are unaware of the false promise OSAP bring, because although you may get the education you still have to pay for it and may not get a job. I currently have an 18 yr old son graduating from high school in June and I shudder to think that he may have to consider OSAP since I cannot afford to pay for his fees, after our family living costs, my student loan payments..like I said it enables a cycle of poverty.

Sincerely,

Rachelle

Thanks Rachelle. Ouch.

There are two components that must be pursued, especially in light of the monetary tsunami about to be unleashed in the US which will inevitably bring high interest rates that will crush the Rachelles of this world, and likely her son as well. First the government must take steps to recognise the problem, its complicity in the scam, and the need for remedial programs such as outright debt forgiveness, lower tuition, etc. Secondly, the kids like her son, now contemplating their future must, in the absence of such gummerment foresight (an oxymoron?), look outside the box, especially where there is no backstop such as a rich uncle or well paying job somewhere in the family. Perhaps also, I will put in a shameless plug during this federal election, for the Canadian ACtion Party which has the only policies to tackle the monetary issues we face, which indirectly addresses issues such as student loans. Best of luck - please be careful. Bob. April 24, 2011


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Bob's 'Breviations

  • LRT - Light Rapid Transit
  • MSM - Main Stream Media
  • k, Mn, Bn, Tn - thousand, Million, Billion, Trillion Dollars
  • GMO - Genetically Modified Organism Foods
  • PIIGS - Portugal, Iceland, Ireland, (Italy?) Greece, Spain,
  • OSAP - Ontario Student Assistance Program.
  • RAP - Repayment Assistance Plan
  • CSLP - Cdn Student Loan Program
  • Cdn, US, Aus, GB, Fr, Ont, PQ - Places abbreviated
  • F - fluorine or, because I'm lazy, fluoride, fluoridated water


Pet Peeves

      * gummerment overspending
      * what we're doing to our political and educational systems -

      * banksterism.

      * political correctness (equity policies) along with

      * MSM - mainstream media, especially the Spectator, our local rag

      * human rights commissions and their guilty-until-proven-innocent destruction of our ancient rights. Soon to get worse.

      * Overmedication in our society - this link relates to kids ADD, ADHD

      * Rigid thinking, dismissiveness, judgementalism, The Spectator

      * legal liability issues - playgrounds, bake sales gone. This is stupid (corporatism).

      * senior (upper levels of ) gummerment funding - distorts and deflects responsibility

      * Public sector unions

      * credentialism

      * a little rant on mailboxes!

      * spelling in the English language. The real culprit is Johnson and his dictionary that picked words before they ripened!

      * apathetic people. Plato said 'Your silence gives your consent'

      * aphids, Torx screwdrivers, proprietary parts, the great Eyeglass ripoff





    * retired Professional Engineer, married, father of 2 including one still in the system.

    * pursuing many interests - partial list below

    * small-c conservative (but not a Harper PC - that's the party of big business!)

    * investigating causes of economic problems, finding troubling trends and possibilities

    * Former candidate, Hamilton East Stoney Creek, FCP, Public System Trustee, Ward 4



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