COLUMN: Student debt may be crippling our recovery

Are the now-adult children of Burnaby holding back any economic recovery?

I’d argue this may be the case.

First some facts.

Burnaby is home to two major post secondary institutions: SFU (enrolment 28,275) and BCIT (16,000 full time, 32,000 part-time).

In an economy in some distress, SFU’s enrolment for Autumn 2009 jumped about seven per cent, and BCIT’s is up as well.

More than 75 per cent of Burnaby’s 25 to 34-year-olds have a post-secondary degree, diploma or certificate.

That means most also have considerable student loan debt.

The average debt of B.C. students with four-year degrees is more than $27,000. Many carry student loans greater than some mortgages—up to $100,000.

The questions here are simple: who among these people is likely to trade in his clunker for a new car? Who is going to make an offer on a condo or house? Who is going to be part of any consumer-led recovery?

And who has simply disappeared from the “real economy” because they cannot survive after graduation without an alternative identity?

I have taught at SFU for most of the last 30 years.

I have known a large number of students who make me feel confident about the potential of generations to come. Yet I have also known large numbers of students—each, with few exceptions, who understand debt and the commitment to repay—who have slid out of the “normal economy,” and re-identified with their parents’ and grandparents’ birth countries to allow themselves to work abroad on a new passport, and who have taken advantage of such connections to “hide”: from B.C. and Canada student loans. These good and educated citizens of our city have become adept at working locally with bank accounts in the names of others so that governmental agencies do not strip their accounts of needed rent money as they try to move out of their parents’ basements, who live in hope of “a normal life.”

How did we get here?

And how do we get beyond economically losing a generation of our “best and brightest?”

Australia has a simple approach to student debt:

(a) you must repay it

(b) student repayment should be tied to “ability to pay” vs. the current needs of governments or banks.

This makes sense; students should not have to hide from governmental and economic authority.

Now what has this to do with running a business in Burnaby? Actually, quite a bit. If you sell cars, if you are in real estate, if you are in financial services or higher-end retail, where are your future customers? The students buried under student loan debt wish to own something beyond clunkers, they dream of moving out of basement secondary suites and into condos with sunshine for parts of the year, and they live in hope of being able to own chequing accounts which are not regularly garnished by the government.

We would do our economic recovery a great service if we altered the load, the burden of student debt.

Generations X, Y and maybe Z are not seeking a free ride. They—along with the rest of us—would benefit from a repayment regime which is doable, reasonable and sustainable—and perhaps one which also rewards educational success with loan forgiveness as Australia does.

Unless we find a sensible solution to current student debt, our children will not be part of any economic recovery nor of any normal economic future. As a new campaign by the Canadian Federation of Students suggests, “education should not be a debt sentence.”

Those with overwhelming student debt are not some invasive species; they are our future.

Patrick J. Smith is a political science professor at Simon Fraser University and lives in Burnaby’s Heights neighbourhood.

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