Tag: debt

Forgiving Student Loans

~ Loreeebee ~ Leave a comment

Are you in favour of forgiving student loans?  Joe Biden is trying to do just that in the USA.  That means Justin Trudeau won’t be far behind if Biden gets his way, especially with federal elections looming (2024 for the US, 2025 in Canada).  Is this move a bid to win votes?

The Advantages of Forgiving Student Loans

The advantages are somewhat obvious, especially to those eligible for the program.  Paying off (or at least reducing) the massive debt owed by students will certainly boost their economic status. 

forgiving student loans

The Disadvantages

A Divisive Move?

Some feel this move will be divisive, just what any country does not need right now.  The students (or former students) whose decisions on what degree to aim for and where to go were based solely on their economic status. 

I am one of those.   I would have loved to go to university to pursue a career in accounting or teaching.  I could not afford it, nor could my parents afford to help out.  As the fifth of six children in our family, I was only eligible for a small student loan and no grant.   Instead of following my dreams at an out-of-town university (there was not one in the small town I grew up in) I lived at home and went to our community college.  I still barely managed to afford this choice, with a student loan to pay off as a graduation gift. 

Did these facts make me work harder to achieve my diploma in medical laboratory technology?  They sure did.  Does that mean I don’t see the need to help some students deserving of forgiving student loans?  No, but I would like to see lots of conditions so two steps forwards don’t result in four steps backward for the economy, inflation rate, healthcare, and so on.

Will the Rate of Inflation Rise More?

The Federal Reserve Bank of Richmond (in the US) believes it will:

There could also be some stimulating impact, as the debt cancellation could free up borrowers’ cash flow, and the additional spending may create more tax revenue.

However, at the same time, this is also likely to be inflationary.

A key concern about the debt forgiveness program is its inflationary impact in an environment where inflation has been persistently elevated for over a year.

Shifting the Burden to Taxpayers

The Conservative argument is that forgiving student loans would simply (and unfairly) shift the debt from the students to their federal government.  And we all know taxpayers pay for government debt.  Unfortunately, when money gets funneled into one program, other programs suffer.   So, students like myself that struggled to pay for their own education will now pay taxes so others do not have to pay for theirs. 

Biden’s Proposal for American Students

Biden’s proposal says borrowers with an annual income of up to $125,000 or households with a combined income of up to $250,000 are eligible to apply for $10,000 to reduce their current student debt.  However,  those currently with an outstanding debt of less than $10,000 will only get reimbursed for whatever their balance is.  According to the Congressional Budget Office, up to 43 million applicants will qualify for at least partially forgiving student loans.

The Canadian Version

In Canada, the National Student Loans Service Center (NSLSC) implemented its own version for forgiving student loans.  Sort of.  They, from April 2021 to March 31, 2023, eliminated the interest accrued on student loans.  However, any interest accumulated before that date is still owed.  This interest elimination was recently extended permanently after April of 2023. 

In November of 2022, some Canadian provinces lowered maximum payments to 10% of household income from 20% and changed their zero payment income thresholds.  To apply for their Repayment Assistance Plan (RAP), log into your NSLSC account.  So far, only students from New Brunswick, Newfoundland and Labrador, Manitoba, and Saskatchewan are eligible.   Hopefully, other provinces will follow suit. 

Conclusions

I believe, and I realize this may sound selfish, that the majority of our taxes should be for improving the core services our citizens rely on.  Stuff like roads and infrastructure, garbage collection, snow removal, and especially our flailing healthcare system. 

Since graduation years ago, we (hubby and I) paid lots of tax dollars to raise three now self-sufficient children in a comfortable lifestyle.  We chose to have three children because we believed that if we worked hard we could afford to feed, clothe, protect, entertain, and yes, educate them.

Of course, like most other citizens,  we continue to pay taxes too.

Now seniors, we have reached the age where affordable, efficient, and available healthcare is more of a priority to us than forgiving student loans.

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Political Discussions and Opinions

~ Loreeebee ~ Leave a comment

I have had some interesting (and very telling) post-debate political discussions with my youngest son (22 years old).  He asked me whether the federal debate changed my opinion of the political leaders we have to choose a prime minister from.

Personalities Show up in Political Discussions

My own post-debate opinion?  If you are interested in personality, I thought Singh (NDP) was the “winner” last night. He was charming, funny and an eloquent speaker (no ums or aws), but weak (sometimes even evasive) on the primary issues.  Unfortunately (for Singh) nice and charming does not necessarily make a good leader, at least not a leader of a country as diverse and large as Canada.

Scheer (Conservative) had to repeat himself often as was often talked over by either Trudeau (Liberal and current PM) or May (Green), although he did a fair share of it himself.  Not a good look for any of them.  The other two, Bernier (People’s Party) and Blanchet (Bloc Quebecois), were/are only interested in Quebec.  Their presence was distracting in my opinion for a federal election debate. I don’t think they should be included in these circumstances.

Federal Debt

My son’s opinion?  “The debt our country is faced with is not really a problem.”  This appears to be a typical response from his age group.  However, it makes me sick to my stomach. More interested in the “perks” that might be promised or taken away, this opinion was from an uninformed youngster who does not (yet) pay for his own:

  • mortgage
  • taxes
  • car loan
  • groceries
  • insurance (except for his own car)
  • expenses for children
  • education
  • etc, etc, etc

Inevitably, political discussions always end up in arguments as our generation is much more conservative or concerned about the future.

Oil and Gas Reserves

Maybe that’s why I was so impressed with a youngster the same age as this son.  Chris Kitchen’s wrote an article at Queen’s University on why Canada’s oil and gas reserves would and should be beneficial to our economy.

Political Discussion Conclusions

We (my husband and I) have tried, over and over (in many heated political discussions) to get this youngest son to acknowledge that living in growing debt is never a good thing, especially a staggering debt like the one our nation is faced with.  We feel like we are banging our heads against a brick wall.  Are we bad parents because he does not understand this concept?  I keep telling him he will understand in ten years (hopefully less), but he refuses to think that far ahead, let alone plan for it.  In our defence, this son does pay for his own cell phone and clothes as well as car insurance, gas and repairs .  Oh, and LCBO and Uber tabs.

Thankfully, our two older sons, both with mortgages, car payments, and children of their own, get it.  There is only five years difference between our second and third son, so it appears (to me) that it’s not a full generation, but just a demographic, that don’t get it.  At least this theory is apparent in my family.  I have heard from many others that their much older children have the same myopic outlook.

Did you watch the debate?  What are your post-debate conclusions, thoughts, opinions?

Political Battle in Canada

political battle
~ Loreeebee ~ 1 Comment

There is yet another political battle going on in Canada.  Four years ago I warned you to be careful what you wish for. Canadians hoping for a change gave Justin Trudeau a Liberal majority back then.  Many of us were skeptical that the majority of his election promises would/could never happen and those that did would cost us dearly.

Federal Budget

One (huge) example is the federal budget.  In 2015, an election promise claimed the budget would balance itself by 2019. Although many of us saw that simplistic prediction as an enormous red flag,  (the majority of) others were willing to play along, blindly.  Perhaps it’s the handsome smile and fashionable clothing blinding his voters. The problem is they are attributes of someone that has never balanced let alone lived on a budget in his life.

Fast forward to the present: not only is the budget nowhere near balanced, but our national debt is also through the roof by BILLIONS of dollars and growing by the second.  Why that does not scare more Canadians I am not sure.  I worry most about my sons’ and grandchildren’s futures as the cost of living skyrockets out of control.

Scandals

Let’s not forget about the scandals that have plagued the Liberal party these past four years.  Topping the never-ending list is the SNC-Lavalin (an engineering and construction company) fiasco where our Minister of Justice and Attorney General left the Liberal party because she felt bullied and pressured into intervening in an ongoing criminal case against the company. An investigation proved she had reason to feel pressured.

Then there are the recent black and brown-face pictures as well as the outlandish garments Trudeau wore representing Canada abroad. Our incredibly immature, shallow and inappropriate Prime Minister apparently likes to play dress-up, fitting I suppose for a (former) drama teacher craving the spotlight.  Hardly the image we (most I hope) Canadians want to represent us on the global stage. 

Use Your Vote Wisely in this Political Battle

Trudeau may be a charismatic and friendly man but he has also proven to be foolish, naïve, a liar, a bully, and a cheater, not to mention an elitist, without a clue how most of us live.  Average citizens with those characteristics would lose their jobs!

So, what’s the purpose of this rant? Not to sway your vote in this specific political battle.  To warn you to think long and hard about how you want this wonderful country of ours to move forward.  No one political party will (now or ever) tick off all the right boxes for the issues at stake.  Individual voters have to decide which party ticks off the most and the most important (to us) of these boxes, then vote accordingly.

I have not even touched on the other important issues that divide the political parties.  In addition to the budget and fiscal deficits, each party has its own stance on climate change, oil pipelines, abortion, gun control, health care, same-sex marriage, child care, education, immigration, indigenous rights, and more.  The list goes on and on, be sure to read up on these crucial issues before you vote.

Of course, there are the outrageous campaign promises flying around too in the political battle. Are reduced cell phone rates really a life necessity? Or just another calculated attempt to grab votes from the younger, phone-obsessed generation?  Just like legalizing marijuana was in the last election.  After all, most of the voters thinking cell phones and marijuana are important issues don’t yet pay the exorbitant taxes or hydro and electricity rates the rest of us are mandated to.

Political Mud Slinging and Fake News

There is so much desperate political garbage and yes, fake news, on every form of social media these days.  I am sick of it. It’s only going to get worse within the next few weeks though. Until the election is over, it will build up to a frenzied pitch.  Ignore the mudslinging on social media. Research what each party stands for yourself. Learn the issues. Peruse a few sites. Remember though, all of them have the potential to be biased!

The last one compares the platforms for each political party, sorted by specific issues.  I found it very informative.  Do your homework before you vote blindly. Please!