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The ity of student loans

  

it's that time again. Time to start thinking
about how to pay for your tuition and living
expenses next year. According to Michael

BC administers all loans issued within the
province. Even though the federal govern-
ment issues a minimum of 60% of your loan,
all loan decisions are made at the provincial
level. The province decides who gets money
and who doesn’t, but it is the bank that is the
actual lender. The present student loan
system operates under a “risk shared”
agreement, whereby the government does
the assessing and the bank assumes the risk.
Most students receiving student loans are
considered “high risk” borrowers—people
the bank normally wouldn't even consider
lending money to. The government act as
your co-signer, and guarantees your loan
only while you are in school. All loans dated
before August 1, 1995 will still be guaranteed
by government until the full amount is
repaid.

There are three basic kinds of credit:

revolving credit—credit cards;

of the Ministry of Skills, Training and Labour,
“most students don't know what they're
getting themselves into” when they sign on
the dotted line. So here it is. Everything you
don’t really want to know, but need to know,

before you mortgage your life away.

installment loans—a set amount of bor-
rowed money with set terms of repayment
and interest;

open loans—a loan you can add to.

 

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While you are attending school, your loan
is considered an open loan. When you leave
school, your loan becomes an installment
loan.

The BC Student Assistance Program
(BCSAP) offers a combination of repayable
loans as well as some non-repayable assist-
ance. In 1996/97 approximately 48 000
students received Canadian Student Loans
(CSL), and were approved to borrow
approximately $209-million from contracted
banks. Approximately 39 100 students were
eligible for BC Student Loans (BCSL) and
borrowed a further $111-million. The risk
premium government paid to banks was
estimated at $5.6-million.

BCSAP also offers the following non-
repayable programs aside from loans:

BC GRANT is awarded to students whose
assessed need is greater than $105/wk
during their first two years of study. In
1996/97, 13 950 students were awarded
around $42.5-million.

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