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Mel and Tyler

Mel Lefebvre and her partner, Tyler Bonnell, both face substantial student debt – but how much will the banks make off their student loans? Photo courtesy of Mel Lefebvre

Note: This article originally appeared on OpenFile Montreal, to which this blog post linked for the full text. Since September 2012 OpenFile’s website has been “on hiatus” and the news organization shut down due to financial insolvency. Therefore, the full text of article is now posted below.

Mel Lefebvre was on the way to starting her adult life.

After finishing her undergraduate degree in environmental studies, the Montreal native took up a graduate journalism program with an eye to writing in her field and starting to pay down her student debt. Then things took a twist.

She got pregnant. Or more precisely, she got pregnant with $23,000 in student debt.

Read more: http://www.openfile.ca/montreal/story/how-much-money-do-banks-make-student-loans

“It’s really worrisome on a personal level because I’m spending most of my paycheque paying back my debt,” said Lefebvre, who is expecting her baby next January.  “How am I supposed to make savings at the same time to make sure that I can pay the debt back, and be on maternity leave where I’m going to have a lesser income?”

“It’s scary.”

Though situations at graduation differ, Lefebvre’s debt portfolio is common among students who need financial assistance to pay for their post-secondary education: a student loan, a student line of credit and a credit card.

The most recent figures from the Quebec government’s student financial assistance agency, Aide financière aux etudes (AFE), show that in the 2009-2010 school year, students or former students were paying the interest on over $1.8 billion in loans.

Lefebvre got a loan of about $12,000 for her undergraduate studies, slightly less than the average undergraduate loan of $12,923 in 2010, the year she graduated. She also got a smaller $1,000 loan for her graduate program at Concordia University, plus $5,000 each on a line of credit and a credit card.

At 31-years-old, Lefebvre represents a growing cohort in the days of precarious employment: highly educated, highly indebted.

As with all government-backed student loans in Quebec, the interest on her $12,000 loan began accumulating a month after she completed her degree. After six months, she had to start repaying it.

Lefebvre’s lender, Royal Bank, estimates that at her current repayment rate, and at 3.5 per cent annual interest, she’ll have paid back the loan seven years from now, when her child is 6 years old.

Her $5,000 line of credit is likely to take even longer to pay back since she has a 4 per cent annual interest rate and no timetable, only paying “$50 now and then,” when she can.

Although Quebec’s banks are managing hundreds of millions of dollars in student loans each, it’s difficult to determine how much money they’re making from interest payments. Canadian banks aren’t required to publish that specific information, nor does the AFE collect it.

One indirect indicator is the amount of interest the government pays on student loans while students are still in school. The loans are only guaranteed by the government, not provided by them directly, a system in place since 1966. While students are still in school, the government pays the interest on their loans, provided by the banks.

In the low-interest climate of 2010, which persists today, Quebec paid $27 million in interest on $1.6 billion in loans. That’s a rate of return of about 1.7 per cent. Applied to the $1.8 billion in loans students were paying back in 2010, the rate would translate to about $30 million in interest for the banks.

Quebec’s top three lenders in 2010 were Desjardins ($957 million), Royal Bank ($247 million) and National Bank ($221 million), as reported by the AFE.

Desjardins was by far the biggest, holding nearly 60 per cent of the loans whose interest was being payed by the government in 2010. But the bank was unwilling to comment on how much they make from student loans. Royal Bank said that they wouldn’t release the figures for competitive reasons.

National Bank provided some insight by revealing that interest from student loans represents 0.008 per cent of their annual revenue. Applied to the total revenue for 2011 noted in their annual report (nearly $4.6 billion), student loan interest revenue stands at a measly $367,360. The figure could not be confirmed.

Personal finance expert and Globe and Mail columnist Rob Carrick has been researching and writing about student finances for years. Though the banks make some money from student loans, he doesn’t think they are a “profit centre” for the banks.

“They’re doing it because it’s needed and because it’s a way of establishing financial relationships with people that they can broaden out later on once people are through schooling, and start selling them products,” said Carrick.

As with tuition, student debt is higher outside Quebec. The national average weighs in at a bloated $27,000 for undergraduates.

But when it comes to student debt in Quebec, Carrick says the “banks aren’t the bad guys.”

So who is?

“You might argue that the real villain here is the job market,” said Carrick of the apparent dearth of “career-building first jobs.” The latest national youth unemployment rate of 14.3 per cent would seem to support his argument.

While students tattooed with red squares might argue the government is to blame, Lefebvre has focused on lightening her debt load, ridding herself of her high-interest credit card debt as quickly as possible. She also tackled her small graduate studies loan before the interest began to weigh on her.

But she still carries a $15,000 burden, working two part-time jobs and freelancing on the side, her partner still completing his doctorate with his own $10,000 debt on the way. In the meantime, the two prepare for their little bundle of joy to arrive free of charge, for now.

Student loans, student debt

Source: AFE 2009-2010 annual report

2010

Quebec

Canada

Number of undergraduate students with a student loan

46,844 (41%)

58% (source)

Number of graduate students with a student loan

12,020 (66.5%)

Total value of student loans held by Quebec banks

$1.6 billion

Total value of student loans in repayment mode

$1.8 billion

$15 billion (source)

Total interest paid by government on loans of students still in school

$27 million

Average undergraduate student loan debt

$12,953

$27,000 (in 2009, source)

Average graduate student loan debt

$16,296

Montreal youth unemployment rate

13% (source)

14.3% (source)

Founder of Montreal pots and pans protest surprised by success

Hundreds of people stood at the corner of Beaubien and Christophe-Colomb in Montreal banging on their pots and pans Wednesday night to protest Quebec’s Bill 78.

“It’s a casserole frenzy here,” said François-Olivier Chené, the movement’s Montreal founder, speaking over the clamour as the crowd continued to gather near 9 p.m. – well past the 15-minute window suggested for the cookware protests.

The boisterous protests are a reaction to the Quebec government’s highly-contested Bill 78 that puts strict limits on public assembly and imposes stiff fines on protesters, among other measures aimed at putting a lid on over three months of student protests.

Read more: http://www.openfile.ca/montreal/montreal/text/founder-montreal-pots-and-pans-protest-surprised-success

Documentary:
Wasteful Thinking – The hidden world of food waste in Quebec

With the world’s population projected to hit seven billion later this  year, a stable supply of food has never been more important.

Recent spikes in food prices have set off riots around the world and  have been linked to revolutions in the Middle East and the famine  devastating the horn of Africa. Even here at home, rising food prices are making people think more  about what they eat and where it comes from.

But what people may not realize is just how much of the food we  produce is going to waste.

The documentary, Wasteful Thinking, takes a close look at the food  system in Quebec from the grocery store to the phenomenon of dumpster  diving and the growing demand at Quebec’s food banks.

Co-Produced by Judith Jacques and Tomas Urbina

Giant pile of corn meal at Greenfield Ethanol

Photo essay: Grain drain? Corn ethanol and a tour of Canada’s biggest producer

With the effects of climate change becoming more pronounced and more dangerous each year, the push for greener fuels is growing around the world.  Developers of plant-based fuels called biofuels are doing their best to be the ones to replace gasoline, but not all biofuels are as green as they seem. Some can take nearly as much fossil fuel to produce as they are supposed to replace.

Corn ethanol is what is called a first generation biofuel because it is produced from a food grain. This fact has placed it at the centre of the food vs. fuel debate that pits the nutritional needs of people around the world against the need to move away from oil as a fuel source, while exposing corn prices to volatile market forces that have many doubting the viability of corn as a long-term solution.

In Canada, one player stands above the rest: Greenfield Ethanol.  Forget the Box visited the Greenfield Ethanol plant in Varennes on Montreal’s south shore and takes you on a visual tour of the world of biofuels, from corn to ethanol.

See more photos: http://www.forgetthebox.net/corn-ethanol-visual-tour/

Shale gas protest march in Montreal

Month-long anti-shale gas march peaks in Montreal rally

If anyone thought the battle over shale gas in Quebec was finished, a wave of protest that has swept through the province washed those thoughts away in Montreal on Saturday. Organizers and supporters of the “Moratorium for a Generation” marched on the city, bringing to a crescendo a month-long trek from Rimouski in eastern Quebec and along the St-Lawrence River to downtown Montreal outside of Premier Jean Charest’s office.

“We’re asking for a 20-year moratorium on the exploration and extraction of shale gas in Quebec,” said organizer Jean-Sébastien Leduc. Twenty years is the length of a shale gas exploration land claim and of a generation, said Leduc. “We don’t want to leave a legacy of polluted water, contaminated air and noise to the next generation.”

Read more: http://www.forgetthebox.net/wave-of-protest-month-long-anti-shale-gas-march-crests-in-montreal-rally/

With Facebook and Twitter alight with news and people’s voices on the impending election, and the media reporting every last controversy it can uncover, Canadians across the country still complain that the real issues are not being tackled. But at least one issue in this campaign has its own day.

Ten days before the election, on April 22, Earth Day gives Canadians and people around the world the chance to focus on the environment. But the question is: does anyone really care?

Read more: http://www.forgetthebox.net/earth-day/

Give me a break.

That’s what students across Quebec have been telling the provincial government about tuition fees. On March 31, thousands of Quebec CEGEP and university students took to the streets in the latest of a string of protests against tuition hikes.

Okay, I get it—tuition’s going up. But even better than a break, students here could use some perspective and an Ontarian to tell them how good they have it.

Read more: http://thelinknewspaper.ca/article/1469

Human rights gone wrong

March 29, 2011

Why the Federal Government Mysteriously Cut Funding to an NGO

CIDA decides to NOT fund Kairos

CIDA decides to NOT fund Kairos

Colombia’s victims of war, the Democratic Republic of Congo’s rape victims, those displaced by climate change in Guatemala, and the people of Sudan’s new south are some of the world’s most vulnerable.

But they have something else in common: only days into the Canadian federal election campaign, it’s already clear that they’ll be some of the biggest losers.

Read more: http://thelinknewspaper.ca/article/1344

What to do when given a choice like that?  Any self-respecting non-masochist would readily choose option two: explain what is going on.  But here, as with most stories, context is everything.

Earlier that Monday (Nov. 22) I had been covering the preparations for État d’Urgence (State of Emergency), an annual event organized by the art and activism group Action Terroriste Socialement Acceptable (ATSA) or Socially Acceptable Terrorist Action.  The four-day event set up a 24-hour shelter for homeless people and provided the basics of food, shelter and medical attention.

The event’s theme was “Tout(s) Inclus,” playing on the fact that everyone was included, but also that the organizers were satirizing the idea of an all-inclusive resort.  A martini glass with a parasol was pictured on the cover of the event pamphlet and activities were to include concerts, workout sessions, haircuts and massages.

Promotional art for Etat d’Urgence

After finishing my live hit from the event site, I headed back to Concordia’s Loyola campus for a meeting and a few more hours of work.  I left for home after dark and got off the metro at around 8 p.m.  But my evening took a strange twist just as I arrived in front of my apartment.

Under the stairs that led up to the entrance of my place stood a man smoking the tail end of a cigarette, just next to the door of the ground floor apartment.  My assumption was that this was someone my neighbours knew and who was about to ring their door bell.  But as I got closer, I realized that the man had been looking through the garbage that was due to be picked up the next day.

Tall, with wavy light brown hair parted in the middle and a full complement of facial hair, the man in his late 20s or early 30s glared at me.

“You’re all smiles aren’t you.”

I hadn’t even noticed I was smiling, but after realizing it wasn’t my neighbour’s friend staring me down, the grin no doubt evaporated.  The man stepped towards me.

“I’ll give you two choices: either I smash your face in,” he said, as I tried to imagine what the next choice could possibly be.  “Or you tell me what’s going on here.”  That’s precisely what I wanted to know.

I wasn’t given time to respond.  The Heath Ledger lookalike with sandy brown hair came at me.  Exasperated, I told him I didn’t know and that I was sorry as I raised my arms to brace for a blow.  He pushed me back and swung at me, hitting my arms which I’d brought up to block my face.  I retreated as the man began yelling obscenities and charging after me.

I live on St. Hubert street, very near the corner of Ontario in the border zone between the Plateau, Montreal’s popular and trendy borough, and Ville-Marie, the downtown borough.  Around the corner from my apartment the Cheval Blanc bar and microbrewery buzzes at most hours of the day.  Trying to escape my bizarre persecution, I stumbled towards the bar, knowing that there are never fewer than two or three people smoking outside.

By this time I’d also flipped open my phone to call my girlfriend and explain why I was later than expected.  Thinking the jarring experience was over, I let my guard down.  But an instant later the man came around the corner towards me and yelling at me for calling the cops.  I quickly told my girlfriend that I was coming home, loudly enough so that my attacker would hear and know it wasn’t the police.

Instinctively I tried to ally myself with the two men smoking as the man approached. He was not deterred.  He bounded towards me, pushing and swinging fists, and I found myself calling out for help in French and English and yelling that I didn’t know the person who pursued me.  The smokers glanced sideways, didn’t move and didn’t say a word.  I can only assume fear compelled them to stay silent and do nothing.  I backed away as the man yelled at me to go home calling me a few more names for good measure.

By now, I thought I was home free and I dashed around the corner and over to the alley that led me back to the front of my building.  Halfway up the steps to my door he came around the corner and up St. Hubert.  “So that’s where you live!” he called out as he headed in my direction.  I didn’t wait.  I flew back down my steps and up the street towards Sherbrooke.

I began to feel I was in a nightmare, for only in a cruel dream had I ever been chased like this.  I walked quickly up the hill and glanced backwards.  The man was running after me.  I couldn’t believe it and I was suddenly gripped by a terrible survival instinct.  I ran.  I ran up the hill and turned sharply on Sherbrooke.  I ran to the next street and turned sharply again, being sure to look behind me as I did.  I ran wildly and broke into sweat, taking a lesser-known route back to my apartment.

I was frantic.  I called my girlfriend, explained quickly and told her I’d take the back door.  I ran into the yard, shut the gate and leaped up the metallic spiral staircase.  She had the door open as I hurtled in.  She closed it and locked it behind me.  Drenched in sweat and heart racing, I peeled off my clothes and began to explain.  With some perspective and some time between me and the incident, I’m able to write about it.

What happened was shocking, an attack with unclear motivations, but more than anything a bizarre coincidence involving a person in a socially vulnerable position.  I can only guess that mental illness played a part in the attack, but perhaps also the misinterpretation of a smile by a person who rarely receives such an expression from strangers.

This brings me back to État d’Urgence (State of Emergency).  The event is meant to bring, “street people and non-street people,” together, according to co-founder Pierre Allard, and has been doing so since 1998.  This year, however, is likely to be the last État d’Urgence because Heritage Canada has removed $40,000 of funding that is crucial to the mainly volunteer-run event.

a homeless man pictured in promotional material for the Etat d'Urgence event

Come on down…it’s a party?

Held at Place Émilie Gamelin, across the street from the Montreal bus terminal, the event gives homeless people, “a break,” as Allard put it, from not knowing where the next night will be spent or if a hot meal is in the cards.  Such living conditions are fertile ground for the development of depression and other types of mental illness.

And faced with societal pressures like high unemployment rates, a push for higher tuition fees and a drop in funding for events like État d’Urgence, there may be no choice but to fall into a life like that of the man whose path crashed into mine that November night.

Listen to Pierre Allard, co-founder of État d’Urgence, talk about what the event means and its goals:

Citizen groups in Quebec are disturbed by the provincial government’s gung-ho approach to shale gas development.

“With shale gas the government refuses to say, ‘Maybe it’s not a good idea,’ and it’s distressing because there are a lot of citizens saying, ‘Stop it!’” said Kim Cornelissen, vice-president of the Quebec Association Against Atmospheric Pollution (AQLPA), speaking before a meeting of the Council of Canadians on October 5.

Cornelissen was making a presentation in the wake of public hearings on Quebec’s shale gas development that began in early October in Saint-Hyacinthe, southeast of Montreal.  Organized by the Commission of Public Hearings on the Environment (BAPE), the meetings have garnered attention not only for the heated discussion between citizens, government and industry representatives, but because hundreds of people have been attending.

“I’ll be honest, I’m very worried,” said Cornelissen, who has also attended the meetings.  She said the BAPE is supposed to be an independent commission, but that in the case of shale gas the commission is sidestepping important questions on risks and consequences in order to move forward quickly with development.

The commission’s mandate, conferred by Pierre Arcand, minister of sustainable development, environment and parks, starts with the assumption that shale gas is a resource the province wants to explore and exploit, and this is precisely the approach that Cornelissen’s organization and other citizen groups are criticizing.

“From what we’ve seen now the president [of the commission] is quite aggressive with the public and is asking the industry to answer the questions,” said Cornelissen.  “There’s a conflict of interest that is quite big there.”

The public’s main questions pertain to the potential for long-term chemical contamination of groundwater and drinking water, since the shale gas exploration and extraction processes involve sending a high-pressure mix of water, sand and chemicals between 500 and 2000 metres underground to fracture the shale and release the natural gas.

Shale gas is characterized by multiple horizontal wells underground, whereas traditional natural gas extraction digs one well to tap into a large reservoir in one place.

Questions also remain with regard to the greenhouse gas emissions associated with drilling and the mass industrialization of rural landscapes.  Cornelissen said nearly 600 permits for exploration have already been granted for most of the territory across southern Quebec, including Montreal, Laval and all of the south shore.

And the way the hearings are being handled could cost the commission a great deal of credibility. “The BAPE is a good idea, in general, but if you pervert it in a way, then people could say, ‘Let’s get rid of the BAPE,’ and that would be a big mistake, so I hope that’s not what is intended,” said Cornelissen.

A moratorium, the central demand of citizens at the Saint-Hyacinthe hearings, has yet to be obtained, but Cornelissen said citizen groups have been learning a lot in the process.  She said that each time a stakeholder makes a move in the debate, citizens learn more about the issue, referring to a threat by the industry to sue the government over a moratorium that was quickly exposed as having no basis.

A moratorium in Quebec would follow a similar hold put on shale gas development in New York State.  Shale gas development has propagated widely across the U.S. in the past several years, with about 500,000 wells in place today in 34 states.  “Last year they were beginning to do films about it,” said Cornelissen.  “I think one of the best ways to reach people is through films and I think Gasland has done its job,” she said, referring to the documentary that chronicles the rise of shale gas in the United States and its consequences.

Though Quebec groups have learned much from the U.S. experience, Cornelissen said she is impressed at how informed people at the hearings have been and stresses that the moratorium request is not a knee-jerk reaction. “[It] is not for nothing,” said Cornelissen.  “We’re asking [the government] to stop.  Let’s see both sides of the issue.  If it’s good, great, we’ll do it.  If it’s not good we won’t.”

On October 5 the call for a moratorium received parliamentary support.  Québec Solidaire member of the national assembly Amir Khadir submitted a petition to the national assembly to enact a full moratorium on shale gas development.  The petition had early momentum and has now received over 18,000 signatures.  It remains open for signatures until December 6.

Cornelissen believes that the best thing concerned individuals can do is to sign the petition to support the moratorium.  “If everybody signs it – there are a lot municipalities asking for it, there are a lot of environmental and social groups asking for it – if everybody keeps on asking for it, they won’t have a choice but to do it.”

Sound: Listen to a shale gas report broadcast earlier this month on CKUT, 90.3 fm with reactions from the Council of Canadians and the New Brunswick Conservation Council.