This article was originally published in the Edmonton Journal on September 18, 2010
By Elise Stolte
EDMONTON — Growing student debt has Alberta university students lobbying for three changes — kill the education tax credits, reinvest in grants and let students volunteer at not-for-profits to pay off what they owe.
But the move to kill the tax credit could cost parents of undergraduate students about $1,000 a year extra in taxes.Members of the Council of Alberta University Students say tax credits aren’t an efficient way to encourage people to continue their education. Not enough students realize the credits are available, they say, and the $110 million tax credits cost the government could be better used to replace the money cut from grants given to low-income students in the last provincial budget.
“We have a limited amount of money, and this isn’t where we should be using it,” said Aden Murphy, vice-president external for the Students’ Union at the University of Alberta. “My primary concern isn’t for the parents who use it now, it’s for the students who aren’t coming to university because they don’t have the money.”
But not all students support cancelling the tax credit. While most undergraduate students can’t use the credit themselves until they graduate and start earning money, students in graduate school, some co-op programs of apprenticeships can use the credit.
Plus, under the current rules, students can transfer the tuition tax credits to parents, a spouse or grandparents. The provincial tax credit is worth about $1,000 a year.
“I believe it encourages people to go,” said Danielle Doucette, a second year bachelor of science student at Grant MacEwan University. Her parents help her pay for school, and they definitely know about the tax credit, she said. “My parents’ goal is to stay debt free.”
The average debt for a student finishing an undergraduate degree in Alberta is about $24,000, which student leaders say often keeps the borrower from buying a house or starting a family for years after graduation. The debt can also limit the type of job a graduate can take, sometimes ruling out lower paying positions at not-for-profits.
The proposal to credit students’ volunteer hours toward debt reduction comes from the Alberta Students’ Executive Council, which represents students at MacEwan, NAIT and other similar institutions. They call it Volunteer to be Debt Free and will be promoting the plan at campuses around Alberta this fall.The group is proposing that for every 100 hours a student volunteers at a registered not-for-profit agency $500 would be knocked off their debt, and $2,000 would be forgiven for every 300 hours.
While the details still need to be worked out with the provincial student financial assistance department, the proposal would let students work off their debt while giving back to the community and gaining career-related skills. Both the tax credit and volunteer proposals were given to Advanced Education Minister Doug Horner for consideration before the next provincial budget. Horner was travelling in Europe and unavailable for comment this week, but a spokeswoman for the department said the proposals are under review.
Cheryl Smith, a first-year student at MacEwan who wants to go into social work, loved the volunteering idea. She already volunteers Sundays at Kids Cottage about 25 hours a month, depending on how much homework she has. “It would be cool if that helped toward school,” she said. Smith’s mother pays her tuition with help from a federal registered education savings plan. “She’s a single mom so she’s been saving since she’s had me and my brother,” Smith said. “My mom’s struggling as it is.”
The students are also asking the province to increase base funding for post-secondary institutions by five per cent. The province is currently projecting a funding freeze.Students are hopeful the freeze could be lifted, said Duncan Wojtaszek, executive director for the council representing students at research institutions.“There does seem to be a feeling within the halls of government that the recession is coming to an end. As well, we can read a calendar; we know the election is not too far away. We think we’re making a good case.”