The concept of of going bankrupt is well accepted in private business and economics as a means of making a market economy work. However, when it come to student loans, this concept is not practiced in Canada. Loans entered into during one’s late teen years cannot be discharged. It is a burden that lives with you throughout your life.
Finally, the national media is starting report on this situation. People are living with debt that cannot be discharged.
It is time to rethink the student loan system in Canada. Instead of the current system, we have to move to an income-contingent repayment system that captures increased earning from post-secondary learning instead of forcing blood out of rocks.
Ideally, a future system will look to finance universities based on the increased earning that they produce from their students. A good start would be to make university presidents and other executive pensions based on the income that can be recovered from the increased earnings of their students.
