The Ontario government took a step toward easing student debt in a decision last month to scrap late-payment fees and accumulated interest for college and university students.
Beginning in the 2014-2015 school year, students no longer have to pay a deferral fee, late-payment fees or interest rates while they wait for their loans.
But the decision comes too late for some students. Farah Al, a third-year mathematics student, said she has lost her faith in the tuition system, especially OSAP.
“If this (decision) happened earlier, it would have solved a lot of problems. I would have saved thousands. I wouldn’t have taken two years off from university,” Al said.
Three years ago, a collections company notified Al that she owed about $1,000 in late charges for her student fees. She was not informed about these due payments beforehand.
“I was fumed. I was angry. I was jumping,” she said. Even worse, she discovered that due to collections, she would no longer receive OSAP funding. Financial institutions denied her any kind of student line of credit. On top of the late fees and interest collected, which Al quickly paid off, she had to come up with the upcoming year’s tuition on her own.
“My mother borrowed from the home equity. I borrowed from credit cards. I am still trying to balance it out,” she said. She eventually took the next two years off from university to work as a dental hygienist so she could save money and return to fulfilling her dream of becoming a math professor.
“I thought my future was done. That’s it. I spent many nights crying,” she said. She’s now back in her program, but also works six days a week to pay for tuition. She can’t take a full-time course load, so she makes up for the time in the summer term.
Ryerson automatically charged a $70 deferral fee to students with outstanding balances after Sept. 30. A monthly interest charge of 1.25 per cent was applied after October.
Ryerson fees and finances reports that student fees for the 2013-2014 academic year ranged from $6,576 to $9,718 This does not include interest or late fees.
Failure to make a payment, as in Al’s case, can lead to a collections block, which restricts students from further enrollment activity and receiving any official documentation from the university.
The Canadian Federation of Students says the recent change comes too late for final-year students.
“The elimination of deferral fees is a huge victory for students in Ontario. Deferral fees were a surtax on the lowest income students, often penalizing those waiting for their OSAP money,” said Anna Goldfinch, the national executive representative for the Canadian Federation of Students.
According to Goldfinch, the University of Toronto pocketed $1.8 million on late fees from students who couldn’t afford to pay their tuition up front.
“Unfortunately, thousands of students have been disadvantaged by this policy for too long,” she said.
Ryerson president Sheldon Levy says that there have been several complaints from students in the past.
“From a student’s perspective and from a parent’s perspective, it was certainly justified,” Levy said.