Student loans program needs $149.5 million

UPDATED: Cash needed to pay for unrecoverable loans in default.

A spike in default rates is contributing to a shortfall for the Canada Student Loan Program. According to budget figures released earlier this week, 2010 brought an extra the government is writing off 60,000 loans that are in are default that were not planned for. As a result, a $149.5 million hole has been left in the program’s budget. Canadian Federation of Student’s chair David Molenhuis told the Canadian Press that the higher than expected default rate can be attributed to higher tuition fees. “We’ve sounded several alarm bells,” he said. Human Resources Minister Diane Finley’s office disputes that claim. Spokesperson Ryan Sparrow says the default rates stem from loans going back at least seven years and cannot be blamed on current tuition rates. “As a result of the actions of our Conservative government, students now have access to more student grants than at any time in Canadian history,” he said.

(Editor’s note: This post has been updated.)