It is clear that Shumacker obtain an equitable benefit from her education. Her future earning capacity arises from this education provided she remains in this profession. However, think of how the theory of equiable benefit can be applied. What about utilities? A debtor obtains a benefit from the provision of heat during the winter and in some instances could die if it was not available. Would a debtor declaring bankrutpcy on his / her heating bill become subject to a conditional discharge upon the payment of that debt?

With all due respect, the BIA must be objective rather than subjective. Subjective decisions are based as much on emotion or a presumption of fairness rather on a simple rule. One judge may rule that this student loan is discharged another that it is. The bankrupt made a decision to make her assignment based on the objectivity of the law. Had she been told that there was a chance that a judge could make a decision that the non government loan was not subject to discharge, she might have made a consumer proposal or offered a settlement to her employer. In the case of a consumer proposal accepted by her creditors, it is most likely it would have been sufficiently less than 90 percent of what she owed her former employer. Her employer would have had to accpet whatever the dividend of the proposal was if it were accepted by the majority of her other creditors. How can trustees properly counsel their clients if juidges disregard the act on a subjective basis.

The extention of credit is a risk based process. A gun was not put to the former employers head to grant the loan. The employer chose to lend the emloyee money to take a course on condition that the employee remain her employ for three years. The employer knew or should have known that the employee might find themselves in circumstances where they might leave prior to the end of the 3 year period. This was a factor in determining whether to grant the loan. The risk did not pay off rather than accept the consequences they got a judge to let them off the hook. What if every creditor with some type of security that they could not exercise upon went to court? A person loans a person $2000.00 secured by an old car. The car has no collision or comprehensive coverage. The car is stolen. The borrower goes bankrupt. The lender goes running to a judge to say that the debt should not be discharged because the lender cannot exercise their rights against the stolen car. The judge agrees and says the debt is not subject to discharge. I don’t see much difference between this conclusion and the one made by the judge above. If you cannot afford to lose the money, don’t lend it. There was no consideration in the above case for the benefit the employer received while the worker worked there. If the oucome of the case were propoertional to the period she worked there, the outcome might be more patelable. What if the employee had struggled throught the 3 years and left a week to soon by miscalculation. The judges decision could have been the same.

With all due respect, I think she made a mistake. It would be intersting to see what the outcome of an appeal would have been.

Getting back to the student loan question: The law creates the framework. Judges should make decisions within that framework. They should not be allowed to change the law the parliment established. This is what this judge did.

I would like to respectfully correct some of the information outlined in the article above.

To begin with, the Coalition for Student Loan Fairness does not, as suggested above, “maintain” or otherwise make unsubstantiated claims - the figures we provide to the public are actually those given to us by the feds in the form of Access to Information Requests. Therefore, when we outline, for example, that there has been a 77 percent increase in student loan Revision of Terms (ROTs), these are the actual figures the government has confirmed. ROTs are arguably the best indication that students are desperate to avoid defaulting on loans. Of course, no borrower would voluntarily elect to pay thousands more in interest by extending their repayment periods on student loans unless they needed to lower their monthly payments to avoid default.

Perhaps most importantly, the Canadian public must be made aware of the fact that we are collectively paying the highest interest rates on student loans in the industrialized world.

There is no “complexity” here: the United States, the UK, France, Germany, New Zealand, Australia, and many other countries, charge between 0 and 4 percent on student loans in repayment. Many of these countries also avoid charging interest on loans while students are in-study. So, the argument that Canadians should pay through the nose when in repayment is without merit. But even if this cost was factored in, the data (available on the federal government’s Treasury Board website: http://www.tbs-sct.gc.ca/rpp/0708/hrsdc-rhdsc/hrsdc-rhdsc06-eng.asp#csl) shows that the total cost of in-study interest is FAR less than it makes in interest revenues on loans in repayment.

The feds will generate $500 million in interest revenue annually as of 2009/2010, with revenues reaching over $483 million last year according to a new ATIP request we recently filed. Now, if the student loan system is, in effect, user-pay, then the government MUST convey this to borrowers and the general public. At this time, the student loan system is not a government social program, but rather a badly run and poorly organized maze of policy approaches privileging certain target groups over others.

Check out our website for more information and documents on this matter:

http://www.studentloanfairness.ca