Debt forgiveness doesn’t make sense

By Susan Anderson, September 18 2014 —

The Wildrose Party has promised to forgive 50 per cent of student debt for graduates employed in high-demand fields in Alberta after graduating. While it’s nice to see a party working on post-secondary issues instead of squabbling like teenagers, this particular policy doesn’t make sense.

The Wildrose has yet to define high-demand jobs or specify qualifications like how long and in what capacity a student would need to be working to qualify.

The policy raises larger issues. Graduates employed in high-demand jobs don’t need debt forgiveness. If you’re guaranteed a stable and high-paying job, you don’t need an extra incentive to stay in Alberta.

The 2012-2013 Alberta Occupational Demand and Supply Outlook states that there are chronic labour shortages for the majority of occupations in Alberta. The report projects a cumulative shortage of 96,000 workers over 10 years. Degree-requiring jobs that are in high demand include mechanical, civil and petroleum engineering, information technology, medicine, nursing and retail management. The vast majority of occupations in Alberta still have a projected shortage of workers. Based off this report, almost any employed university graduate, even if it’s not in their field, would be filling a high-demand position.

Alberta isn’t experiencing a brain drain. Instead, we have a lack of skilled workers. There are complex reasons for labour shortages and underemployment. But students don’t avoid high-demand fields for fear of never paying off their student debt.

Student debt isn’t the largest barrier to going into engineering, nursing or computer science. What holds students back is the lack of seats and the quality of education.

The Schulich School of Engineering receives over 2,000 applications for 750 first-year spots. Engineering is one of the highest demand fields in Alberta. At the U of C, engineers are the least likely faculty to report that they have ever had student debt.

What engineers do need is a new building and more teaching and learning space. Construction of a new building is underway at the U of C, but it’s several years late.

The biggest problem is the disconnect between the skills employers want and the skills students have. The skills learned in university are not translating to the job market.

Most students are concerned with actually finding a job after graduation. Once you have a job in a high-demand field in Alberta, you’re golden. You’re skipping through a field of daisies. You don’t particularly need help. This policy helps the least vulnerable students.

Wildrose leader Danielle Smith announced this policy after the Council of Alberta University Students went public with the government’s plans to raise tuition in certain faculties across Alberta with market modifiers. The U of C’s Schulich School of Engineering is submitting an application. The rationale behind market modifiers is that the added value of pursuing a degree in engineering is worth the extra cost. Increasing tuition only to forgive the debt incurred is counter-intuitive and inefficient.

Wouldn’t debt-forgiveness for high-paying jobs provide incentives for students to accumulate more debt, instead of working over the summer and being frugal during the school year? It would punish families who saved to send their children to post-secondary. If a student could bet on getting a high-paying, high-demand job and also knew that the government would forgive 50 per cent of their student loans, why not rack up a bill twice as large?

This policy needs to be seen for what it is, a misguided attempt to bring student attention to the party. Wildrose policy also includes capping non-instructional fees, increasing Internet-based learning, increasing enrollment for high-demand degrees and smoothing credit transfer between Albertan institutions. Those are interesting incentives to discuss. Let’s stop focusing on plans that are unnecessary.