Why Is The Canadian Student Loans Program Insane?

One of the closest friends has recently been put through the ringer by the Canadian Student Loans Centre, and although this is far from the only saga of incompetence I have heard in relation to that bureaucratic boondoggle this one takes the cake.  Before I get into specifics about what happened and some lessons I’ve learned in dealing with the student loans system I should point out that I think student loans are a great tool that has gotten sort of a bad rap.  I simply cannot understand how such a simple loan service can get so unbelievably screwed up on such a consistent basis.  It is one of the most perfect examples of administrative incompetence I have ever encountered in my life.  It bears reiterating that this story is only the latest I’ve heard, but it has been preceded by countless others that testify to the atrocity that is this program that is supposed to support the leaders of tomorrow!

So here is the point form version of my friend’s (hereby referred to as Student A) most recent experience.  Keep in mind this person has dealt with student loans for four years, so they know and are prepared for a modicum of disorganization and frustration, but finally snapped after enduring and insane level of sheer incompetence and stupidity.

• Student A applied online for loans in Manitoba two days after applications began (early July) to be taken in (knowing the zaniness that can accompany the process and trying to plan for delays).  Many might have been frustrated by all the information needed on the application, but since this wasn’t A’s first rodeo they were patient and had everything needed.

• Student A rejoiced as the online application came back much quicker than expected with the assessed need details that seemed reasonable and a specific timeline for when the money would be automatically deposited into the specified bank account that had been asked for.

Note: In Manitoba, information is collected and used to process both provincial and federal student loans.

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  Early August Student A calls Manitoba student loans and is informed that all their forms are handed in and have been processed and their money should be coming any day.  Even after asking several times if there is ANYTHING else that might be needed they are reassured that everything is checked off on the computer screen in front of them and that all is right in the world.

• Three weeks and $0 later Student A calls back in to Manitoba student loans and is informed that the money can’t be released because due to provincial student loans from Ontario not having their requirement of proof of registration met.  While this is mildly frustrating considering the call three weeks ago, it is understandable since the situation of starting your education as a resident of Ontario, and then becoming a resident of Manitoba is a little unique.  Paperwork is taken care of with express mail.

• Second week of September rolls around and still no money.  After being tossed around 4 different call desks, Student A finally talks to someone who tells them that money can’t get released because they are still processing the OSAP paper.

• Third week of September, an hour of waiting on the phone later and National Student Loans says that because of $0.18 interest that has accrued between the initial processing of the loan application and the registering by OSAP of proof of registration, nothing could be released until permission was given to take 18 cents off of the loan.  After giving permission Student A is told that this will take 4-8 business days to process.  Student A is now fairly upset at the fact that checking a box and paying $0.18 will take two weeks in an age where paypal has made monetary wait time irrelevant, but they hang on their sanity.

• Student A was not able to save a ton of money over the summer due to a tough student employment sector, and after paying residence and tuition fees (in order to avoid late charges) Student A didn’t have much money left and had to delve into a LOC even though they hate paying interest.  This should have been no big deal seeing as how a sizeable chunk of money was coming their way from student loans.

• -First week of October Student A calls back to the National Student Loans Centre is rudely told that they are very busy this time of the year (duh), and that there is no notes on their file, everything was good to go except another few cent of interest has accrued… and this time for some reason it needed to paid through the associated financial institution as the account they wanted the direct deposit to go into.  So one stop at an RBC later and Student A got to witness an astounded bank teller shaking her head at what she was hearing on the other end.  Needless to say, this twelve cents was going to take several business days to process.

• Two weeks later, still no money.  Student A again calls the National Student Loans Centre, and this time unbelievably finds out that due to a type on her program end day from the end of April to the end of May (what university program gets out at the end of May?!!) the student loans crew would have to talk to the associated educational institution.  This is so utterly moronic I don’t even know where to begin, and neither did Student A of course.  Student A was so dejected they called the financial aid office at their university.  Oddly enough, a light must have shone down from the heavens because an angel answered the other end of the phone and actually stated they would take care of it.  Five minutes later the angel dressed in secretary clothing called back to say they had called the National Student Loans Centre and taken care of it.  Yay!

• Three hours later Student A calls the student loans people again (this might sound paranoid, but keep in my mind the experiences so far) only to find out that while there is a note on the file that says Brandon was called, there is note that says what they were called about or anything confirming the program that Student A is in.  Does this many screw ups over one simple-to-calculate loan even seem possible?  It is actually completely mind-boggling.  At this point Student A took the advice of several of their friends (including yours truly) and got a manager on the line, politely asked for her number and then threatened to go public with that name, and/or bring it to the attention of their MLA and media if something was not immediately.  Of course things got done in a hurry at this point.  Student A now has a name to hold accountable so my guess is they will get their student loan safe and secure in their bank account in under 72 hours.

My friend feels terrible about how they had to act in order to make any headway with the latest call, but I have heard so many times that the only way to get anything done within that specific government agency is to threaten someone’s livelihood.  There is nothing other than that which will get anyone’s attention because there are no other options for people to go to.  Naturally no competition means no accountability and an absolutely terrible program.  Maybe there is something we could do to make the process simpler, but to me it’s a fairly straightforward process that should be incredibly easy to navigate when you compare it to some of the other online activities that people do these days.

Due to the unreasonably high volume of screw ups at the National Student Loans Centre, please stay on the line for two forthcoming articles that will detail the thought process and decision flow chart of the average front line student loan employee. For the third act of the series, an actual step-by-step guide will highlight what you need to do in order to ensure that your reasonable request for help with your educational journey gets taken seriously.

Have you ever tried to get student loans?  Maybe you’ve experience similar incompetence somewhere else in life?