A new federal government actuarial report on the Canada Student Loans Program shows that the $15 billion legal limit for outstanding federal student loans will be reached and surpassed as early as January 2013 as a result of sharply rising tuition fees.

The government raised the national student loans debt ceiling by $10 billion in 2000.

The current trajectory of federal student loans does not include the roughly $5 billion in provincial student loan debt, nor other personal debts used to fund post-secondary education such as credit cards, lines of credit, bank loans or family loans. It also does not include interest.

Some action needs to be taken before the student loan bubble bursts, says the Canadian Federation of Students, which wants a new plan from the government to deal with rising inequities in access to post-secondary education and socioeconomic disparities.

“With mounting costs and a lack of a federal vision for post-secon­dary education, Canada risks bankrupting a generation,” said CFS national chairperson Roxanne Du­bois. “If the government allows this breach to occur, student loans will either dry up, or the federal government will violate what is effectively the law.”

With students more and more reliant on financial assistance to pay their tuition bills, “the only way forward is for the government to respect the cap and start to convert some student loans to grants,” Dubois said. “Time is running out for the federal government to listen to students and get serious about rising student debt.”

Average tuition fees for undergraduate students have ballooned by more than 300 per cent over the last 20 years. Students entering professional programs have seen even steeper increases.

The audit of the loan program released last month shows that for every dollar the federal government provides in non-repayable assistance, approximately four dollars are issued as loans that have to be repaid with interest.

Taking into account inflation and increased enrollment, funding for post-secondary education still falls well short of federal transfers in the early 1990s. CAUT and CFS have called for increases to restore post-secondary education funding to 1992–1993 levels, adjusted for inflation and population growth.