New Brunswick will ‘improve’ collection of unpaid student debt to increase revenue: finance minister

Hundreds of students from across New Brunswick rallied outside the Legislative Assembly on Tuesday as the Liberal government tabled a budget that many expected to contain dramatic post-secondary education cuts.

In fact, Premier Susan Holt’s budget avoided heavy cuts, but while spending on universities increased on paper, it fell short of inflation.

Meanwhile, the government indicated in meetings with student and faculty union leaders that it will seek budget cuts starting next year.

The Liberals now face the political fallout of projected multibillion dollar deficits, after reversing an election pledge to balance the budget in every year of their mandate.

On Tuesday, the finance minister also signalled that he will attempt to ratchet up the collection of unpaid student loans.

Hundreds rally against cuts in Fredericton

An estimated 500 people were in attendance for a rally outside the legislature on Tuesday, with students booing and heckling politicians leaving the legislature grounds following the budget speech.

“It’s important for us that they see all the students that are out here today and understand that [cutting university budgets] is not acceptable,” said Emma Raphaelle, president of FÉCUM, representing students at the main campus of l’Université de Moncton.

Student leaders from l’Université de Moncton alone mobilized roughly 200 students from the university’s three campuses, including 100 from Moncton, 50 from Shippagan, and 50 from Edmundston, according to Raphaelle.

Among them were about 100 international students, a group typically overlooked by politicians in New Brunswick, despite economic contributions worth hundreds of millions of dollars annually, said social work student Jovial Orlachi Osundu.

“It’s important for the politicians and the stakeholders to see, even though they do not consider us, that these topics matters to us,” said Orlachi, who is originally from Nigeria.

University grants fall short of inflation

The province spent $546.15 million last year on post-secondary education. This year’s budget increases that amount by 1.62 per cent to reach $554.97 million.

That falls below last year’s rate of inflation: the Consumer Price Index rose by 2.1 per cent on an annual average basis in 2025, according to Statistics Canada.

Grants to public universities accounted for the largest part of the post-secondary budget, at roughly $307.7 million. That amount grew by about 1.7 per cent from $302.5 million last year.

On the other hand, New Brunswick Community College saw a more substantial increase of 5.54 per cent to reach $133.7 million, compared to $126.69 million in last year’s budget.

Premier Holt had previously asked all departments to identify budget cuts worth 10 per cent of their total expenses, but those measures didn’t materialize.

A set of proposed austerity measures, such as privatizing Mount Allison University and shuttering Saint Thomas University, generated significant public backlash in recent weeks. Those ideas were later walked back by Premier Holt.

However, the Department of Post-Secondary Education told faculty union leaders earlier on Tuesday that next year’s budget will involve cuts, according to Jean Sauvageau, president of the Federation of New Brunswick Faculty Associations (FNBFA).

With the government projecting about six billion dollars in deficit spending over the next three years, “the table is set for some frank discussions,” he said.

Public universities have seen a gradual erosion of government support across Canada going back almost half a century, according to the FNBFA.

In New Brunswick, public support peaked in 1979-80, when the government shouldered about 82 per cent of total operating costs, a figure that had declined to 56 per cent by 2019-20.

Those neoliberal economic trends have led to rising tuition fees and a heavy debt load for graduates.

Province to ‘improve’ student debt collection

Speaking in the Legislative Assembly, Minister of Finance René Legacy indicated that the province will attempt to recover millions of dollars in student loans that are currently in default.

“We will improve collection of money already owed to the province, including within the student loan portfolio,” Legacy said in his budget speech.

The provincial government had previously floated the idea of pursuing small-time debtors owing money from student loans and medical bills, euphemistically describing those measures as “opportunities” in a pre-budget discussion paper.

“There are opportunities to improve how money owed to the province is collected, particularly within the student loan portfolio, where more than $125 million is currently in default, while also strengthening the recovery of fees related to government services such as hospital stays for medically discharged patients,” the discussion paper stated.

It’s unclear what that will mean in practice. The paper, titled “Difficult Decisions,” stated that policy options “could include tightening collection processes, standardizing follow-up, and expanding the use of flexible payment plans so individuals can repay what they owe in a manageable way.”

Sauvageau pointed to research from the Canadian Centre for Policy Alternatives showing that student debt is disproportionately held by low-wealth students who ultimately accumulate less wealth over their lifetimes.

“Debt upon graduation has a tremendous downward pull financially on people for the remainder of their life,” he said.

Despite that grim outlook, New Brunswick’s student movement appears to have “taken stock” of the situation, he said.

A long line of students queued up to speak at the microphone during Tuesday’s energetic rally.

“Students organized the rally, they led it, they took charge on the spot, and they held the microphone all the way through,” he said. “I didn’t see too many profs speaking, but I heard a lot of students.”

Tracy Glynn contributed reporting from Fredericton.

David Gordon Koch is a journalist with the NB Media Co-op based in Moncton. This reporting has been made possible in part by the Government of Canada, via the Local Journalism Initiative.