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Rbc Sues Md Student Who Dropped Out Due To Mental Illness, Thoughts?


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it is a simple solution - in fact it is the one that scotia uses with its loans to both protect itself and indirectly students (if you are going through more than 25% a year then that is a warning sign - having an automatic pause sounds like a good idea for most).

 

The result? Every time people start talking about loans it is brought up as a negative about scotia. Even though for the vast major of people is is beyond irrelevant (take the loan, any osap, bursaries, and in many cases some help from the parents etc even though it is not really needed). Now tuition has gone up (so has the max amount though) but I used less and 1/2 of the LOC. There is a lot of wiggle room. In particular after year one I had always just tons of room on the LOC as the left over just kept accumulating (with OSAP again it was something like 90K available at the start of year 2). 

 

Still that negative - as small as it really is - is used against scotia. That affects their business - even though they have otherwise top features of their stuff. Every year there is pressure on scotia (and the others that have graduated plans like them) to change. There are market forces at play. 

 

Also the bank be all that harmed long term if you made it through the program and didn't be a doctor. You cannot discharge the debit by bankruptcy if you have the asset of the education (which is cold but the more I think about it is still kind of fair). You can pay off 170K loan given enough time even if you are not a doctor - it would be a long time but the bank would just keep at it. Not to say it wouldn't suck of course.  

 

Scotia gives me all of mine at once...are you sure this isn't an old policy?

 

edit: just read above. 

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They could screen people like with insurance to ensure you don't have a mental illness that would precipitate blowing it all on whim.  However, that would probably violate some human rights legislation.  This case could hurt the the thousands of other medical students who rely on loans if the banks were to clamp down.

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It's true that more protection for the lender means less flexibility, so borrowers would choose another bank that does not impose too many conditions.. Unless the other bank suffers so many bad loans that they rise interest rates for students. But this is not the case, actually banks compete for this business. Which is just reinforcing the point that banks, including RBC, are not on the losing end with students loans. That's why RBC's vicious action in truly exceptional case is a miss - both financially and reputationally.

Agreed. The banks are directly and indirectly benefitting from med student business to such an extent that they are offering prime or possibly better interest rates on loans. This shows the competitiveness and attractiveness of the med student market. If anything, RBC possibly just undercut its own market share with this bad publicity, which apparently the banks are fighting hard to gain with various incentives (the opportunity cost being thus far greater than the loss on a single loan).

 

The bank can set more restrictive conditions to minimize losses, but possibly lose market share. It's a business and policy decision - the policy on med students is probably centralized with little local branch discretion, so the lending branch will not be inordinately effected.

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