In 1998, Harry Dikranian, then a law student at McGill University, was a borrower under a Student Loan Contract executed with his financial institution pursuant to the provisions of the Act respecting financial assistance for education expenses (the "Act").He realized that the Minister of Education had charged interest on his student loan during the interest exemption period under his student loan contract.
Me Dikranian, who had become a lawyer and member of our firm, authorized the firm to institute a class action against the Government of Quebec (the Minister of Education) on behalf of himself and all former student borrowers under the Act (the "Members") who were improperly charged interest on their student loans.
The class action challenged the Government's charging of additional interest, on pre-existing student loan contracts by the retroactive application of certain amendments to the Act.
The Superior Court of Quebec and the Quebec Court of Appeal both dismissed the class action. However, our firm successfully argued the case before the Supreme Court of Canada which, by a six to one majority, declared the retroactive application of the new amendments to the Act to be illegal. The Supreme Court of Canada ordered the Government to reimburse students the interest improperly charged on their student loans during the exemption period.
On December 7th, 2007, the Honourable Mr. Justice Pierre Journet of the Superior Court ordered the Government to administer the claims process via their Website.
Commencing on June 2nd, 2008, the Government will mail to all Members (approximately 80 000 persons) a personalized notice advising them of their right to file an online claim via their Website www.afe.gouv.qc.ca for a refund of the interest improperly charged.
The claims process merely requires the Member to log on to the www.afe.gouv.qc.ca website. The calculation of the claim and its acceptance are completely computerized.
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Class action on overcharging of interest on student loans - One third of former students eligible for a government refund still have not claimed their due
MONTREAL, Feb. 18 /CNW Telbec/ - Last June, the law firm of Sternthal Katznelson Montigny l.l.p. (SKM) announced their $30 million class action victory against the Quebec department of Education, Leisure and Sport concerning interest overcharges by the government on student loans. The announcement followed a ruling by The Supreme Court of Canada that some 80,000 former CEGEP and university students in the province who had contracted their loans prior to April 30, 1998 were due financial redress for the overcharges.
Today, eight months after the start of the reimbursement process (which is scheduled to end on June 1, 2009), approximately one half of the eligible students have received their refund from the government. The average refund was $500, and the highest one to date was $6,200.
Many of the 40,000 former students who have not yet claimed their refund probably don't realize how significant these payments can be," said Guy St-Germain, a partner of SKM that won the class action. "Moreover, the refund process is extremely simple; probably the simplest of any class action I've ever seen."
All that eligible candidates are requested to do is to log on to the refunds Web site at www.afe.gouv.qc.ca. No document or written proof is necessary. The amount of an individual's refund is automatically computed and, if the amount is accepted by the former student, a cheque is usually issued in less than a week. Candidates have until June 1, 2009 to make a claim.
Victory for 15,000 former students previously excluded by the government
Last summer, shortly after the reimbursement process got under way, SKM attorneys received many calls from former students complaining that the government refused to issue refunds to them because they had resumed their studies after April 30, 1998.
SKM presented a Motion in the Fall of 2008, seeking redress for these students. On January 27, the Quebec Superior Court ruled in their favour, and ordered the government to reimburse these students as well. To date, there are no statistics on the proportion of students in this group of 15,000 who have applied for their refunds.
"Our estimate is that one third of the 80,000 ex-students who can benefit from the class action victory have not yet made a claim," Mr. St-Germain said.
As well, the government does not have the current address of some 5,000 eligible former students and has no intention of undertaking any measures to ensure that this group receives notice of their eligibility.
SKM has asked the government for the 5,000 undelivered notices so that the law firm may itself initiate a search for these former sudents. The firm is still awaiting a reply.
In addition to the government's Internet address, www.afe.gouv.qc.ca , and a group has been created on Facebook : Recours collectif - Prêts étudiants/Student Loan Class Action (Quebec), where members can follow events in the case. The Quebec government may also be reached by a (toll free) telephone number at 1-866-584-3979.
Interested parties may reach Sternthal Katznelson Montigny toll free at 1-877-878-9040, or by E-mail at recourscollectif@skm.ca.