Student loan debt is a problem outside the U.S., too. In Canada, recent graduates are being urged to spend their new paychecks wisely. Set a budget, states a recent Toronto Sun article.

New grads often make commitments based on their gross annual salary and are shocked when they see their take-home pay. As a result, they're forced to consider supposed fiscal saviors such as payday loans online.

"Creating a budget is a tool, not a financial handcuff," says Debby Fowles of about.com financial planning guide.

Begin by taking a hard look at your discretionary spending, such as cellphone packages and expensive jeans, along with non-discretionary expenses such as food, rent and transit pass, advises Alexis Mantell of RBC Royal Bank in Toronto. Don't be tempted by a quick payday loan fix if problems arise.

"Financial planning should revolve around cash flow," Mantell says. "Determine a monthly student debt re-payment amount that will allow you to live comfortably while making a significant dent in your debt load. Synchronize your loan payment date with payday to ensure it always gets paid off the top."

Look for ways to reduce your cost of borrowing. If you're carrying a credit card balance each month, or you're short of cash and have overdraft protection on your bank account, consolidate all debt into the vehicle with the lowest rate of interest - likely a line of credit. Only consider a quick cash loan if you must. Set a goal.

"Determine a time line for completion of repayment. Set aside a small fund to reward yourself for meeting that milestone," Mantell says.

Your payment period will depend on the amount of debt outstanding and how it's negotiated. It will also have a lot to do with the type of job you possess and your living situation. A single working professional can lower balances more quickly than one who is married.

Moreover, those having difficulty making payments may be eligible for interest relief. If your application is approved, the government will pay the interest on your student loan for a period of time, possibly as long as 36 months, Mantel says. This would be another cash advance alternative.

The Conservative Canadian government is preparing to introduce legislation that would finally rein in the nation's ballooning payday lending industry.

If the government's efforts are successful, it will be delegating power to Canada's individual provinces to regulate payday advance loans and protect consumers from the financial pitfalls.

Justice Minister Vic Toews and Industry Minister Maxime Bernier are working hard, senior sources report, to introduce amendments to the Criminal Code. If at all possible, the proposed reforms will be in place by the end of the spring session of Parliament.

The bill would address concerns of citizens and consumer advocates that some firms in Canada offering short term payday loans are charging exorbitant rates of interest to consumers. Sometimes the loans entail interest of hundreds of percent each year.

The Calgary Sun reports that the payday loan industry itself has been lobbying to be regulated in order to eliminate the so-called bad apples, while allowing reasonable short-term rates. Right now, the Criminal Code sets a 60 percent annual interest rate cap on the financial sector, a bar that doesn't include instant payday loans.

To date, only one lender has been charged with violating that limit, but throughout the enormous nation, calls for payday loan reform have gained traction in recent weeks. The controversy will undoubtedly continue until this issue is resolved. We will follow this planned legislation with a great level of interest.

The debate over payday loans is not only remaining strong in Canada - it's being taken to the Manitoba legislature. On Thursday,the public weighed in on the government's proposal to regulate companies offering cash loans and cash advances.

Members of the public were free to share their opinions on the proposed Consumer Protection Amendment Act with the government's standing committee on social and economic development. The proposed law, introduced in the legislature in March, would require payday loan companies to be licensed and bonded.

Potential customers would then be warned about the high cost of the payday loan have the right to cancel a loan without penalty after 48 hours.

The legislation proposes the provincial Public Utilities Board control the fees these faxless payday loan companies are allowed to charge. Additional fees would not be allowed when payday loans are renewed, extended or replaced by a new payday advance unless these additional fees are authorized by the PUB.

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The Times has already reported on the topic of payday loans in Canada. As controversy has swirled over the use of such cash advances, other publications have weighed in on the topic. The latest is The Ottawa Citizen.

According to the paper, a Senate committee has called for more investigation into the payday loan industry, suggesting more regulation is needed.

"We believe that action is needed to ensure that consumers are not abused by (alternative financial services providers) or the fees that they charge," said the report of the Senate standing committee on banking, trade and commerce, which tabled its findings yesterday.

The report said the committee members view the growth of alternative financial services providers as "somewhat alarming, since we do not believe they are adequately regulated." Testimony was then heard from many sources on what the report referred to as "payday lending organizations," companies that make short-term payday loans that often appear to entail usurious interest rates.

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The debate over payday loans in Canada is growing stronge. The most recent entry into the fray? New Brunswick minister of justice and consumer affairs, Bruce Fitch.

He's trying to arrange a meeting with the federal justice minister to discuss changes being proposed by Ottawa, and whether provincial legislation would be required on the issue of cash loans.

Opposition Finance critic, Mike Murphy, says he's concerned that people who use a payday loan company face an average of 107 percent interest after just 10 days. Murphy says he's getting e-mails from people who have been impacted by the high interest rates.

A federal committee, according to Fitch, has been studying payday loans and he's hoping for a meeting of provincial ministers this fall. He says no fax payday loan companies should still be able to operate, but not at the expense of consumers.

Providers of payday loans insist that they provide a needed service. But Chris Robinson, Professor of Finance at York University, begs to differ.

In a study for the Association of Community Organizations for Reform Now (ACORN), he proposes a cap that could save Canadians approximately $194M annually, or about 57 percent of his estimate of recent industry revenues. Robinson predicts his proposed rate structure would drive many payday loan lenders out of existence, according to the Toronto Star.

"Their scale will be too small to survive on the lower fees," he said.Only one or two large chains would survive, Robinson predicts, although they could expand and become more profitable as a result.

Meanwhile, a cap on fees approved by the Canadian government might then encourage banks and credit unions to offer small, short-term loans in competition with payday cash advance firms. Robinson thinks that could lead to further rate reductions.

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Being charged upwards of 60 percent interest for an advance on one's paycheck is a notion Rob Fleming finds offensive.

Neverthless, the majority of cash advance establishments doing business in Greater Victoria are charging just that and then some. While the ceiling under the Criminal Code of Canada is 60 per cent interest, the added fees and finance charges tacked on to long-term payday loans make the cost of borrowing through such companies exorbitant. In essence, Fleming said, they are operating outside of the law.

"It's a situation where prosecutions are extremely unlikely, but what we've had is a free for all where people are getting gouged," the Victoria-Hillside MLA said.

In the Capital Region alone there are more than a dozen companies not attached to banks or credit unions offering such services as payday loans, injury advances, telephone reconnect loans - essentially cash in pocket for the consumer.

Last week Fleming introduced a private member's bill in the legislature that he said would lay the groundwork for the province to regulate interest rates among other conditions related to the fast payday loan industry.

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Many payday loan stores on Canada are being hit with lawsuits these days. The latest? Cash Store, Inc., which has seen an Ontario court conditionally certify a class action lawsuit against it.

The class action applies to any resident of Canada, outside British Columbia and Alberta, who got an instant cash loan from a Cash Store and who repaid the loan at the usual fee of between 22.5 and 25 per cent of the loan amount.

Rentcash said the certification was conditional on the plaintiffs giving the judge details on how the lawsuit's parties would be notified of the proceeding. In a news release, Rentcash said it would defend itself "vigorously" against the class action.

Rentcash is the only fast payday loan company in Canada that is publicly traded on the TSX. In the most recent quarter, Rentcash reported its revenues from its brokerage operations more than doubled to $31.1 million as the number of its stores also more than doubled to 332.

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The Canadian payday loan industry just keeps getting more and more turbulent. The Nova Scotia Registrar of Credit has ruled that Cash Store appears to have violated the Criminal Code by charging more than 60 percent annual interest, the bureau reported after wrapping up a six-month investigation.

The investigation resulted from a November 2005 complaint filed by William McFadden about a particular Cash Store location in Amherst, Nova Scotia. The Registrar determined that Cash Store charged borrowers a default fee (deemed an administration charge), but did not deduct the fee from the amount owed when the payday advance loan was paid on time or early.

In a March 28 letter to the company that was never made public, Registrar officials state that when all fees were calculated, the rate of interest charged to McFadden was 395.18 percent, in violation of the Criminal Code. McFadden is but one of many victims of this alleged quick cash advance over-charging.

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The British Columbia government is ready to regulate the payday loan industry. It's anxious to get started … but wants the federal government to act first.

Solicitor-General John Les told The Province that Ottawa needs to change the Criminal Code to enable B.C. to bring forward legislation.

"We are ready to go, as soon as the federal government delegates the appropriate authority," said Les. "Until that time, there is very little the province can do. Clearly, we want to tighten up the regulation of the payday loan industry so it is more transparent."

Yesterday, NDP MLA Rob Fleming (Victoria-Hillside) introduced a private member's bill into the B.C. Legislature in order to regulate the payday advance field. The Payday Lending Act sets a number of rules for the industry. It's meant to boost consumer rights.

"It is not uncommon for consumers to pay in excess of 300 percent interest on a one- or two-week [payday] loan," said Fleming."I certainly hope the Campbell government will support bill."

The proposal includes:

• A ban on the taking of security, including assignment of wages
• Plain language rules so the cash advance lender must clearly inform the borrower
• Lender to post signs setting out the cost of credit for a payday loan
• Borrowers having the right to cancel the quick cash loan within 48 hours of the first advance
• The right to a refund if the borrower was overcharged