The Federal government’s 2021 Budget has students celebrating a $5.7 billion investment in young people. The Budget contains an extension of interest accrual waiver on Canada Student Loans until May 31, 2023 and an additional two years of increased funding for non-repayable grants.

“Young Canadians have been among the hardest hit with the economic slowdown caused by the COVID–19 pandemic, so we applaud the investments made today,” said Tanysha Klassen, Chairperson of the BC Federation of Students (BCFS). “However, this pandemic has only brought to the surface the student debt crisis that has been growing for years.”

Budget 2021 has allocated funds that will extend the suspension of interest accrual on Canada Student Loans and Canada Apprentice Loans until March 2023. Previous to this, the government committed to a one-year suspension of interest accrual for the 2021-22 year. Additionally, the budget doubles the funding for the Canada Student Grants program until the end of July 2023. This means that full-time students could receive up to $6,000 in non-repayable financial assistance.

Over one million Canadians have a student loan from the federal government, collectively owing more than $11 billion. On average, students pay $4,000 in interest over the course of repaying their student loans, which only represents the interest charged on the federal portion of the loan. Charging interest on student loans is, in effect, a tax on those from low- and middle-income families who cannot afford to pay for their education up-front. Studies show that student debt is causing young people to put off major life events like getting married, having children, or purchasing a home; and these decisions are only exacerbated by the pandemic.

“Education is essential for the health of our economy and young people need help,” said Klassen. “This extension for interest free student loans and increased grants will help thousands over the next two years. We are calling on the Federal government to make these changes permanent.”

Post-secondary education will be a powerful economic driver, bringing post-pandemic stability to the country. Eliminating interest on student loans and increasing grants will help ensure those who need to return to school for retraining are not penalized for doing so.