Students across Canada applaud the Federal government’s announcement of the elimination of interest on federal student loans. This change will bring fairness, economic growth, and, most importantly, relief to thousands of Canadian students already struggling with the costs of education.
“Student activists across the country have been urging the government to take action on this for years, and we are thrilled that the government has listened to our call,” said Melissa Chirino, Chairperson of the BC Federation of Students (BCFS). “This is an important step towards mitigating student debt; it will not only help current and future students but also those who graduated who are struggling to make loan payments.”
In April 2021, the government suspended the accumulation of interest on federal student loans as a pandemic relief measure – a step welcomed by students – however, this suspension was set to expire in March 2023. The Deputy Prime Minister’s statement today on the permanent elimination of interest on student loans means that students in BC will no longer pay any interest on student loans – BC’s government took action to eliminate interest on the provincial portion of student loans in 2019.
Education-related costs such as tuition fees, textbooks, and other expenses continue to increase rapidly, forcing half of all students to take on debt to access post-secondary education. Based on the current prime rate of 5.45% interest charged on a student loan, those with $25,000 of debt upon graduation could expect to pay an additional $9,200 in interest during a 10-year repayment. Those with $40,000 could expect to pay an additional $14,800 in interest.
Student debt in BC has risen 88% since 1999, and the average student loan balance upon graduation is over $30,000. Studies show that student debt holds young people back not only professionally, but also in other important ways: because of rising debt, recent graduates in Canada are delaying major life events like getting married, buying a home, or starting a family.
“With tuition fees and the cost of living at an all-time high, eliminating interest on federal student loans relieves some of the pressure faced by those who have to borrow to access education,” said Chirino. “This is a big step forward in making education more accessible and equitable and not unfairly punishing those who cannot afford the costs of education up-front. It’s important that all Canadians have the ability to obtain the skills needed to enter or re-enter the workforce after the challenges we’ve endured throughout the pandemic.”
Join us in thanking Prime Minister Justin Trudeau and Deputy Prime Minister and Minister of Finance Crystia Freeland for this important investment in the future of Canada.
Student Advocacy Works: We Did This Together!
Through the BCFS, students have long sought student debt relief, focusing on the elimination of interest on student loans, advocating for adequate government funding, reduced tuition fees and increased funding for needs-based grants. The change announced today will further reduce financial barriers to education, helping more Canadians access the training they need to get ahead.
In 2019, the Federation launched the Knock Out Interest campaign calling on the Federal Government to eliminate interest on student loans. Over the years, students' union's across the province have worked tirelessly to put pressure on the government to take action through tabling, pledge signing, on- and off-campus events, and creating a tool allowing students to email or fax Prime Minister Justin Trudeau.
- 15,000+ postcards to Prime Minister Trudeau
- 7000+ letter to Prime Minister Trudeau
- 500+ faxes to Prime Minister Trudeau
- 100's of meetings with Government officials
- 40+ endorsements from students' unions across Canada
- Countless media interviews on the impact of interest on student loans
- Mobilised support from students, friends and families
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