On his first day in office, President Joe Biden has extended the moratorium on student loan repayments and halted interest accrual on those loans. This decision will provide much needed debt relief to 41 million loan holders in the US. Meanwhile, Canadian borrowers continue to struggle with repayment amidst ongoing under-employment due to the pandemic.
While the USA has continued its repayment moratorium, the Canadian government ended its moratorium on September 30. The resumption of student loan payments and interest accrual has put pressure on individual borrowers at a particularly trying time.
“Charging interest on student loans is a tax on those who cannot afford to pay for their education up-front. Eliminating interest on student loans is the very least the Trudeau government could do to support young people in Canada.”
- Tanysha Klassen, BCFS Chairperson
Education-related costs such as tuition fees, textbooks, and other expenses continue to increase rapidly, forcing half of all students to take on debt in order to access post-secondary education. Student debt in Canada has increased 78% since 1999, and the average student loan balance upon graduation is over $30,000; based on the current prime rate, interest charged on just the federal portion of an average student loans adds over $4,000 during a 10-year repayment.
“Young Canadians have been amongst the hardest hit with the economic slowdown caused by the COVID–19 pandemic,” said Tanysha Klassen, Chairperson of the BC Federation of Students (BCFS). “Economic recovery will take several years; to support recent and future graduates, the federal government should permanently eliminate interest charged on student loans.”
Post-secondary education will be a powerful driver that will bring post-pandemic stability to the country. Eliminating interest on student loans would help ensure those who need to return to school for retraining to restart our economy are not penalized for doing so. The BCFS’ campaign Knock Out Interest calls on the federal government to eliminate interest on student loans. The campaign has been endorsed by 39 students’ unions representing over 500,000 students across Canada. More Information about the Knock Out Interest campaign can be found at www.KnockOutInterest.ca.
Do you like this page?