Ottawa permanently eliminates student loan interest

Ottawa schedule To Making Pandemic Era Pause Permanent student loan interest put in some effort To Alleviate some of the current economic pressures on Canadian youth as the cost of living rises.

The federal government outlined plans as part of the fall financial update filed Thursday To Permanently exclusion interest in all federations student Loans and apprenticeship loans, including loans currently being repaid.

interest Fees continue to apply to the student state portion loan.

Rebecca Young, Scotiabank’s director of finance and state economics, said the move would benefit graduating students but ultimately be a relief to graduating students. interest Debt payments, not money for tuition and other post-secondary expenses.

“To put it into perspective, they are still facing increased spending across the board,” she said.

More than 1.8 million Canadian students owe a total of $20.5 billion to the federal government, based on 2019 data from the Canadian government website. loan You will have a balance of approximately $13,367 by the time you leave school.

According to, the average undergraduate tuition for the academic year as of 2022 is $6,482. To Statistics Canada, average postgraduate tuition as of 2022 is $7,053.

of liberal The government stopped accruing interest student Loans due in 2021 To The impact of the pandemic as graduates enter a unique job market.measures were taken To Expires in March.

elimination of interest It will begin on April 1, 2023, the accounting update said.

average student loan The borrower saves $410 annually as a result. loan to be interest– Free, the government said in a financial update. (student loan interest Calculated at a fixed rate of 2% plus Prime, or a floating rate equivalent to it. To prime rate. )

elimination of interest Estimates for these loans To It cost $2.7 billion over five years and $556.3 million on a rolling basis, according to the federal government.

permanent elimination of interest federal student The loan was a Liberal Party campaign promise during the last federal election.

Young said some might fear the decision would spur inflation, but the move was relatively small and contained, so it wouldn’t be a particularly strong argument. .

Ottawa graduates said they can still To Using a repayment assistance plan To pause student loan Pay it back until your annual income is over $40,000, and pay less if you earn slightly more than that.

Zero Payment Income Threshold Earlier This Week student Loan increased from $25,000 To 400,000 yen for a single person. The threshold increases based on household size.

this move To tackle student The loan comes just months after U.S. President Joe Biden announced his decision to cancel $10,000 in most cases student loan more than borrower To $20,000 for borrowers who received federal Pell grants. It received considerable backlash.

The White House announced Thursday that it has already approved 16 million applications.near To 26 million Americans applied student loan forgiveness.

Adena Ali

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