BC students will no longer have to pay interest on their provincial student loan.
Finance Minister Carole James announced today that the BC government will eliminate all interest on provincial student loans, effective immediately. The decision follows the lead from Manitoba, Newfoundland and Labrador, Prince Edward Island and Nova Scotia.
“Instead of worrying about growing debt, young people will be able to focus on learning, and graduates will be able to put their energy into their next steps in life,” said James during today’s Budget speech.
First promised during the NDP’s campaign trail, the change was previously recommended by the BC Finance Committee in November following years of lobbying from student unions including the AMS.
The society and several others in BC argue the loan interest means that poorer students end up paying more than those parents can completely finance their education.
“The elimination of interest on student loans will have an immediate impact on students who are burdened by their debt,” said AMS VP of External Affairs Cristina Ilnitchi in a press release.
“It’s a very exciting step towards affordable post-secondary education and an important recognition from the provincial government that they must take action to alleviate the difficult financial situations students face during their studies.”
“It is rewarding to see our hard work and advocacy pay off, making education more affordable and helping recent graduates transition into the next phase of their lives,” said Chair of the Alliance of BC Students Noah Berson in a press release.
“Every student group has been asking for this for years.”
In BC, funding for student loans is provided jointly by the federal and provincial governments. Today’s decision eliminates interest on the provincial component of those loans, which were pegged at the prime rate, but does not affect interest charged on the federal part, which is prime rate plus 2.5 per cent.
The government said it would invest $318 million over the next four years to eliminate those loans, estimating that it will save students $22 million this coming year alone. Collectively, the ministry said an average undergraduate borrower will now save $2,300 in the 10 years after graduating.
But not all requests from the student unions were successful.
Despite the BC Finance Committee’s recommendation, the budget does not touch on open education resources, upfront grants or gender-based violence and sexual assault support.
“There are still many crucial investments into post-secondary student support that need to be made, especially in the creation of a robust up-front needs-based grants program,” reads the AMS’s press release.
The provincial government has made a commitment to making life in BC more affordable and to deliver better services – making university more accessible so that students who otherwise cannot afford to get a post-secondary education is an important path towards this goal.”
This article has been updated to include the AMS’s comment.