Students at Coast Mountain College are celebrating the elimination of interest from B.C. student loans, as part of Budget 2019, that brings debt relief to approximately 200,000 people.
“Eliminating interest on B.C. student loans makes life more affordable for families and young people transitioning to the workforce,” said Ravi Kahlon, Parliamentary Secretary for Sport and Multiculturalism. “Students graduating from post-secondary institutions have been saddled with high levels of debt for too long. That’s why Budget 2019 eliminates interest on all B.C. student loans going forward.”
Kahlon attended an event in Terrace on behalf of the Province of B.C. He was joined by students at Coast Mountain College to discuss the announcement in a round-table format.
Students have advocated for interest-free loans in B.C. for many years. The elimination of interest on provincial loans levels the cost of education for everyone. Students who cannot afford to pay up front and who rely on student loans will no longer pay more for their education than those who do not need the assistance.
“Students throughout the province have been asking for years for the provincial government to make education more affordable by removing interest on B.C. student loans,” said Lenda Girard, an organizer with the Coast Mountain Student Union. “Budget 2019 is a reason to celebrate for students, as well as people still paying off student loans. Eliminating interest on B.C. loans is long overdue.”
There are 200,000 B.C. student loans representing $1.24 billion in principal outstanding. Borrowers will collectively save about $22 million in interest payments on these loans in 2019-20.
“Interest-free student loans will benefit Coast Mountain College graduates as they leave post-secondary and enter the workforce, making that transition to employment all the easier,” said Ken Burt, president of Coast Mountain College.
Not only will eliminating interest on provincial student loans benefit current and future students but the impact will be felt by borrowers who are still paying off their student loans and accruing debt.
- The announcement in Budget 2019 to eliminate interest on B.C. government student loans comes after years of advocacy by student groups throughout the province, including the BC Alliance of Students and the BC Federation of Students.
- B.C. student loans stopped accumulating interest, effective Feb. 19, 2019.
- The role of the students’ union is to provide a common voice for students’ concerns at Coast Mountain College. The union can assist students in working together for the goal of a high-quality, accessible, publicly funded post-secondary education and to provide services that enrich the lives of individual students.
- StudentAid BC delivers the Canada-British Columbia integrated student financial assistance program. The federal government sets the interest rate for the federal component. Interest on the federal loan remains prime plus 2.5%. Integrated loans are based on a 60/40 split between federal and provincial funding, respectively.
- The student loan interest rate in B.C. had been prime plus 2.5% since 1996-97. Government first reduced interest from prime plus 2.5% to prime on Aug. 1, 2017.
- A typical undergraduate borrower has $11,200 in B.C. student loan debt, and $28,000 in total student loan debt, including both federal and provincial loans. Eliminating interest on the provincial debt will save this borrower $2,300 over the 10-year repayment period.
- The 200,000 B.C. student loans include about 55,000 people in study, about 120,000 people in repayment and about 25,000 people in default.
B.C. Budget 2019: www.bcbudget.gov.bc.ca/2019/