B.C. could eliminate interest rates on student loans at a cost of $34 million a year, but the minister responsible says it wouldn't help students gain access to a post-secondary education.

Advanced Education Minister Naomi Yamamoto repeated assertions Monday that students are not asking her to reduce the interest rate government charges on student loans. That rate is prime plus 2.5 per cent, charged after a student finishes or halts post-secondary education.

"If you were to ask most of the students that I meet with, frankly, if I told them we'd reduce the interest rates down by one per cent, they can't give me a number on how much less they would be paying," Yamamoto said in an interview.

"So for me, it's not where it's best, I think, to put our efforts."

The comment brought Yamamoto a fresh round of criticism from student groups, who had slammed her during a national day of action last week for not listening to their concerns about rising tuition and debt costs.

Students do recognize the impact of interest rates on their financial future, said Zach Crispin, chairman of the B.C. branch of the Canadian Federation of Students.

"That's extremely frustrating because it shows a kind of lack of faith in students," he said. "I also think it's untrue because we've seen information that shows as debt accumulates, [students] are more likely to drop out as they see that debt rising."

Yamamoto said the province's "average" rate of borrowing is roughly the same as it charges students.

B.C.'s biggest universities have urged Yamamoto to reduce interest rates to make B.C. more competitive with post-secondary financial aid packages offered by other provinces.

In a statement, Yamamoto's ministry said such provinces as Saskatchewan and Newfoundland have not seen an improvement in student-loan default rates after reducing or eliminating interest rates.

Even if B.C. eliminated its share of the interest, 60 per cent of a student loan comes from the federal government, which would still charge its own rate, the ministry said in a statement.

An average B.C. university student graduates with $27,000 in debt from provincial and federal loans, the Canadian Federation of Students says.

Yamamoto told the Times Colonist in a Jan. 31 interview that she'd calculated the cost of lowering or eliminating interest rates and ruled out such a move. But it took her ministry seven days to provide the figures.

NDP critic Michelle Mungall said Yamamoto is consistently off the mark and offers contradictory facts and figures to justify her positions.

"She's certainly not listening to students," Mungall said.

"She's pulling facts out of what seems to be thin air."

rshaw@timescolonist.com