B.C.’s move to eliminate interest on student loans is welcomed by student organizations now hoping the federal government will follow suit. Students are also urging B.C. to implement needs-based grants and to offer free online textbooks.
As of budget day Tuesday, interest is no longer accruing on new and existing B.C. student loans. It does not eliminate interest that accrued prior to the announcement.
Noah Berson, chairman of the Alliance of B.C. Students, called the announcement a “wonderful thing.”
“We really appreciate the B.C. government’s move on this issue and we look forward to the federal government hopefully following their lead.”
Eliminating interest on loans has been one of the organization’s key issues. Student loans are offered at both the provincial and federal levels. Federal grants for low- and middle-income students are available.
Graduating with debt is a stumbling block, Berson said. “Before you can begin to start your life, before you can begin to have kids, before you can begin to put a downpayment down on a home, anything like that, you have to begin to pay back this debt that you have,” said Berson, adding that could take 10 to 15 years.
Berson is advocating needs-based grants for students and would like the province to provide online textbooks at no cost to students. Textbooks can cost several hundred to more than a thousand dollars a year, and Berson said he has spent more than $600 per semester.
Ainsley Kerr, director of campaigns and community relations with the University of Victoria Students’ Society, is also calling for needs-based grants, but said that when it comes to eliminating interest on loans, students are “super happy.”
There is $1.24 billion in student debt outstanding in B.C., according to the Ministry of Finance.
A typical undergraduate student with a loan graduates with $11,200 in B.C. student debt. Eliminating interest would save individuals an estimated $2,300 over the life of a 10-year loan, the province said.
More than 426,000 people were enrolled in post-secondary studies in 2016-17, according to the B.C. government data. About 200,000 people have B.C. student loans, and about 50,000 new loans are approved every year under the program.
B.C. has allocated $318 million over four years to the new initiative. An initial $200-million payment will cover interest that would have been collected if interest had accrued.
“You have to wipe all that out in the first year — the money you would have accumulated — and then in the ongoing years, it’s just the cost of administrating the program of student loans,” Finance Minister Carole James said Friday.
The province has brought in certain programs with free tuition, such as one for former children in care. “We will continue looking at the other areas where we can continue to make tuition more affordable,” James said. “We know it is a pressure.”