Federal fiscal update reveals student loan repayments are set to continue, but interest accrual will pause next year
The future of a passed motion that proposed extending the moratorium on student loan repayments and interest accrual until May 2021 is now in doubt, according to the B.C. Federation of Students (BCFS).
According to a BCFS press release last week, the proposed moratorium would be a continuation of a previous suspension of student loan repayments that began in March and ended Sep. 30. This previous moratorium was intended to help young Canadians navigate the precarious financial situations the COVID-19 pandemic has created for many. However, the motion for continuation, which was introduced by NDP MP Heather McPherson and passed in the House of Commons Nov. 24, is not binding because it was put forward by the opposition party.
Although no Liberal MPs opposed the motion in the House, the federal government has yet to signal that they intend to implement the policy it recommends. A fiscal update released Nov. 30 made no mention of plans to revive the moratorium on repayments, and did not offer any additional aid to post-secondary students for the remainder of this year.
Notably, the update does state that interest on the repayment of the federal portion of Canada Student Loans and Canada Apprentice Loans will be paused again for the entirety of 2021, but interest will continue to accumulate until the end of 2020. As a result, some student advocacy groups, including BCFS, have made it known that they feel the current measures are offering too little, too late.
“Students and young Canadians need help now. The complete failure of the Canada Student Service Grant program and the end of the student loan repayment moratorium in September means that young Canadians are desperate for financial assistance,” said Tanysha Klassen, BCFS chairperson, in a statement.
BCFS also noted that due to other political events, post-secondary students have already been deprived of financial support this year. A media release said that over $900 million in funding that was earmarked to support students by the WE charity is being withheld as the result of a high-profile scandal involving the charity earlier this year.
According to BCFS, which represents over 170,000 students within B.C. across 15 institutions, including UFV, over one million Canadians currently have a student loan from the federal government. Additionally, recent figures from Statistics Canada show that between 2000 and 2015, approximately one in two post-secondary graduates had student debt at the time of graduation.
