Partial Relief on Student Debt
In February 2017, BC Budget 2017 announced a reduction in interest charged on student loans. After years of rising tuition fees and record levels of student debt, students and their families will finally feel some relief moving forward.
After years of campaigning with over 20, 000 postcards signed and 18 presentations, government has listened to the call and took steps toward mitigating growing student debt. The reduction will not only help current and future students, but also those who have completed their studies and are struggling to make loan payments.
Budget 2017 limits interest charged on student loans to the prime rate of interest; the existing interest rate ranges from prime plus 2.5% to prime plus 5%. Currently BC charges the highest rate of interest on student loans, and this change will move the province to closer to the national average. Government estimates suggest this change will produce annual savings to students and families of $17 million a year.
Though students are pleased with the government’s action on interest rates, the move falls short of what is needed. The BCFS’ Squash the Squeeze campaign has sought student debt relief since its launch in 2014, focusing on the elimination of interest on student loans, and the creation of needs-based grants.