Canadian Student Loans Are Getting A Major Change & Your Savings Could Be Sizeable
An interest-ing update for borrowers.
Students on the grass at McGill University.
Canada is easing the financial burden on post-secondary students by eliminating interest on federal student loans. Over 1.2 million recent grads are slated to benefit as of April 1, with the average borrower saving around $520 per year based on current interest rates. Additional changes to the 2023 Candian federal budget could increase student savings even more.
"Life has become more expensive for Canadians, including students and recent graduates," Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough said in a statement.
"Combined with the measures introduced in Budget 2023 this week, we are helping students and new graduates finish their studies, keep more money in their pockets and successfully transition to the workforce."
\u201cYoung Canadians need \u2013 and deserve \u2013 the very best chance at success. With #Budget2023, students will be able to access up to $14,400 for the upcoming school year to make post-secondary education more affordable across Canada.\u201d— Carla Qualtrough (@Carla Qualtrough) 1680110856
This year's budget proposal would increase Canada Student Grants by 40%, raise the interest-free Canada Student Loan limit from $210 to $300 per week of study and waive the credit screening requirement for mature students aged 22 or older who want to qualify for first-time federal student grants and loans.
The measures are aimed at helping students and new graduates complete their studies and successfully transition to the workforce without worrying about the financial burden of student loans.
"We know the pandemic has been hard on students, and we'll be there for them for as long as it takes," Qualtrough wrote in a March 29 tweet.
Removing student loan interest will cost the government an estimated $2.7B over five years and $556M ongoing.
Students are still responsible for paying any interest that may have accrued on their loan before April 1.
