Post-secondary students and grads owing thousands of dollars in student loans now have a bit of reprieve, with the B.C. government eliminating interest charges, effective immediately.
Finance Minister Carole James announced $318 million during the latest budget this week, saying the province anticipates students relying on loans will save a total of $22 million in interest payments per year.
Jordan Sawchuk, a biology student at Okanagan College in Kelowna, said money otherwise used for the interest rate will make all the difference once he graduates.
“It’s going to be a lot less stress once I get out of school to rush into a job. If the market’s a little bit tough, it’s going to be a lot of pressure off of me,” he said.
“There’s absolutely more that can be done to ease the financial burden… Textbook prices are already high, but it’s a step.”
James Bahnke, a computer science student at the College, said it’s better than nothing.
“Just more money in your pocket down the road. You look at other countries and it’s terrible. I thought already it’s pretty good.”
Provincial student loans had been charged at the prime interest rate, roughly 4.5 per cent. The government estimates the average student owes $11,200 in debt upon graduation, on top of $17,000 in federal loan debt.
Going forward, students will pay roughly $2,300 less in their overall debt, based on a 10-year repayment period.
“Repaying student loans should not force people to put their lives on hold,” said Noah Berson chair of the Alliance of B.C. Students, which lobbied for the change. “After graduation, the focus should [be on] starting your life, saving to buy a home and having children, not being chained to student loan payments.”