Federal government announces changes to student debt repayment plan

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By Keith Capstick

As of Nov. 1, students in Canada will not have to start paying back their student loans until they are making $25,000 per year.

The federal government announced on Oct. 30 that under the Repayment Assistance Plan students can request help in managing their debt in the form of reduced monthly payments or no payments at all—depending on family size and income.

With this increase to the plan the federal government will provide an additional $131.4 million in debt assistance over the next five years.

Ryerson Students’ Union (RSU) vice-president education, Victoria Morton, said this is exactly the type of change she wants to see in student aid, but would like the $25,000 threshold to be a little higher.

“It’s incredibly exciting because we’re always looking for creative solutions to equity-base aid and this is exactly that,” Morton said. “It’s also great in that it encourages students that don’t go into careers that are not directly profit-driven … it helps not deter students from wanting to take those positions right out of graduation.”

But Bilan Arte, a representative from the Canadian Federation of Students (CFS), isn’t as excited as Morton. Arte said that “this new policy is just the reframing of an existing decision the federal government already made this year in their budget.”

“It does nothing to address the concerns that we’ve brought up around access to education,” Arte said. “As a movement it comes to no surprise to have the government make an announcement like this two days before students are mass-mobilizing for free education.”

Timing aside, Arte also had strong concerns about the problems this policy doesn’t address.

“This policy does nothing to address the real cause of students debt, which is rising tuition fees across this country, “Arte said. “It does nothing to address that average student debt loads are still at $28,000 and growing … it also does nothing to address the fact that the federal government still makes a substantive profit of the interests rates that are charged on student debt. This policy does nothing to address what students are mobilizing for.”

The CFS is holding their “Fight the Fees” day of action on Nov. 2 where they hope to bring thousands of students to Queen’s Park for a rally asking the provincial government to bring free education to students.

This is the latest in what has been a nation-wide political trend to assist students’ access to education. Last year, the Ontario government announced its new tuition framework which was designed to provide free tuition to students coming from low-income households.

Canada Student Grants legislation will also be getting a boost on Aug. 1, 2017 when the programs payouts increase by 50 per cent.

Full-time students from low-income families will now be receiving $3,000 per year up from $2,000, students from middle-income families will now be receiving $1,200 up from $800 and part-time students from low-income families will get $1,800 up from $1,200.

This change to the grant program will cost the federal government $1.53 billion over five years.

“We know that tuition and related education costs can be a challenge for students,” said Ryerson President Mohamed Lachemi regarding the change in the repayment framework. “We are encouraged by and applaud the government’s commitment to shaping the future economy through investments in education, specifically for those students in the greatest need.”

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