The federal government has vowed to eliminate federal student loan interest for the 2021/22 year.
Announced yesterday in Finance Minister Chrystia Freeland’s fall economic update, the move will cost Ottawa $329.4 million and will affect up to 1.4 million students.
This will affect the federal portion of post-secondary and apprenticeship loans.
As the Liberals continue COVID-19 stimulus spending, they forecast a $381.6-billion deficit by the end of March 2021.
The economic statement also outlines an increase in Canada Summer Jobs funding. The government plans to support up to 120,000 jobs in 2021/22 with $447.5 million in new investments in the program.
“This investment will support employers by helping reduce staffing costs and will be used to extend by one year program flexibilities introduced in 2020-21, including the ability to hire youth outside of the summer months,” the report states.
Additionally, the government will invest $575.3 million over the next two years in the Youth Employment and Skills Strategy, claiming it will provide over 45,000 job placements.
BC had eliminated interest on the provincial portion of student loans in February 2019.
The AMS supports the federal government’s plans.
“This provisional removal of interest rates relieves some of the extraordinary financial burden on recent graduates as they enter this recovering economy,” said Kalith Nanayakkara, AMS VP external.
“Investing in students today is an investment into Canada’s future economic growth and recovery.”