New provincial budget lowers student loan interest rate

The provincial government announced with the release of the 2017/18 Provincial Budget that the BC student loan interest rate will be reduced from 2.5 per cent to the prime interest rate. By doing so, they fulfilled one of the AMS's lobbying goals concerning the budget, reducing the interest charged on student loans.

“A recent survey of students at 10 post-secondary institutions across BC ... shows that 38 per cent of students have taken out student loans. These students leave school with an average student loan burden of just over $27,000,” reads the AMS statement on the provincial budget.

“The change will help relieve part of the disproportionate burden placed on students who are unable to pay for their education up-front,” wrote AMS VP External Kathleen Simpson in an email to The Ubyssey.

This reduction in interest rates will be effective as of August 2017. The AMS’s statement specifies that the government will be streamlining the process of applying for student loans in order to make it more predictable. This desired predictability will be achieved by introducing a “fixed student contribution model” that will allow students to have jobs while enrolled in post-secondary education without worrying about a decrease in their financial assistance.

“The AMS is very pleased to see the reduction in the BC student loan interest rate, which is an important first step towards greater education affordability,” wrote Simpson in an email.

The AMS's positive reaction to the new budget stands in stark contrast to last year when they criticized the budget for failing to deliver “a clear funding and meaningful plan.”

The lowering of student loan interest rates was one of the AMS’s three main lobbying points to make post-secondary education more affordable. 

Although the other two recommendations initially made by the AMS — regarding operating grants and the U-Pass program — were not addressed in the statement released on the February 21, Simpson noted that the AMS is currently working with student associations across the Lower Mainland to commission a business case for the U-Pass program.

“This work is well underway, and I had the opportunity to travel with other student association executives last week to meet with two BC ministers who participated in the development of that business case,” wrote Simpson.

“Advocating for improved funding to post-secondary education remains a priority for the AMS and we will be looking for all BC political parties to make this a priority in the May provincial elections.”