The Government of Canada eliminated the accumulation of interest on all Canada student Loans. According to Alberta Student Aid, Canada student loans used the prime rate of Canadian banks for its floating rate and prime rate. The floating rate being 6.7 per cent and the fixed rate being 8.7 per cent respectively. The change affects every loan taken out through Canada Student loans including those already being paid. The change does not remove any interest already accumulated.
It’s just a wall blocking opportunity basically,” said Augustin Bellard, student at University of Calgary “If you're not well off and you have to take loans, you're going to be paying off those loans for a very long time.” According to a paper published by the National Bureau of Economic Research, after eight years of repayment 60.5 per cent of student loans were fully repaid. The paper states that the average time to repay debt in Canada is 9.5 years. The fraction of those entering into Canada’s Repayment Assistance Plan (RAP) in the first year of repayment was 24.8 per cent.
“I just don't think it's encouraging or helpful for students coming out of school and starting in the workplace,” Said Brett Pinter, financial advisor for Scotiabank “Especially with inflation and the high cost of living in this country.” According to StatsCan, the average debt owed for all levels of study is $ 24,000 CAD at graduation. The average debt for students studying for Bachelor’s degrees is $ 25,000 CAD.
