I don’t think I need to explain to anyone reading this that paying for tuition, and for the university life in general, is an expensive feat. You pay an institution so that you can work full-time for four years, then maybe get a job that will pay you full-time to pay back the money that you spent but didn’t have. The system is a little weird, and if I were to interview a random selection of students, they might have a few colourful words to use to describe it, but maybe less so after this week. Think of this news as putting an air freshener over your trash can.
The Liberal government announced that as of November 1, 2016, students who have taken out a Canada Student Loan will not be required to pay back their debt until they’re earning at least $25 000 a year. For anyone wondering, the previous minimum earning rate to start repaying student loans was $20 210 annually. This new increase was made to help ameliorate the incredible debt load that faces post-secondary graduates as they try to join the work force. Statistics showed that an astonishing 750 000+ students were repaying debts during the 2013-14 year, with around a quarter million more students receiving repayment assistance.
The announcement also came with some other great news for students of low-income families. There is an approximately 50% increase in the size of grants that don’t need to be repaid. That means $2000 to $3000 for full-time students from low-income families, $800-$1200 for students in middle-income families, and $1200-$1800 for part-time students in low-income families. This has been predicted to increase educational grants from the government by about $1.5 billion over the next five years.
This is clearly a step in the right direction, and will have some positive results for the post-secondary graduate life in general. Some observers of the change noted that graduates may have an easier time with major life milestones, and won’t have to delay buying that car, house, or even engagement ring.
Realistically, the number can still be seen as too low to help with the interest that accumulates on student loans. When doing the math, $25 000 will net you about $1500 a month after taxes, which isn’t very much to be living properly on and to start repaying debts. While the news is good, many interviews from students didn’t see this as a fix to anything, but more so an insult to the size of debt that can be accumulated and to the students who are forced to deal with it to get an education.
This news by no means solves every student debt problem out there but it’s still going to benefit most people, even if only marginally. Hopefully it helps a good number of those graduates stressing about paying back their loans. Good thing we have co-op, eh?
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