Photo Contribution by Olga Steblyk
Student borrowers at Wilfrid Laurier University have one less financial concern as the freeze on federal student loan interest becomes permanent beginning April 1, 2023.
The Government of Canada will suspend federal interest on new student loans, apprentice loans and ongoing loan payments. According to Statistics Canada, students will save approximately $410 per year in 2023.
Previous interest on loans will still need to be paid off.
“It really eases my anxieties a bit,” said Homirah Hussaini, a fourth-year criminology student.
She is balancing three jobs to pay for tuition, gas and car insurance.
“If I miss a payment, there’s no interest added onto those monthly payments,” she said.
Fabiana Penagos, a second-year digital media and journalism student, said the decision is helpful as, “interest creeps out of nowhere.”
Students must still pay provincial interest on loans. Hussaini said she’s nervous about the provincial loan.
“Mines around like 20 per cent,” she said.
Half of Canadian post-secondary students rely on student loans to pay tuition.
Hussaini has about $8,000 to $9,000 in loans to pay off. She is about to graduate and said her upcoming loan payments hit her “in the back of the head.”
Graduating school means having to “go to work, find somewhere else to live, maybe move away from home,” said Hussaini. Hussaini is anticipating paying off her student loans within seven to eight years.
When handling loan payments “the greatest tool a student can have is to really understand budgeting and understanding how to tackle debt,” said Necia Martins, associate registrar and student finance and client services at Laurier.
To learn about budgeting, Martins recommended programs through the National Student Loans Service Centre and Laurier’s money management program.
“Those are the tools that students should be looking at and leveraging.”
Penagos had to pause her student loan payments due to the cost of gas and living.
“The way I’m surviving is by using my savings.”
Penagos is waiting until she’s done school to pay off her student loans, which have accumulated to $5,000.
Paying off the loans is “going to be one of my biggest priorities because it also affects your credit score,” she said.
This year, the Government of Canada amended the Repayment Assistance Plan to allow people living alone to wait until they’re earning $40,000 a year before paying their student loans. Previously, the plan required Canadians to pay the loans when they made $25,000.