The government is reducing the financial burden on young Canadians by providing youth with a form of financial support to complete their studies.
As of Apr.1, Canada permanently eliminated interest for Canada Student Loans and Canada Apprentice Loans under the Canada Student Financial Assistance Program. However, students are responsible for paying any interest that accumulated on their loan before Apr. 1.
“Eliminating interest on Canada Student Loans and Canada Apprentice Loans helps to reduce the financial burden of post-secondary education, ensuring that more Canadians have access to inclusive and quality education,” the government said in a news release earlier this month.
The government first announced the removal of interest on federal student loans in the 2022 Fall Economic Statement.
The recently released 2023 budget proposes to increase Canada Student Grants by 40 per cent, provide up to $4,200 for full-time students, raise the interest-free Canada Student Loan limit from $210 to $300 per week of study, as well as waive the requirement for mature students, aged 22 years or older, to undergo credit screening to qualify for federal student grants and loans for the first time.
The budget proposes enhancements to financial assistance for current students beginning on Aug.1.
“Life has become more expensive for Canadians, including students and recent graduates. That is why our government has permanently eliminated interest on Canada Student Loans and Apprentice Loans,” Carla Qualtrough, minister of employment, workforce development and disability inclusion, said in a news release.
“Combined with the measures introduced in Budget 2023 this week, we are helping students and new graduates finish their studies, keep more money in their pockets and successfully transition to the workforce,” she continued.
The student loan and interest-free changes are expected to benefit more than 1.2 million post-secondary graduates in Canada each year, according to the news release.
Based on current interest rates, the elimination will save the average student loan borrower $520 per year.
