Good news is on the way for students and graduates of post-secondary institutions.
The federal government plans to lower the interest rate of floating student loans by 2.5% and freeze interest for 6 months after students graduate from university or college.
The change is expected to help over one million students save $2,000 over the course of their loan repayment plan.
See also:
- Province developing 24/7 mental health support for post-secondary students
- Federal Budget 2019: Every Canadian will have high speed internet by 2030
Currently, when students sign up for federal loans they can choose between a variable “floating interest rates”, which is prime rate + 2.5%, or a “fixed rate” which is primate rate + 5%.
Budget 2019 will reduce these rates, lowering floating interest rates to just the prime rate, which is currently 3.95%, and the fixed rate to prime rate + 2% for the 2019-2020 fiscal year.
Additionally, interest rates will be frozen for up to 6 months once a post-secondary student graduates. Previously, there was a grace period of 6 months where students did not have to pay their student loans as they transitioned into the labour market, but interest still accumulated during this time.
Now, interest will not accrue on the loan during this half year after students have completed school.
Big changes are also in store for students with disabilities.
The cap for the Canada Student Grant for Services and Equipment for Students with Permanent Disabilities has been raised from $8,000 to $20,000 a year, and eligibility for the Severe Permanent Disability Benefit has been expanded, allowing for more Canadians to qualify for the loan.
Support for trades
With increasing demand for skilled trade workers, the federal government is working to support a high-quality apprenticeship system across the country.
The Liberal government plans on providing Skills Canada with $40 million over four years and $10 million every year after that to help encourage young people to consider careers in the skilled trades and technology industry.
The investment will help Skills Canada promote trades by hosting competitions, providing up-to-date equipment for classrooms, and adding resources for students who are looking for a career in the industry.
The government will also invest $6 million over two years into starting a national campaign that will promote trades careers to young Canadians.
“The campaign will work to change the perception around careers in the skilled trades, promoting their merits, including high demand, high wages, and continual professional development,” reads the budget.
A full look at Canada’s Budget 2019 can be found online here.
