November 26, 2020

Students and NDP urge return of moratorium on student loans

Students and NDP urge return of moratorium on student loans


Student groups and the federal NDP are urging the Liberal government to bring back the moratorium on Canada Student Loan payments.

The Liberals announced in March that Canadians with federal student loan debt would not have to make payments between April and September. Nor would interest on outstanding debt be accrued in that period.

However, the loan holiday for recent graduates ended at the end of September; payments and accrual of interest resumed on Oct. 1.

“Extending the interest-free moratorium on student-loan repayments could make the difference recent graduates need to get through the winter,” NDP MP Heather MacPherson said in the House of Commons earlier this week. 

On Tuesday, the House unanimously adopted a motion by MacPherson calling for the government to extend the moratorium for eight months starting from Oct. 1 of this year to May 31, 2021.

READ MORE: Foreign students start gradual return — along with their much-missed tuition

The economic downturn created by the pandemic has hit young Canadians especially hard. In May, the youth unemployment rate reached an all-time high of 29.4 per cent, according to Statistics Canada. 

Many recent graduates are under- or unemployed, particularly in the service sector, where struggling restaurants, bars, and stores have had to lay off workers or close due to lockdowns.

In a statement, Marielle Hossack, press secretary for Employment Minister Carla Qualtrough, said, “We remain committed to supporting students and ensuring youth get the experience and skills they need to succeed, and know that youth will be at the centre of our recovery as we move forward.”

Even though the Liberals didn’t oppose the NDP motion, the statement didn’t say whether the government would re-introduce the grace period.

On Thursday, NDP Leader Jagmeet Singh urged Ottawa to at least re-introduce a moratorium on interest accrued on student debt. 

Singh also wants the Liberals to meet their 2019 federal election commitment to legislate a $15 minimum wage for federally regulated workers, something he said would help 67,000 Canadians.

“There’s no reason to be charging interest on student debt,” Singh said. “When young people cannot find work, and are having a hard time finding those traditional jobs that young people often get in the service sector — because the service sector is taking such a massive hit because of the pandemic — we need to help students out again, and bring back the moratorium on the interest on student debt.”

READ MORE: Trudeau announces $9B to support students — including a new $1,250 benefit

In question period on Thursday, Qualtrough also pointed to the Repayment Assistance Plan, which allows borrowers to start repaying their loans only after they earn a minimum of $25,000 per year. The plan offers a range of options to help lower-income borrowers gradually pay their debts.

StatCan’s 2018 survey of graduates reported that half of all the post-secondary graduates in 2015 had student debts, owing an average of $24,000 upon graduation. Three years later, only a third of the students who didn’t pursue further studies had paid it off entirely.

“Students can barely pay their loans in good times,” said Brandon Rhéal Amyot, a representative of Don’t Forget Students, a campaign that’s lobbying Ottawa for more money for students and young Canadians.

“But in a time like this — with the second wave being twice as bad as the first wave, in many ways — it’s just not feasible.”

Amyot, a Lakehead University student, said many students and recent graduates were unable to find work this past summer, and now, with a second wave that’s derailed the economic recovery, their mental health is suffering, too.

Don’t Forget Students and the Canadian Federation of Students want all unspent funds from the $9-billion COVID package for students to be spent on extending the Canada Emergency Student Benefit (CESB), and to include international students.

READ MORE: Emergency benefit for students is finished — with billions left in the pot

Only $2.94 billion of CESB payments were made, from a maximum budget of $5.25 billion. Almost all funds from the $900-million Canada Student Service Grant were also left unspent, after WE Charity pulled out as the grant’s administrator amid controversy that afflicted the Liberals into the summer. Other programs in the package are ongoing.

Don’t Forget Students also wants employment insurance and the Canada Recovery Benefit to be available to new and recent graduates.

On a broader level, the campaign also says the federal and provincial governments should return to the model whereby each pays half the costs of post-secondary education in Canada.

Amyot has initiated a Commons petition for the changes, which is being sponsored by New Democrat Laurel Collins. 

“It’s about direct aid and stimulus,” Amyot said. “They have to go hand in hand if we’re going to have a recovery.”

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