The federal government is bringing some financial relief to thousands of Canadian students facing heavy post-graduation loan payments.
As of Nov. 1, many ex-students will not have to repay their Canada Student Loans until they are earning at least $25,000 per year, Employment and Social Development Canada has announced.
The student loan program previously sought payments once borrowers began earning $20,210 a year.
The movement to give additional loan repayment relief, the ministry stated, is part of the federal government’s push to strengthen Canada’s middle class and support students who may be facing an “overwhelming burden” in their educational finances.
“As a result of this new measure, students will be better positioned to transition into the workforce after graduation,” said MaryAnn Mihychuk, the Minister of Employment, Workforce Development and Labour.
Under the Repayment Assistance Plan, borrowers can request help to manage their debt, with the possibility of reducing their monthly payments or scrapping them entirely — depending on their income level and size of family.
During the 2013-2014 school year, approximately a third of the 750,000 Canadians repaying Canada Student Loans were benefiting from provisions of the repayment assistance program.
On Aug. 1, the federal government increased the Canada Student Grant by 50 per cent, expecting to provide additional assistance to students of $1.53 billion over the next five years.
That move allowed full-time students from low-income families to receive $2,000 to $3,000 per year, students from middle-income families up $1,200 per year and students from low-income families between $1,200 to $1,800 for part-time studies.