Students in BC may soon be getting interest-free student loans from the province.
On November 15, the BC Finance Committee (BCFC) released their recommendations for the coming year’s budget, which included recommendations made during consultations with AMS VP External Cristina Ilnitchi and Policy Advisor Jason Tockman.
Highlights of the recommendations include eliminating interest on BC student loans, improving affordable housing, allocating $5 million to open textbook resources and increased funding for gender-based violence and sexual assault support.
According to Statistics Canada, 36 per cent of BC undergraduate students who graduated in 2010 carried an average of $29,000 in student debt. Of those students, 52 per cent owed more than $25,000 — well above the national average of $16,300.
Students in BC receive loans through the Canada-BC Integrated Loan Program, which means that the loans are provided in part by the federal government and in part by the provincial government.
The current interest rate on the BC portion is prime rate while the interest rate on the Canadian portion is prime rate plus 2.5 per cent for the floating rate.
The BCFC’s recommendation would mean zero per cent interest on the BC portion of the student loan, which constitutes around 40 per cent of the total sum.
For example, a student graduating with a $29,000 loan would pay an average of around $6,000 in interest on the Canadian portion and $3,000 on the BC portion over 10 years. If this budget recommendation is implemented, the student would only pay $6,000 of interest, compared to $9,000 before.
“We’re really excited to follow up in the second term … and continue to reinforce how important [these recommendations] are for students,” said Ilnitchi.
The AMS stressed during consultations that interest on student loans means penalizes students from lower-income backgrounds.
“What ends up happening is students who are taking out student loans end up paying more than their wealthier counterparts who are able to pay up front,” Ilnitchi said.
Other asks
The BCFC also recommended other measures to make education more affordable for lower and middle-income students.
Notably, they call for an increase in funding for needs-based grants.
“The promise of getting a grant at the end of their degree will not help them pay for tuition when the beginning of the year starts,” said Ilnitchi.
They also recommended an allocation of $5 million or open source textbook funding — an issue that some of the other universities have been discussing. Ilnitchi added the AMS advocated for both a cap on the the cost of online assessment tools and more funding for open educational resources.
On housing, another major issue of affordability, the AMS lobbied the government to stand by promises to increase student housing capacity.
“This government has made a really important and strong commitment to putting hundreds of millions of dollars towards student housing, making it part of their action plan,” said Ilnitchi. “… At the same time, there’s always more that needs to be done for student housing, and I think it’s important that students continue to have these conversations.”
The AMS also lobbied for funding for post-secondary institutions to implement sexual violence and misconduct policies.
“Only 5 of 25 postsecondary institutes in the provinces actually have standalone offices [for sexual violence support],” Ilnitchi said. “We’re hoping that this needs assessment will lead to the creation of a pool for financial aid for institutions that need more support to be able to [employ] full time staff.”
BCFC consultations are open to the public. The final recommendations are passed onto the minister of finance to be considered for the next fiscal year in April 2019.