Canadians with federal student loan debt are enjoying a break on payments and interest over the next six months as Ottawa steps up its extraordinary efforts to stabilize the Canadian economy during the COVID-19 crisis.
The general loan suspension applies only to the federal portion of student debt, and Wednesday’s announcement does not address provincial or territorial payments to private financial institutions. Canadians will not need to request this payment break; it will be automatic. Alternatively, borrowers can track their payments if they wish.
“I went to law school and having debt and having worries is anxiety,” Employment and Workforce Development Minister Carla Qualtrough told CBC.
The National Student Loan Service Center said the pause on payments and interest accumulation takes effect March 30 and will last until September 30. But Qualtrough has not ruled out the possibility of extending the refund break.
“This situation is so fluid that we don’t rule out doing this,” she said. “As the situation becomes more complicated and more serious, there will never be a point where we will not consider extending everything we announced today.”
Federal NDP Diversity, Inclusion and Youth Critic Lindsay Mathyssen said she welcomes the loan suspension but hopes the government will eliminate interest on student loans for good.
“We believe students shouldn’t have to pay interest on student loans at all,” Mathyssen said. “We never think it’s right for the government to take advantage of the future of students.”
The pause on lending is part of an $82 billion rescue package for the Canadian economy, which includes $27 billion in direct supports and an additional $55 billion to help businesses’ cash flow through deferrals. ‘tax.
The Canadian Federation of Students is also calling for additional help for unemployed students who will need help paying tuition for the upcoming semester, and for international students who don’t have the same health coverage.
“What we’re really asking for is to ensure that every student can receive money for their rent and living expenses and can complete their semester. So we want a plan that addresses that,” said the president of the CFS, Sofia Descalzi.
The Canadian Alliance of Student Associations applauded the federal government’s decision to provide student loan relief and joined the Green Party of Ontario in calling on provincial and territorial governments to follow Ottawa’s decision.
“I am pleased that the federal government has taken the lead on this file,” said CASA President Adam Brown. “I hope that kind of response will be reflected at the provincial level as well.”
Canada’s six largest banks today released a joint statement saying they will work with customers on a case-by-case basis to help them “overcome challenges such as payment disruptions due to COVID-19.”
But the Canadian Bankers Association has not clarified whether that means banks would specifically offer relief to customers struggling with student loans from financial institutions.
A National Bank of Canada spokesman, Jean-Francois Cadieux, said Radio-Canada customers having difficulty repaying their student loans may be eligible for special measures.