Federal budget 2019 tackles student loans

Changes estimated to save student borrowers $2,000

The federal government’s 2019 budget hopes to target rising student loans and relieve the payment process.

The budget, released on March 19, proposes lowering interest rates for student loans to prime, rather than prime plus 2.5 per cent. Similarly, any students under fixed interest rates of prime plus five per cent will have their rates lowered to prime plus 2.5 per cent.

These changes will also be paired with an amendment to the Canada Student Financial Assistance Act. The six-month grace period following graduation is set to be interest-free, despite changes made to OSAP earlier this year by the Ontario government.

OSAP changes and educational reform in January also cut tuition costs for students, decreasing overall revenue levels for post-secondary institutions.

Assistance for students after graduation will also include grace periods for students on parental or medical leave. These periods will not accrue debt or require any loan payment and can last anywhere from six to 18 months.

The changes are estimated to save students roughly $2,000 while borrowing.

To also boost job opportunities for post-grads, initiatives have been put forward to increase service placements and provide support to young people looking for work.

Specifically, 15,000 service placements and 84,000 new work placements are set to receive federal funding by 2023-24.

The post-secondary sector will also gain increased funding from the federal budget with a $114 million investment in 500 master’s scholarships and 167 three-year doctoral scholarships awards. These are distributed through the Canada Graduate Scholarship program.

In a March 20 statement, Principal Daniel Woolf said the new budget is a “welcome investment in skills training and talent development, which will help prepare Canadians for the jobs of the future.”

“Queen’s will continue to encourage the government make further investments in fundamental research,” he wrote. “Recognizing both the basic scientific discoveries and applied skills training opportunities that university-generated research provides.”

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