How to Get Rid of Student Loans Canada
The NDP on Saturday said it will push the Liberal government to cancel up to $20,000 in federal student loan debt per Canadian, as part of its plan to help young people struggling financially amid the COVID-19 pandemic.
NDP Leader Jagmeet Singh is due to announce the plan at the virtual Young New Democrats Convention Saturday afternoon.
The plan also includes giving new graduates a five-year head start without having to repay any federal student loans.
"Young people in Canada have been among the hardest hit (by the pandemic) and have had to make fundamental shifts in their education, employment and financial situations," Singh said in a statement.
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"An education should help young people get ahead, not leave them further behind."
Which Canadians may struggle the most to pay off their student loans?
The federal government announced in March 2020 — as COVID-19 and resulting lockdowns began to sweep across Canada — that it would put a moratorium on student loan payments and interest accruals. Meanwhile, the NDP have been staunch supporters of cancelling interests on student loans permanently.
The moratorium expired at the end of September, and was not renewed despite pleas from the NDP and student groups. The party has continued to push Ottawa to reinstate the moratorium until the pandemic ends.
Under the new plan, the Repayment Assistance Plan — which allows for payments to be deferred and even reduced in some cases — would be replaced with an "income contingent debt forgiveness program."
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After the five-year head start period, graduates with an annual household income of $60,000 or less would be eligible for a $20,000 debt reduction. The reduction amount would be less for households earning between $60,000 and $100,000, based on a linear scale, before phasing out for household incomes above $100,000.
The NDP estimates the proposed program would help over 300,000 Canadians in its first year, and more than 100,000 Canadians every year after.
Statistics Canada's 2018 survey of graduates, published last fall, reported 54 per cent of university bachelor's degree grads had student debt at graduation, owing an average amount of $28,000.
Singh said Ottawa has taken in over $4 billion in student loan interest payments since the Liberals formed government in 2015.
He also noted that a majority of Canadian youth have seen financial impacts and employment difficulties during the pandemic.
An Ipsos poll for Global News this month found 42 per cent of young Canadians — those between the ages of 18 and 34 — said their financial situation had worsened over the past year.
That number dropped to 37 per cent among those aged 35 to 54 and fell further to 29 per cent for those aged 55 and up.
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Federal Election 2019: Singh says he'll 'waive all interest' on student debt on first day as prime minister
Singh has made student debt cancellation a key part of the NDP's platform since becoming its leader in 2017.
During the 2019 election, Singh promised he would waive all interest from student loan debt on his first day as prime minister, before working toward eliminating student debt entirely.
Singh has pushed the Liberal government to adopt those policies as well.
The Liberals promised during the campaign that it would change the student debt policy so payments wouldn't have to be made until graduates make over $35,000 in annual income. That change has not yet been implemented.
— With files from Hannah Jackson and the Canadian Press
© 2021 Global News, a division of Corus Entertainment Inc.
How to Get Rid of Student Loans Canada
Source: https://globalnews.ca/news/7708600/ndp-student-loan-debt/