SAIT students with outstanding Canada Student Loans can look forward to reprieve if they are earning less than $25,000 a year after graduation.
On Nov. 1, 2016, a student debt relief plan was amended by the Trudeau government, to help students with the rising cost of post-secondary education.
For the next five years this measure will be in effect and provide up to $131.4 million in student loan debt relief for Canadian students.
Jamie Haggerty, a 2015 graduate from the University of Calgary, is thankful for the government’s efforts to help graduates while they are still getting settled in the workforce and during the rough times in Alberta’s economy.
“I have been out of post-secondary for two years and so far have only just finished paying off the interest of my student loans,” Haggerty said in an interview.
“This really will be a relief for me as I would like to pay less monthly while I look for work,” Haggerty said.
“It…puts a great deal of stress on me, especially because I have not been able to find a job in my field.”
Currently, Haggerty is working full-time in retail and is looking to buy a house while the housing market is slow. She says that Trudeau’s new repayment plan will help her with this.
“I realize that not only am I fortunate enough to go to school and especially post-secondary, I am also very blessed to have assistance from the government,” Haggerty said.
“I also understand that it is now my responsibility to repay my loans and contribute to society, but with the economy as bad as it is it seems I am stuck in a rut and cannot move forward in many aspects of my life, for instance buying a house or starting a family.”
Through grants and relaxed repayments, the government has set up an exemption benefit for graduates earning more than $25,000 annually and interest will be paid by the federal government until that time.
In 2009, the Repayment Assistance Plan (RAP) came into effect to offer borrowers assistance with repaying their loans.
In the past, RAP allowed borrowers who were having difficulties to wait until they were earning $20,210 in gross income before repaying their loans.
Under the revised plan, students are now can wait until their gross income is $25,000.
However, to take advantage of this, students are required to apply for the RAP income threshold themselves.
This can be done online, or with financial aid over the phone.
The assistance plan is based many factors including family income, what the graduate can reasonably afford, marital status and family size.
Based on the individual’s financial situation, it is possible to make smaller monthly payments than the typical floating or fixed rate.
For more information on your options, how to calculate your loan and how to apply for RAP visit the Canadian Government Student Loan website.
The relief will be in addition to increased support offered from Canada Student Grants (CSGs).
I realize that not only am I fortunate enough to go to school and especially post-secondary, I am also very blessed to have assistance from the government. – Jamie Haggerty
As of last Aug. 1, the federal government provided $2,000 to $3,000 to full-time students from low-income households, $800 to $1,200 to middle-income families, and $1,200 to $1,800 to part-time students in low-income families.
This grant amount was increased by 50 per cent since last year.
Currently, students who do not apply for the RAP income threshold, or earn more than $25, 000, will be placed on a basic repayment schedule where they can opt for a floating rate, where your bank can provide you with the more prime rate of interest added to your monthly payments, or a fixed rate program that will remain constant until your payments are loans in full.