Canada Permanently Eliminates Interest on Student and Apprentice Loans

Strategic Insights -

The Government of Canada announced a proposal to eliminate interest on federal student and apprentice loans, making life easier for 1.8 million Canadians and generations to come. This change will take effect on April 1, 2023, and will benefit both those currently repaying loans and new graduates coping with the high cost of living. The estimated cost of this proposal is $2.7 billion over five years and $556.3 million ongoing after that.

Key Takeaways:

  • The proposal to eliminate interest on federal student and apprentice loans will have an estimated cost of $2.7 billion over five years and $556.3 million ongoing after that.
  • The change will benefit 1.8 million Canadians and future generations by easing the financial burden of repaying loans.
  • The Government of Canada believes that the transition from school to working life should be made easier, not harder, and that this announcement will help to ease the pinch for Canadians.
  • The proposal includes current borrowers and new graduates, providing relief to those facing financial difficulties after graduation.
  • The elimination of interest on federal student and apprentice loans aligns with the government's goal of making life more affordable for Canadians.
  • The proposal is part of the Government of Canada's plan to address the high cost of living and make housing more affordable for Canadians.

Statistics:

  • Estimated cost of eliminating interest on federal student and apprentice loans: $2.7 billion over five years and $556.3 million ongoing after that.
  • Number of Canadians benefitting from the proposal: 1.8 million.
  • Date of implementation: April 1, 2023.
  • Current federal debt-to-GDP ratio: projected to continuously decline and is on a steeper downward track than projected in Budget 2022.
  • Total new measures proposed in the 2022 Fall Economic Statement: 18.

Sources:

  • "2022 Fall Economic Statement" - Government of Canada
  • Remarks by the Deputy Prime Minister for the 2022 Fall Economic Statement - Government of Canada
  • Backgrounder: Making Life More Affordable - Government of Canada
  • Backgrounder: Making Housing More Affordable - Government of Canada
  • Backgrounder: Jobs, Growth, and an Economy That Works for Everyone - Government of Canada
  • Technical Backgrounder: Canada Growth Fund - Government of Canada