The Liberal government announced new measures during the release of the 2016 budget to help assist with the debt load recent post-secondary graduates face before joining the workforce. They will take effect starting Tuesday.
As of Nov. 1, students who have taken out a Canada Student Loan will not have to repay their debt until he or she is earning at least $25,000 per year, Employment and Social Development Canada announced in a press release.
Students who are having difficulty meeting their monthly loan payments can apply for assistance through the Repayment Assistance Plan, the government said.
Based on the individual’s financial situation, a borrower can apply for a reduced Canada Student Loan monthly payment, or for no payment at all, the government said in the statement.
“The future prosperity of our country depends on young Canadians getting the education and training needed to succeed in the job market,” Employment Minister MaryAnn Mihychuk said in a statement. “As a result of this new measure, students will be better positioned to transition into the workforce after graduation.”
The announcement follows increased support for students through the Canada Student Grants.
On Aug. 1, the federal government announced a 50 per cent financial increase in Canada Student Grant amounts.
As of late summer, full-time students from low-income families can receive from $2,000 to $3,000 per year, while part-time students from low-income families can receive anywhere from $1,200 to $1,800 per year. Students from middle-income families can receive $800 to $1,200 per year.
According to Employment and Social Development Canada, about 750,000 Canadians were repaying their Canada Student Loans in 2013 and 2014, and about 234,000 of those used the Repayment Assistance Plan.