Alberta’s United Conservative government announced it will cap post-secondary tuition increases and reduce student loan interest rates in an announcement on Thursday morning.
The changes, which are part of Budget 2023, aim to tackle the cost of living crisis for post-secondary students and graduates.
Domestic tuition will be capped at two per cent in the 2024-25 academic year and beyond, Advanced Education Minister Demetrios Nicolaides told reporters on Thursday.
Graduates will see a dip in their student loan repayments: interest rates on student loans have been reduced to only the prime rate, which is currently 6.7 per cent. Previously, the interest rate for student loans was 6.7 per cent plus one per cent.
The student loan interest-free grace period was also increased from six months to 12 months, which Nicolaides said will give students more time to find employment without having to worry about student loan payments.
The income threshold for student loan repayment assistance has also increased from $25,000 a year to $40,000 a year.
“The change is necessary and will help address inflationary pressures by reducing costs of borrowing and alleviating repayment risks,” Nicolaides told reporters at a news conference on Thursday.
“I want to ensure that every student can gain the knowledge and skills that they need to live fulfilling lives and develop fulfilling careers.”
Matt Yanish, vice-chair of the Council of Alberta University Students, said while the announcement doesn’t solve the cuts in funding to post-secondary education, the new policies are a step in the right direction.
The UCP’s 2019 budget cut advanced education spending by five per cent compared to 2018. Funding for post-secondary education will be down 12 per cent by 2023.
“This announcement today could not have come at a more critical time. Like all Albertans, students have been heavily impacted by the cost of living crisis,” Yanish said at Thursday’s news conference.
“I’m confident students will benefit from these long-term solutions… Students today are key stakeholders in our province’s economic future.”
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University of Calgary Students’ Union president Nicole Schmidt said she is pleased to see the financial support from the provincial government, but more needs to be done.
“Since 2019, students have endured the largest increases in tuition in Alberta’s history,” Schmidt said in a news release Thursday.
“Today’s announcement, while welcome, is a drop in the bucket when compared to the additional costs students are facing due to government cuts and the inflation crisis.”
Advanced Education critic David Eggen said these measures aren’t enough to help students and criticized the UCP for pushing students further into debt.
Alberta has the highest tuition increases across Canada since the UCP government was formed, he said.
“Nicolaides himself has argued strenuously against a tuition cap, and in favour of increasing interest on student loans. Reversing himself immediately before an election is obviously dishonest and shows Albertans that the UCP simply can’t be trusted,” Eggen said in an emailed statement.
No help for international students
International students, however, do not benefit from the newly-announced changes despite facing the same inflationary pressures as domestic students.
International student tuition is often increased at a higher rate compared to domestic tuition. Most international undergraduate students at the University of Calgary will see a 10 per cent increase in their tuition in the 2022-23 academic year.
Currently, there is no legislation capping tuition fees for international students.
Nicolaides said support and resources for international students are being discussed.
“I’m happy to continue chatting with international students and keep the conversation moving to try and address these affordability issues,” Nicolaides said.
“It’s definitely a priority.”
University of Calgary Students’ Union vice-president external Mateusz Salmassi said the UCP must help international students if it wants to attract more international talent to come to its post-secondary institutions.
“International students have been completely left behind by this government,” Salmassi said in an emailed statement.
“International tuition remains unregulated and today’s announcement makes it easy for universities to continue using international students as cash cows to fund university operations. This needs to change.”
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