Eliminating Interest on Federal Student Loans | Ottawa is ready to compensate Quebec if it follows suit

(Ottawa) The Trudeau government is ready to pay annual financial compensation to Quebec if the Legault government follows suit and permanently eliminates interest on student loans.

Negotiations are already underway between Ottawa and Quebec, which administers its own loan and scholarship program, with a view to reaching an agreement, according to information obtained by The press. The Quebec Student Union is calling on the Legault government to quickly sign an agreement that will allow students from Quebec universities to enjoy the same benefits as those in the rest of the country.

In the economic statement she presented to the House of Commons last month, Finance Minister Chrystia Freeland announced that Ottawa will permanently eliminate interest on federal student and apprenticeship loans starting Jan.eh April 2023. This measure will cost the federal tax authorities approximately $550 million annually and will allow a student to save an average of $410 per year.

The Trudeau government had already announced the suspension of interest on these loans for two years in 2021. This measure was therefore due to end on March 31, 2023. But Minister Freeland chose to make it permanent to give students a boost as part of a package of measures to help the less fortunate cope with the rising cost of living.

Federal officials are already in contact with Quebec officials. Federal funding will be available to allow Quebec students to benefit from this important measure. And we hope the Quebec government will follow our example to help students as it has during the pandemic.

Jessica Eritou, communications advisor in the office of Mr.me Freeland, in an email to The press.

She added that the Treasury has already included an amount of $550 million to compensate Quebec.

She explained that during the pandemic, Ottawa had suspended the repayment of Canada’s student loans for six months and that it had transferred funds to Quebec to convince it to do the same, which had been the case.

“The same model would be applied here. Funding to facilitate this in Quebec […], if Quebec decides to eliminate interest on its own student loans, the fall economic statement stated. The federal government will provide the funding if Quebec agrees to eliminate interest on its student loans,” she said.

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In Quebec, Finance Minister Eric Girard’s office has indicated it is considering following in the Trudeau government’s footsteps.

“Education is a Quebec jurisdiction. We are exploring the possibility of harmonizing our loan and scholarship program with the federal government,” Claudia Loupret, Minister Girard’s press secretary, said in an email.

Sir. Girard is due to present an economic update on December 8, which should include the measures for the “anti-inflation shield” proposed by François Legault during the election campaign. The elimination of interest on student loans was not on the list. But Ottawa’s decision to provide financial aid to students with loans could force the Quebec government’s hand.

One thing is for sure, the Quebec Student Union (UEQ) wants the Legault government to announce its colors as soon as possible.

The president of UEQ, Samy-Jane Tremblay, confirmed that the students are on a low income and also have to deal with an increase in the cost of living.

“What we want is for the federal government to transfer the money to Quebec. But since this money goes into the pockets of students in the rest of the country, we don’t want it to be used for other purposes in Quebec. We want, that Quebec students must also see the color of this money and that it goes directly into the student aid program,” said Samy-Jane Tremblay.

“At the moment we are in a situation where the students are facing a rather serious housing crisis. And in the context of the inflation that we’re experiencing – it’s 5% to 8% a month – it’s absolutely necessary to support the student,” she added.

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