MP Wayne Stetski is calling on the federal government to eliminate interest on federal student loans. (File photo)

Stetski calls for no interest student loans

Letter requests interest on federal student loans to be eliminated in the 2019 budget

The New Democrat MP for Kootenay-Columbia wants to see the elimination of interest charged on federal student loans.

Wayne Stetski’s request follows the decision last month by the provincial NDP government to stop charging interest on provincial student loans.

Stetski said federal student loans make up a larger portion of the debt many young Canadians are graduating with, and those loans have relatively high interest rates.

The interest formula for federal student loans has not changed since 2000 and the federal government currently charges higher interest rates than some bank offerings for student lines of credit.

The interest rate is either variable at prime plus 2.5 per cent (currently 6.45 per cent) or fixed at prime plus 5 per cent (currently 8.95 per cent).

Stetski called the interest charges, “a penalty on low and middle-income students who cannot pay for their education outright.”

Stetski said interest relief is needed at the federal level because young Canadians are graduating with record educational debt in a time of stagnant wages and soaring housing costs.


 

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