Nova Scotia graduates no longer have to pay interest on their provincial student loans, the provincial government announced Friday.
Advanced Education Minister Kelly Regan said the move will save graduates money as they start their careers.
"Eliminating the interest on provincial loans was our commitment from day one, and we're keeping our promise to students," said Regan. "We know that every dollar counts when graduates are beginning their careers, and we hope this provides some relief to young people as they build their lives in Nova Scotia."
Jonathan Williams, the executive director of Students Nova Scotia, said this decision will help students but said what's really needed are grants to students so they don't rack up debt in the first place.
"It's a modest investment but it's an important one. I think it;s going to make the program more attractive. It alleviates that worry that students are going to have that their debt is going to grow after graduation and it's going to make it easier for them to pay off those loans faster. It's definitely a good step in improving the student assistance program," he said.
In a news release, the province said there are about 18,000 borrowers who be eligible to benefit every year. That number does not include current students who may also qualify in the future.
To qualify, a borrower must meet the following criteria:
- Be a resident of Nova Scotia.
- Have graduated from an "approved, designated post-secondary school."
- Have a Nova Scotia government-sponsored "direct-lend" loan.
- Have entered repayment on their student loans on or after Nov. 1, 2007.
However, those who have paid interest since Nov. 1, 2007 will not be reimbursed for money already paid, but will no longer pay interest going forward.
The program does not include the federal government portion of the borrower's loan.
Regan said even those who take jobs outside the province may be eligible.
"They have to be a resident of Nova Scotia. So even if they, for example, work out in Alberta some of the time but pay they're paying their taxes here, they would be eligible," she said.
According to the government, the average Nova Scotia student loan is about $5,600. Eliminating the interest would save about $800 over the lifetime of a loan in that amount.
The Nova Scotia Student Assistance office will contact borrowers over the next few weeks to explain how they can apply. An online application will be used to determine if borrowers qualify.
"Keeping post-secondary education affordable in Nova Scotia is a priority," said Regan. "We're working to better support students and graduates — they're the future of this province."
The Nova Scotia government will invest $1.6 million in this program annually.
Newfoundland was the first province to eliminate student loan interest in 2009. Prince Edward Island eliminated interest on provincial student loans in 2012.
While Regan is offering this break, Finance Minister Diana Whalen may take away another. Both ministers are critical of a more generous student tax credit, the Graduate Rentention Rebate. It's a $50-million program that's under review.