New Brunswick

2 parties promise to eliminate student loan interest — with identical catch

The Liberal and New Democratic parties made identical promises Monday to abolish student-loan interest.

NDP also promises free community college, 25 per cent cut in university tuition

Liberal Leader Brian Gallant and NDP Leader Jennifer McKenzie said the costs of their promises would be revealed later, with their platforms. (CBC)

The Liberal and New Democratic parties made identical promises Monday to abolish student-loan interest.

One hour apart, and on the same Fredericton campus, NDP Leader Jennifer McKenzie and Liberal Leader Brian Gallant promised not to charge interest on provincial student loans under one condition — that students with those loans stay in the province.

McKenzie re-announced this alongside two other promises: free community college tuition and a 25 per cent cut in university tuition.

She said these have been NDP positions since March, and she recognized similarities with the Liberals' announcement.

"Once I became leader, we set out with three [promises] and we increased it to five, and the Liberals are picking them off like cherries, one at a time," McKenzie told journalists outside the Student Union Building. "I'm not at all worried that the Liberals are borrowing our ideas."

The Brian Gallant government says it planned for the elimination of student loan interest in its budget released in January. (Ed Hunter/CBC)

But Gallant's promise on Thursday was an elaboration on a previous plan, according to Jonathan Tower, a spokesperson for the Liberal Party.

He said the provincial budget released in January was built around student "debt avoidance measures." Wednesday's announcement, he said, specified what those measures will be.

"It is already in the budget and accounted for moving forward," Tower said.

The cost

Both Gallant and McKenzie said the cost of their promises would be revealed later this week with their platforms.

The parties plan to use tax returns to determine whether the graduates are living in New Brunswick or another province. Those with student loans who file taxes from another province with an amount owing will begin accruing interest on the amount they owe.

Jennifer McKenzie re-announced the party's commitment to eliminate provincial student loan interest, provide free community college and reduce university tuition by 25 per cent. (Ed Hunter/CBC)

According to the 2017-18 New Brunswick budget, more than $11.6 million was budgeted for student loans in the education and new economy fund.

According to the department of Post-Secondary Education, Training and Labour, New Brunswick students paid $9.6 million in loan interest in 2017 and 2018.

Tuition decrease

McKenzie said tuition has increased by 25 per cent since 2012, under Progressive Conservative and Liberal governments.

"We've seen a 25 per cent hike in the tuition rate," she said. "This sends a very negative message to young people who are trying to put their lives in place."

To achieve the 25 per cent reduction, the NDP would ask the universities to lower their tuition rates, and the province would compensate them for the lost income. 

For community college tuition fees, the province would also make up for the tuition that students wouldn't be paying. 

Students react

Caleb Foster, a university student from Fredericton, said he was planning to stay in the province anyway but eliminating student loan interest is a good step.

Caleb Foster, university student from Fredericton, said eliminating student loan interests may be good step. (Ed Hunter/CBC)

"The interest is really where all the money comes from because after you pay your student loans back [you] still have your interest and that's a big portion of what you're paying," he said.

Emily Blue of the New Brunswick Student Alliance said financial barriers are sometimes larger than just tuition.

"Textbooks, are very expensive," she said. "Students are struggling to access mental health resources, students are struggling to have access sexual violence resources, so there's a lot more that could be done in different areas that also impact post-secondary education students."

Brianna Workman, president of the St. Thomas University Students’ Union, said students would like to see some focus on some non-financial barriers such as mental health services. (Ed Hunter/CBC)

Brianna Workman, president of the St. Thomas University Students' Union, said students "would really like to see some focus on those non-financial barriers … like mental health support and supports for sexual violence survivors and support for Indigenous students and things of that nature as well."

Tuition bursary

On Wednesday, Brian Gallant counted several programs already been put in place by his government to assist students. Once is the free tuition program, which covers the cost of tuition for students whose household income is less than $60,000, and if he's re-elected, $70,000.

The other is a "tuition relief for the middle class" program, which uses a sliding scale model to cover up to 95 per cent of tuition for families that make more than $60,000.

McKenzie said the NDP wouldn't do away with these programs but would extend them to graduate students.

"While they're still making a difference we will keep them," she said. "Once we get to free tuition, I think they will become less important. But it's important to support people who need supporting. and the NDP would certainly make sure that we wouldn't touch anything that was helping students from disadvantaged backgrounds to get a good education."

Gallant was previously criticized for cutting a tuition rebate for graduate students to make room for the free tuition and tuition for the middle class programs.

- With files from Catherine Harrop