Major student debt election promise by Liberals hides earlier policy fumble

The Gallant Liberals have been promoting the major election promise to eliminate student loan interest payments for graduates who settle in the province, but they only made the promise because plans to launch the program earlier this year were fumbled.

Money for program was approved in budget, but wasn't implemented and won't be unless Liberals are re-elected

The Brian Gallant government planned for the elimination of student loan interest in its budget released in January, but didn't implement the program. (Ed Hunter/CBC)
The New Brunswick Liberal party has been promoting the major election promise it made  Wednesday to eliminate student loan interest payments for graduates who settle in the province, but it's been quiet on one key point:  it only made the promise because plans to launch the program earlier this year were fumbled.

"This is a way to help our graduates be able to build their careers here — stay in this province," said Gallant about the plan to forgive interest, if the party wins re-election, on provincial student loans for those who remain in New Brunswick after school.

"Not only are we going to help them with the cost of living here in the province, we're also going to be encouraging them to stay here in the province."

Liberals estimate the program will save those paying provincial student loans about $1 million a month in interest payments, but the party made the pledge this week without mentioning that the legislature had already approved funding for that plan last winter.  

Enough money was authorized for graduates to begin receiving interest relief in July but government forgot, or otherwise neglected, to implement the change.

On radar since January

In January Finance Minister Cathy Rogers tabled the Liberal government's fourth budget, including a provision to cut student loan interest that graduates were expected to pay the province by $9 million. (CBC)

The issue first emerged in January when Gallant gave a speech to the Moncton Chamber of Commerce announcing his government would be "introducing new measures for post-secondary education student loan debt avoidance."

A week later, on Jan.30, Finance Minister Cathy Rogers unveiled the Liberal government's fourth budget, including a provision to cut student loan interest that graduates were expected to pay the province by $9 million.

That was enough to fund the interest relief program for nine months, beginning on July 1.

The early budget gave government five months to plan and introduce whatever legislative, regulatory or policy changes would be required to initiate the program.   

The legislature approved the budget in early February, including the provision for reduced student loan interest payments from graduates, but nothing happened after that.   

Despite Gallant's speech in Moncton pledging student debt avoidance measures would be introduced and funding being in place, the interest relief policy was not implemented — or even publicly announced. 

Liberal Party spokesman Jonathan Tower says government's failure to begin student loan interest relief in July, even though money was approved for it, is not unusual.

"Many budget decisions are made with various assumptions and implemented later through policy decisions of the legislature or government," wrote Tower in an email to CBC News. 

"The decision on timing was not made at budget and an assumption of $9 million was provided by officials assuming that the decision could be implemented no earlier than July 1."

No relief without re-election 

Liberal spokesperson Jonathan Tower says relief now won't come until the new year, and only if Liberals are re-elected. (Shane Magee/CBC)

Because government did not get the policy set up, those in the province currently paying student loans are still being assessed interest on what they owe at $1 million per month, even though the legislature approved all the money needed to forgive those amounts. 

Tower says relief now won't come until the new year and only if Liberals win office again.

"A re-elected Liberal government will take the necessary policy measures to implement the decision effective January 1, 2019," he wrote.  

"Elimination of student loan interest will not happen automatically and requires government action after the election."

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.