Interest rates for Alberta Student Loans have increased 7 times in the past year leaving newly graduated students with dramatically increasing debt. On her Alberta Loan of $10,960, my daughter will end up paying $4500 – $5000 in interest when her loans are totally paid off in 9.5 years at the current rates. She paid $536.39 in interest this year.
Students need to be aware of this and take action to pay off their Alberta Student Loans quicker, by paying down the balance faster or taking out a line of credit or a lower-interest loan to pay off the balance.
The interest on Canada Student Loans was suspended in April 2021 until March 31, 2023. So at the moment, Canada Student Loans payments directly reduce the principal. We hope the federal government extends the interest-free period.
New Brunswick has eliminated the interest on its provincial student loans, fulfilling the New Brunswick Government’s commitment to make post-secondary education more affordable, as of November 1st, 2022.. This change benefits all current and future borrowers.
The Alberta Government has rolled out Affordability Payments for Seniors, Families with Children under 18, and Albertans on benefit programs, but they have put the burden on young adults who have invested in creating a better future for themselves. The current interest rates on Alberta Student Loans is no better, and in some cases worse, than the interest rates a student could obtain by getting a loan from a bank independently.
My daughter who finished her post-secondary education with $30,000 in student loans began repaying her loans in January 2022 after the 6 month grace period upon finishing her post-secondary program. $19,040 of the loans were allocated as Canada Student Loans and $10,960 as Alberta Student Loans. Her payments seemed manageable with $167.02/month to the Canada Student Loan and $112.89/month to the Alberta Student Loan.
Only when she received an email from Alberta Student Aid on January 23rd,2023 to view her account and see her receipt for interest paid did she see the 7 interest rate increases over the past year.
January 4th – 3.45%
March 3rd – 3.7%
June 2nd – 4.7%
July 15 – 5.7%
Sept 9 – 6.45%
Oct 27 – 6.95%
Dec 9 – 7.45%
When students apply for student loans, they do not have a say in how much comes from the Canada Student Loan and the Alberta Student Loan programs. So these burdens are not rendered equitably to all students. They also do not know what interest will be charged when the loans are secured years earlier.
The Alberta Government needs to do better. Students need to be made aware of the extra debt they are going to incur when they are getting out of post-secondary and trying to forge a life.
A concerned parent raising responsible young adults. Trying to coach our children into adulthood.
Jeannie Charrois
