Less is More: Budget 2014 Reduces Student Debt to Historic Lows
The Government of Newfoundland and Labrador recognizes the value of post-secondary education for students, their communities and the economy of the province. Replacing provincial student loans with non-repayable grants is the latest in a series of initiatives, supported by unprecedented levels of investment, such as the introduction of up-front needs-based grants, removal of interest on student loans, and the ongoing tuition freeze at Memorial University and College of the North Atlantic. Budget 2014 commits $14.7 million for two years to eliminate provincial student loans, with a projected investment of approximately $50.6 million over five years.
Approximately 7,000 students annually are expected to receive up-front grant assistance to help them access post-secondary education. Effective August 1, 2014, the provincial student loan will be decreased by $20 per week of study, and the grant portion will be increased by $20. Students would be eligible to receive a maximum of $40 per week of study in the form of a loan and $100 per week of study in a grant. Effective August 1, 2015, provincial student loans will be completely replaced with non-repayable grants.
Significant reductions in monthly payments
With the complete elimination of provincial student loans and replacement with up-front, needs-based grants, students will see a significant reduction in the amount to be repaid as a student loan. The only loan to be paid back will be a Canada Student Loan.
A student at College of the North Atlantic completing a one-year program will benefit by having his/her average student loan monthly payments reduced by 42.1 per cent, from $113 per month to $67 per month.
A student at Memorial University completing a four-year program will benefit by having his/her average student loan monthly payments reduced by 44.4 per cent, from $300 per month to $167 per month.
Since 2003, student debt has decreased by 20 per cent. With the full elimination of provincial student loans and only federal student loans remaining, the expected average student loan debt will decline further, as noted in the chart below.
|Average Debt by Program||2003-04 Average Total Debt||2015-16 Projected Total Debt||2015-16 Projected Total Savings|
|CNA||1 Year Program||$9,995||$5,783||$4,212|
|Private||1 Year Program||$11,399||$6,833||$4,566|
|MUN||4 Year Undergraduate||$26,592||$14,787||$11,805|
Note: Average government-sponsored student debt in Canada is estimated at $27,000. For more information on Student Financial Assistance please visit: www.aes.gov.nl.ca/studentaid/
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2014 03 27 2:25 p.m.