Canadians with federal student loan debt are getting a break on payments and interest over the next six months as all efforts to stabilize the Canadian economy is being taken.
The payment relief is optional, and students can keep making their payments, it is always recommended that if you can pay, you should pay. Deferring any type of debt only extends the payment terms and potentially increases the cost. The payment pause is automatic, and students do not need to apply. The payment pause starts March 30th and runs until the end of September.
Important to remember, this only applies only to the federal student debt portion and does not address any provincial payments, or student loans/lines of credit with banks or other private financial institutions. The relief is very timely as many students rely on part time, seasonal work in restaurants, and other industries hit by COVID19 to afford tuition and living expenses. As we move towards the summer, students will find many of these jobs will not be available, or much harder to obtain. The Canadian Federation of Students is also requesting further support for students who can’t find work and need help paying education related costs and tuition.
Canadian banks have stated they are willing to work with those in financial crisis on a case by case basis and have implemented payment deferral programs. Nothing has specifically been announced from the banks regarding student loans and lines of credit at this stage. At this time anyone struggling should approach the lender directly and see what support can be offered.
For those that have recently graduated, this will come as a welcome break as finding employment in their chosen field will be much harder to come by in the coming months. However, prior to COVID19, student loans are responsible for delaying many major life purchases and milestones. In turn reducing future wealth generating opportunities such as buying a home. So, if you can pay, don’t delay.