Student loan repayment plan improved
Repaying those student loans just got a little easier with the federal and provincial government’s announcement of the Repayment Assistance Plan.
The plan is part of the Families First Agenda which is designed to better support vulnerable families, among other initiatives.
“When it comes to repaying student loans, we want to ensure that low-income students and their families have the extra support they need to move forward,” said Premier Christy Clark.
Clark said the program will help about 20,000 students in B.C. with low incomes who are struggling to get ahead.
The two-stage plan took effect July 1. The first stage provides payment assistance for the interest portion of the student loan, while the second stage provides payment assistance for the principal portion of the loan.
The RAP is based on the borrower’s ability to repay. Income, family size and student loan debt load are all considered in the eligibility process.
With RAP, a student may only have to pay a portion of their regular payments, and over time, stage two will forgive a portion, and in some cases, all of a borrower’s dept based on their income and family size.
Students with a permanent disability can also qualify for an accelerated RAP where, at the end of 10 years, if an individual still can’t afford their monthly payments, their loans will be paid in full.
For example; a family of two children and two parents with loans and an average income of $50,000 with combined student loans of $40,000 would be expected to pay $485 monthly. With RAP, that same family would have a total combined payment of $87.
“Our government is working with the provinces and territories so students and their families can afford post-secondary education,” said James Moore, Minister of Canadian Heritage and Official Languages.
“While most borrowers repay their loans without difficulty, some require assistance. By aligning our programs, the governments of Canada and B.C. are providing students with additional support.”