The Canadian government plans to repeal interest on student loans will cost more than $556 million per year in perpetuity, according to Blacklock’s Reporter. .“Right now the investment is $2.7 billion over five years, but then there's an ongoing cost as well of $556.3 million per year,” Employment and Social Development Canada director of loans Erin Hetherington told the Senate Finance Committee. .The measure will take effect in April. Hetherington said the “purpose behind this measure is to provide relief for borrowers who are experiencing long-term affordability pressures.”.The Canadian government went back on its plan from September to raise the interest rate on student loans. .READ MORE: Liberals get ready to raise rates on student interest loans.Prime Minister Justin Trudeau said during the 2021 Canadian election he would abolish student loan interest charges..Employment and Social Development Canada said in a legal notice under the Canada Student Loans Regulations interest charges retroactive to August would be increased from 2.1 to 3.1%. A current moratorium on interest payments expires on March 31. .Bill C-32 includes amendments to the Canada Student Loans Act to eliminate interest payments. .“I am somewhat sensitive to it,” said Conservative Sen. Percy Mockler.“Being the son of a single mother born on welfare, I know how important student loans are.”.Loan managers told the House of Commons Finance Committee on Monday they had no estimate about how many poor students unable to afford post-secondary education would go to it because of Bill C-32. Conservative MP Adam Chambers asked how many students who are not accessing post-secondary education would use it. .“This measure is targeted at making loan repayment more affordable so I do not have the number,” said Employment and Social Development Canada assistant deputy minister Atiq Rahman. .Chambers said he “just wanted to put that on the record.”.“We are going to spend $500 million helping students who are already in post-secondary education as opposed to providing the same amount of money in grants to help students who couldn’t otherwise go to school,” he said.
