FAIRNESS IN INTEREST GRACE PERIOD
Eliminating the Interest During a Student’s Immediate Post-Loan Grace Period
Currently, at the conclusion of a student loan period, students are given a six month grace period
to begin repaying their loans. At the same time however, interest accrual begins immediately
upon conclusion of a student’s study period. The grace period is designed as a means of allowing
the transition from program of study into the work force and is important for ensuring education
affordability. By charging interest during the grace period, loan repayment is extended and overall
interest paid to repay the loan is increased, often without the student being aware.
AROUND 49%
OF STUDENTS BELIEVE THERE
IS NO INTEREST ACCRUED
DURING THE GRACE PERIOD
According to the Canadian Student Survey in 2009, 49.7% of students surveyed believed that interest did
not begin accruing until the conclusion of the six month grace period. 1 Only 12.5% of respondents were
able to correctly identify when interest began accruing. This reflects the confusing and disingenuous
nature of a repayment ‘grace period’ where interest is still being charged.
For the median student loan holder repaying their student loan over a ten year period, this grace period
interest results in an additional $716.27 over the duration of their repayment option. For those taking out
larger loans, this number obviously increases substantially.
GRACE PERIOD
INTEREST COSTS
$716
FOR THE
AVERAGE STUDENT 2
THE ABCS RECOMMENDS THE GOVERNMENT OF BRITISH
COLUMBIA END THE ACCRUAL OF INTEREST DURING THE
STUDENT LOAN GRACE PERIOD FOLLOWING A PERIOD OF
STUDY AT A COST THAT HAS BEEN ESTIMATED BY THE
MINISTRY OF FINANCE OF $10 MILLION.
1. http://higheredstrategy.com/wp-content/uploads/2011/09/Canadian-Student-Survey-Summer-Work-and-Paying-for-PSE2.pdf
2. https://studentaidbc.ca/plan/debt#repayment
FAIRNESS IN THE COST OF EDUCATION
Reducing or Eliminating Student Loan Interest
For students who can complete their
studies without student loans, the
average four year undergraduate
degree will cost them $16,680 in tuition
in British Columbia. 1 The median BC
student loan amount after graduation
is $20,000 which, assuming they are
able to complete repayments in the
recommended ten year time, results in
interest paid of $6,212. 2
PROVINCIAL STUDENT LOAN INTEREST RATES
At 2.5% above prime, British Columbia has the highest student loan interest rates of any province in
Canada, tied only with New Brunswick. Student Loans are the primary means for low income British
Columbians to access higher education, which has been shown to be the most reliable way of ensuring
higher earnings over time. With around half of all students in post-secondary taking out loans, those
that do take loans pay considerably more for their education than those who don’t.
BRITISH COLUMBIA PRIME +
2.5%
ALBERTA PRIME
MANITOBA
0%
SASKATCHEWAN PRIME
ONTARIO PRIME +
1%
QUEBEC PRIME + 0.5%
NEW BRUNSWICK PRIME +
NOVA SCOTIA
0%
NEWFOUNDLAND
0%
P.E.I.
0%
2.5%
The student who takes out no student loans pays $16,680 for their degree while the student taking out
loans is paying $22,892 for their degree after interest on their loan repayment is accounted for. Those
that are able to not receive student loans are paying 27% less for their education than those that must
supplement their income through loans.
Were the BC provincial government to move in line with most provinces and charge at a prime rate, the
$6,212 disparity in education costs between students who do not require loans and those that do would
be reduced to $3,222.20. If the province moved in line with Newfoundland, Prince Edward Island and Nova
Scotia, that disparity would disappear altogether.
By charging 2.5% above prime, the province is forcing those who cannot afford post-secondary without
loans to pay substantially more for their education than those who are able to complete their degrees
without loans.
HOW MUCH MORE IT COSTS A STUDENT
WHO TAKES OUT A BC STUDENT LOAN
TO GET AN EDUCATION
THE ABCS RECOMMENDS THAT THE GOVERNMENT REDUCE
STUDENT LOAN INTEREST RATES TO PRIME, WITH THE
INTENTION OF PHASING OUT INTEREST RATES ALTOGETHER
OVER TIME. THIS IS ESTIMATED TO COST THE GOVERNMENT
$20 MILLION TO REDUCE TO PRIME AND A FURTHER $20
MILLION TO ELIMINATE INTEREST RATES ALTOGETHER.
1. Provincial weighted average tuition taken from http://www.aved.gov.bc.ca/tuition/welcome.htm.
2. https://studentaidbc.ca/plan/debt#repayment Student Aid BC student loan calculator
27%
REDUCING THE FINANCIAL BARRIER
Upfront, Needs-Based Grants
British Columbia is the only province without a needs-based student grant program. Without any
compensatory plan or program, the BC government eliminated the modest grant program that did exist in
2004. When the federal government established the Canada Student Grant Program for low- and middleincome students in 2008, it left BC as the only jurisdiction in the country without a similar form of
student assistance.
The upfront cost of education is the most cited barrier from those from lower-incomes not attending
post-secondary education – this is particularly true about university enrollment. Moreover, those from
lower-income families are less likely to be aware of aid that may be available during and after their
program. 1 These realities point to the need to provide up-front, needs-based grants at the onset of
enrollment to increase accessibility for those who need it the most. Post-program debt relief (such as
the BC Loan Reduction Program, which only helps after students have been devastated with debt) does
not assist lower- and middle-income students get to post-secondary education in the first place. It also
does not lessen the problems associated with the direct correlation between increasing debt levels and
lower program completion rates. 2
Last year, the government of Newfoundland and Labrador decided
to entirely replace provincial student loans with non-repayable
grants. This is a stark comparison with BC, which has no
needs-based grants and where students are graduating with
the highest levels of debt in the country.
NEEDS-BASED GRANTS WERE ELIMINATED BY THE BC GOVERNMENT IN 2004.
BC IS THE ONLY CANADIAN PROVINCE WITHOUT A STUDENT GRANTS PROGRAM.
THE ABCS RECOMMENDS THE GOVERNMENT OF BRITISH
COLUMBIA MATCH THE CANADA STUDENT GRANTS FOR LOWAND MIDDLE-INCOME STUDENTS, AT A COST OF $97 MILLION.
1. Canadian Council in Learning. (2009). Post-secondary education in Canada: Who is missing out?
2. Lori McElroy. (2005). Student Aid and University Persistence: Does Debt Matter?
BRINGING THE BEST AND BRIGHTEST TO BRITISH COLUMBIA
Creating a BC Graduate Scholarship Program
Graduate students serve three crucial roles in the university structure: acting as researchers, teachers,
and learners. First-rate graduate students lead cutting-edge research initiatives, provide excellent
learning experiences for undergraduates, and form the basis of a highly-skilled workforce. Competition
for top students is an increasingly global affair and BC needs a strategy to ensure it is the destination
of choice for talented individuals. The Alliance of BC Students believes the best way to do this is through
the creation of a BC Graduate Scholarship program.
A BC Graduate Scholarship program is an investment that will grow the economy. Not only will it ensure
BC has an adequate supply of skilled workers needed to grow new and emerging industries, it also
enhances established industries such as the natural resources sector, which benefit from researchdriven innovations that improve efficiency, productivity and sustainability. The current inadequate
funding, combined with a high cost of living in BC, creates a significant obstacle for potential and
current graduate students to overcome. As a result, students choose to study and settle elsewhere.
Other Canadian provinces, such as Ontario, Quebec, and Alberta, have already recognized the benefits
of recruiting top graduate students and currently offer provincial graduate scholarship programs.
Students and universities in BC 1, as well as the BC Select Standing Committee on Finance and Government
Services 2, all agree that a similar program should be created in British Columbia. It’s time to put that
program in place to attract the brightest minds to BC.
PROVINCIAL PHD SCHOLARSHIPS
BRITISH COLUMBIA - $O
ALBERTA - $3,000
MANITOBA - $18,000
ONTARIO - $15,000
QUEBEC - $20,000
BC
AB
MB
ON
QC
NS
NOVA SCOTIA - $15,000
THE ALLIANCE OF BC STUDENTS RECOMMENDS CREATING A
BC GRADUATE SCHOLARSHIP PROGRAM.
1. Opportunity Agenda for BC. Research Universities Council of BC. http://www.rucbc.ca/pdfs/2012-10-18-opportunity-agenda.pdf
2. Report on the 2015 Budget Consultations. Accesssed online at: http://www.leg.bc.ca/cmt/40thParl/session-3/fgs/reports/PDF/Rpt-FGS-40-3-Report-on-Budget-2015-Consultations-2014-NOV-13.pdf
BUILDING COMPLETE AND SUSTAINABLE CAMPUSES
Adding New Student Residence Spaces
Student residence forms an integral part of the university experience for students all across the
province. Living on campus means that more time can be spent studying instead of commuting. It also
provides students with more opportunities to make friends and participate in all aspects of campus life.
Demand for student residence in BC is strong and over 10,000 students each year end up unable to secure
suitable campus housing because there is an insufficient supply of residence spaces.
Post-secondary institutions in BC do not receive government funding to build student residences and
are expected to independently fund the construction and operation of these buildings. Institutions are
ready and willing to take on that challenge, but need access to debt (which will be fully serviced through
the collection of residence fees) in order to pay for the upfront costs of building a new residence. The
provincial government has needlessly restricted institutions’ ability to access these capital funds,
leading to the use of convoluted internal loan schemes which increase costs and limit capacity.
The government should re-examine the policies that are preventing institutions from accessing the
funds needed to build new student residences. Changing these policies incur no cost to the government.
It requires only the removal of bureaucratic red tape which is severely restricting the ability of students
to live on campus.
NO VACANCY 2014 /2015: STUDENTS UNABLE TO SECURE ON-CAMPUS HOUSING DUE TO LACK OF AVAILABILITY
UBC: 5200
SFU: 3000
THE ALLIANCE OF BC STUDENTS RECOMMENDS ALLOWING
BC’S POST-SECONDARY INSTITUTIONS TO EASILY OBTAIN
CAPITAL FUNDING FOR THE PURPOSES OF BUILDING NEW
STUDENT RESIDENCES. THIS WOULD INCUR NO COST TO THE
PROVINCIAL GOVERNMENT.
UVIC: 2700
CREATING A LEVEL PLAYING FIELD IN STUDENT HOUSING
Creating a New Act in British Columbia to Regulate Post-Secondary Housing for Students
Institutionally managed student housing is currently not regulated by provincial law. The Residential
Tenancy Act does not apply to “living accommodation owned or operated by an educational institution
and provided by that institution to its students or employees.” 1
The absence of regulation means that universities are free to increase rent by any amount, even when
institutions make no improvements to the residence. Recently, a number of post-secondary institutions
have proposed significant increases to housing costs. Just as renters must have some degree of cost
certainty from year to year; when planning finances for a multi-year degree program, students should
have a reasonable degree of cost certainty for student housing. We believe that, similar to the Tenancy
Act, residence housing cost increases should be capped at or near to the rate of inflation.
$$$$$$$$$$$$$$$
2015-2016 2016-2017
2017-2018
$$$
$$$$$$$$
In addition to price increases, institutionally provided residence spaces are not subject to the
requirements of the Act with respect to building maintenance and there is no impartial organization
empowered to resolve disputes between the landlord (the institution) and tenants. This means that
students have no recourse against their institutions, unless they can demonstrate that another law or
regulation has been broken, a step that only a small number can afford.
UBC IS PROPOSING HOUSING COST INCREASES OF 20% OR
BETWEEN $840-1120 PER YEAR. MANDATORY MEAL PLANS WILL
ALSO INCREASE BY $295. 2
UVIC HAS PROPOSED A 13% INCREASE IN HOUSING FEES FOR
2015-16, WHICH AMOUNTS TO $416 A YEAR FOR A DOUBLE ROOM
AND $544 FOR A SINGLE ROOM. RENT WILL THEN INCREASE 6%
ANNUALLY IN 2016-17 AND 2017/18 AND THEN 4% IN EACH OF
THE NEXT SIX YEARS.
THE ABCS RECOMMENDS THAT THE GOVERNMENT ENACT
LEGISLATION REGULATING POST-SECONDARY INSTITUTION
PROVIDED HOUSING BASED ON THE RESIDENTIAL TENANCY
ACT, ENSURING COST CERTAINTY FOR THE DURATION OF
THEIR DEGREE AND BASIC MAINTENANCE REQUIREMENTS.
1. http://www.bclaws.ca/civix/document/id/complete/statreg/02078_01#section4
2. “Facts about the housing fee increase,” UBC website (accessed January 30, 2015).
KEEP BASIC EDUCATION FREE
Adult Basic Education
Public education from K-12 is a basic right and is free in every province in
Canada. This is widely understood as the bare minimum for establishing
basic foundations for a healthy and vibrant economy and society. In BC,
Adult Basic Education (ABE) has long been provided at no charge for those
returning to complete high school classes later in life. ABE programs are
meant to advance the education and employment potential of marginalized
groups and individuals seeking to improve their lives; as such, Indigenous
people, immigrants, women, adults with disabilities, and single parents
disproportionately use and benefit from these programs.
In 2002, the BC government initially allowed for institutions to charge
tuition fees for ABE, but quickly found this policy to be counter productive.
The BC government’s 2005 ABE outcomes survey – conducted while ABE
tuition charges were in place – found that the second most cited reason
for those who wanted to pursue ABE, but were not currently doing so,
was “a lack of financial resources”. According to the 2007 Budget, the
BC government considered 36% of adults to have low levels of literacy
in English. In order to address part of the problem, the government
established the Adult Opportunities Action Plan that year, which included
free adult literacy and some ESL as part of ABE. Finally, the 2007 BC
government’s Campus 2020 Report declared “the public interest in
eliminating barriers to participation in post-secondary education requires
that no tuition be charged to any adult learner seeking to upgrade their
education by completing high school courses”. The decision to reverse
course and remove tuition fees for ABE in 2007 was well grounded and had
considerable positive impact to British Columbians and the province as a
whole.
Unfortunately, the BC government announced late in 2014 that institutions
could once again begin charging tuition fees for ABE – including English as
Second Language (ESL) programs.
THE ABCS RECOMMENDS THE GOVERNMENT OF BRITISH
COLUMBIA PROVIDE ADULT BASIC EDUCATION (ABE) AND
ENGLISH AS SECOND LANGUAGE (ESL) AT NO CHARGE TO
STUDENTS, AT A COST OF $7.5 MILLION.
64% WOMEN
36% MEN
12% ABORIGINAL
12% LONG TERM DISABILITY
23% ENGLISH IS NOT FIRST LANGUAGE
72% STUDENTS ARE BELOW POVERTY
LINE
SUPPORT FOR TRADES
Ensuring Trades Programs are Adequately Funded
The current funding model for trades from the Ministry of Advanced
Education does not cover necessary materials costs like lumber or sheet
metal. The cost of raw materials can add an extra burden, especially
for pre-apprenticeship programs. These costs range from $25 to $230
per student beyond their tuition, books, and other fees. As an example,
a level C foundation welder can expect to pay an additional $230 for
materials costs alone. Unlike textbooks, which a student may keep as a
reference for many years, these materials are used up in the process of
the course, serving as necessary learning aids in the same manner as a
skill saw or hammer.
Some institutions have decided to internalize these costs, placing an even further burden on strained
institutional budgets, while others download these costs to students, creating an unforeseen financial
burden on already tight student finances.
$230
THE EXTRA CHARGE TO A LEVEL C
WELDER FOR MATERIALS
Materials acquisition is frequently done in an ad hoc manner, relying on individual instructors to source
their materials. This takes away from instructor preparatory time to focus instead on seeking out
additional resources on tight budgetary leashes. Given the crucial role of trades to the economic growth
of the province, it is important to reduce barriers to trades programs.
THE ABCS RECOMMENDS THE MINISTRY CONDUCT A STUDY
TO DETERMINE THE TOTAL COSTS OF MATERIALS IN TRADES
AND EXPLORE WAYS OF ALTERING THE FUNDING MODEL TO
INCLUDE THOSE COSTS.