Canadian student loan payment deferrals are now at approximately $11 billion, according to the federal government
Hundreds of thousands of Canadian borrowers who still have student loan obligations are expected to resume making payments soon, despite a less-than-hospitable labour market for new graduates.
Data from the federal government showed that nearly 1 million young Canadians had around $11 billion in student loan payment deferrals, covering the period from March 30 to Sep. 30.
The situation could lead to a vicious cycle for fresh graduates who are at this point struggling to find regular employment, as they might be forced to focus on paying off their debt instead of investing on more vital needs, said Bryn de Chastelain, chair of the Canadian Alliance of Student Associations (CASA).
“One hundred per cent, students are going to be in a difficult financial position,” de Chastelain told The Financial Post. “And that’s because a lot of the support that the federal government has put in place for students was meant to help us get through the summer.”
CASA, along with the Undergraduates of Canadian Research-Intensive Universities (UCRU) group, called for an extension of loan payment deferrals, as well as a two-year moratorium on all federal student loans.
This elbow room would “assist students searching for good jobs while taking on less debt, supporting Canadians and stimulating the Canadian economy in response to COVID-19,” UCRU said.
A recent CASA poll found that a significant share of post-secondary students who qualified for either the Canada Emergency Student Benefit or the Canada Emergency Response Benefit “don’t think [the cheques] will be enough to get them through the Fall 2020 semester, let alone beyond.”
“There is still significant concern about whether students will be in a position to start repaying those loans,” de Chastelain said.
