Home COVID-19 Pandemic Could COVID-19 finally bring about student loan forgiveness?

Could COVID-19 finally bring about student loan forgiveness?

by Nojoud Al Mallees

Politicians, advocacy groups, and policy experts are calling on governments to do no more for students and provide debt relief for new graduates. 

Students graduating during the pandemic are facing the burden of student loans along with high unemployment numbers. (Courtesy of Alice Pasqual/Unsplash)

New graduates and students in their last year of university are calling for student loan forgiveness as the economic downturn brought on by COVID-19 continues to disproportionately affect youth 24 years and under.  

Student loan forgiveness has become a hot topic on social media because of politicians in the United States like Rep. Ilhan Omar (D-Minn.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) calling for the abolishment of student loan debt. 

In Canada, half of graduates in 2015 graduated with a median amount of $17,500 in student loans, according to Statistics Canada. Three years later, only one third of these graduates had paid off their loans in full. 

The burden of student loans can affect what types of jobs and risks new graduates take on. “I think for a lot of people, including me, you feel obligated to take what comes your way. You don’t want to pursue your passion if it pays slightly less. You’re just inclined to take what pays you more because you factor in, ‘ok every month i have to pay this much for my student loan,” said Leen Blaibleh, a master of journalism student at Ryerson University expecting to graduate with around $30,000 in student loans in the spring. 

“I think the first step is to do student debt forgiveness and then ideally we’d move in the direction [where] we don’t have to pay for school,” Blaibleh said.

Student groups in Canada have been demanding additional support for post-secondary students since the beginning of the pandemic, and were successful at securing pandemic benefits over the summer for students.

Alannah Mckay, treasurer for the Canadian Federation of Students (CFS), says the federal government has not done enough since the introduction of the Canada Student Emergency Benefit to support students.

“We haven’t seen much support from the federal government when it comes to post-secondary education. We are asking that students be a priority because we see that tuition is increasing even though [studies] are online,” said Mckay. 

As part of their advocacy work, the CFS has been calling on the federal government for student debt relief along with other measures to support students.  “Debt forgiveness will impact a lot of racialized and marginalized individuals and will greatly benefit them,” said Mckay.

After months of panic from students over the expiration of the moratorium on student loans, the House of Commons recently passed a motion calling on extension until May 31, 2021. The demand to extend the freeze on repayments comes at a time of high unemployment for youth — in October, the unemployment rate for those between the ages of 20-24 was 18 per cent 

While the federal government has yet to act on this motion, it has recently taken other steps to alleviate financial pressures on students. In the Fall Economic Statement released on Monday, the federal government also proposed to eliminate interest on repayment of the federal portion of student loans for the 2021-22 fiscal year. This interest freeze will provide $329.4 million in relief for 1.4 million Canadians. 

Debt forgiveness for students is not a theoretical proposal. Last summer, Nova Scotia forgave $8 million in student loans for new graduates. Nova Scotia Labour and Advanced Education Minister Labi Kousoulis said in a press release that the program would put “money back in [students’] pockets so they can focus on next steps after post-secondary education”.  

Creig Lamb, a senior policy analyst at the Brookfield Institute for Innovation and Entrepreneurship recently wrote an op-ed in The Globe and Mail advocating for student loan forgiveness as a mechanism to drive up entrepreneurship as Canada charts its economic recovery. 

When it comes to political willpower, Lamb says there is a real opportunity for experimentation with loan forgiveness right now. “We’re seeing governments explore mechanisms to get money out to people and deliver policies in a way that we haven’t seen in the past,” he said. 

In his piece, Lamb explains, “To graduates saddled with large debt loads, entrepreneurship might not seem like a viable option. And yet Canada’s future success depends, at least partly, on translating the world-class talent coming out of our postsecondary system into new businesses, whether they succeed, or fail, or land somewhere in between.”

CORRECTION: An earlier version of this article stated that the moratorium on student loan repayments was extended until May 31, 2021. This is inaccurate; a motion was passed in the House of Commons calling for the freeze to be extended.

This article may have been created with the use of AI software such as Google Docs, Grammarly, and/or Otter.ai for transcription.

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