On November 24, the House of Commons unanimously passed a motion calling for an extension of the federal student loan repayment moratorium, which took effect until the end of September, for an additional six months. The endorsed extension would cover October 1, 2020, through May 31, 2021, during which those with federal student loans will not be required to make payments or build interest on their loans.
However, the extension has not been implemented yet by the federal government. Accordingly, the National Student Loans Service Centre is still requiring payments, noting on its website that payments and interest began again on October 1. In an email to borrowers whose loans are due, the centre wrote, “Despite recent media reports, November payment on your loan(s) are due as scheduled.”
Patty Facy, who graduated from U of T in 2020, initiated a petition earlier this month that called on the federal government to extend the student loan non-repayment period, given that it overlapped with the automatic repayment freeze for new graduates. The petition received support from multiple MPs.
Calls for financial relief for recent graduates
“With COVID-19 rates skyrocketing, the stress on young people and recent graduates is incredible. They lost their summer employment, they have few job options, and those available are often low-paying and put them at risk for COVID-19,” said New Democratic Party MP Heather McPherson, who forwarded the motion, in the House of Commons on Tuesday.
In an email to The Varsity, Facy wrote that it was a relief to hear that the House of Commons had passed the motion. “This news is a major relief for Spring 2020 grads struggling to find work and reach a level of financial stability in the current climate of the pandemic,” wrote Facy. She commented that the extension will significantly help many spring graduates who have been struggling to find job placements.
In an email to The Varsity, Marielle Hossack, a spokesperson from the Minister of Employment, Workforce Development and Disability Inclusion’s office, acknowledged that the youth will be at the centre of the recovery, and that the government will “remain committed to supporting students and ensuring youth get the experience and skills they need to succeed.”
Hossack wrote in the statement, “We know students and young Canadians are still facing challenges, and we will continue to do what it takes to be there to support [students] and help them get through these challenging times.”
More support for graduates still needed
The adopted motion, however, still comes with concerns for even newer graduates. “I want to make sure that the students who graduate Fall 2020, or even Spring 2021 if [COVID-19] continues, get these benefits too,” wrote Facy.
Although the House of Commons decision is great news for spring 2020 graduates, she wrote, fall 2020 graduates will still have an overlap between the extra benefit and their normal post-graduation grace period. She believes that the same extra benefit of loan non-repayment should be granted to any students graduating during the pandemic and has continued calling on people to sign the petition, which has gathered over 870 signatures so far.
Another concern is that, although the motion would extend the moratorium on federal student loans, it does not apply to provincial ones. “For Ontario students for example, new grads are still expected to meet their [Ontario Student Assistance Program] payments, because those haven’t been frozen,” wrote Facy. She commented further that the interest on provincial loans is still being charged, which makes the relief incomplete.
Facy wrote that students would like to see the provincial governments follow similar actions to suspend student loan repayment at their level during the COVID-19 pandemic.