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Time to stop making money off of student loans: Mungall

Nelson Daily Staff
By Nelson Daily Staff
May 30th, 2011

The provincial government is making 3.5 per cent off of the student loans it extends to B.C.’s post-secondary school population, says the MLA for Nelson-Creston.

Michelle Mungall, critic for Advanced Education, Youth and Labour Market development, found that the Province was profiting off of low-income students who need loans to go to school.

During the budget estimates debate for Advanced Education, mungall found there was a 3.5 per cent “mark up” on the loans the province issued.

“The BC Liberal government is borrowing money for students loans at prime minus 1 per cent, then turning it around to students at prime plus 2.5 per cent,” said Mungall. “BC has the highest student loan interest rate in the country, one of the highest student debt loads and the BC Liberals are profiting from it.”

When minister Naomi Yamamoto initially stated that revenue from student loans go into one of the few grant programs the province has for students with disabilities, Mungall questioned the legitimacy of generating revenue from low-income students’ loans for grants for low-income students.

However, this further uncovered that the revenue from student loans does not in fact fund student grants. Rather, it goes into general revenue.

Mungall also asked about student grants, noting that most of the 2,500 full-time equivalent students at Selkirk College don’t have access to financial needs-based grants from the province.

Since 2001, BC Liberals have been cutting funding for post-secondary grants so that now they are about half of what they were in 2001, said Mungall.

“BC has the lowest level of student grants in Canada. Couple that with the highest interest rate on loans, and we shouldn’t be surprised that student food banks are seeing more and more clients,” she said.

To make post secondary education accessible and affordable for BC families, the BCNDP have said they would eliminate interest on students loans and increase student grants by $100 million.

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