Eliminating Interest on Federal Student and Apprentice Loans
Eliminating interest accruing on all current and future Canada Student Loans and Canada Apprentice Loans in repayment starting April 1, 2023. This will not affect interest previously accrued.
The PBO estimates eliminating interest accruing on Canada Student Loans and Canada Apprentice Loans will generate a 5-year total cost of $2.7 billion.
Eliminating interest accruing on all current and future Canada Student Loans and Canada Apprentice Loans in repayment starting April 1, 2023. This will not affect interest previously accrued.
- Estimates are presented on an accrual basis as would appear in the budget and public accounts.
- A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).
- Totals may not add due to rounding
Using PBO’s student financial assistance model, PBO estimated the net expenses of Canada Student Financial Assistance (CSFA) Program under current policy parameters and proposed policy parameters for current and future loans. The difference between the two policy scenarios constitutes the gross cost of the proposed policy change.
The reduction in claims of the non-refundable Student Loan Interest Tax Credit was estimated accordingly to arrive at the net cost.
The main sources of uncertainty relate to loan repayment and employment income projections for program participants. A behavioural response was not incorporated.