The Canadian government has increased the zero-payment income thresholds for student loans to $40,000.
This enhancement to the Canada Student Financial Assistance Program’s repayment assistance plan means repayment will not be required until borrowers are earning at least $40,000 per year.
The salary threshold will also be reevaluated annually and indexed to inflation to ensure it keeps up with the cost of living.
Additionally, the cap on monthly affordable payments also decreased from 20 per cent to 10 per cent of a borrower’s household income, a move the government says is designed to ensure that no borrower has to pay more than they can reasonably afford.
These changes are expected to help some 180,000 struggling Canadians per year.
“Starting today, more graduates can focus on building their careers instead of worrying about student loans. This is so important. A strong, skilled workforce depends on affordable, accessible education, and this change will ensure more Canadians have more flexibility when paying for school” Carla Qualtrough, Minister of Employment, Workforce Development and Disability Inclusion, said in a news release.
“Raising the income threshold for the repayment assistance plan and indexing it to inflation annually will provide relief for many borrowers struggling with the impacts of inflation. The announced program changes will increase its usage and accessibility for borrowers in need,” Mackenzy Metcalfe, Executive Director of the Canadian Alliance of Student Associations, said in the news release.