Alberta Progressive Conservative plan to cut student loan interest

If elected, the Alberta Progressive Conservative Party will cut student loan interest. The party unveiled its post-secondary education platform Monday to a lack of fanfare.

Alberta Premier Ed Stelmach, standing in front of 200 Tory supporters Monday, also promised to limit annual tuition increases to the rate of inflation But he got no applause from the partisan crowd.

Compared to the Alberta Liberal’s plan to cut tuition by $1,000 if elected to government, Stelmach’s tuition plan is fairly modest.

Stelmach’s government also pledged to slash student loan interest rates by 2.5 per cent, bring it in line with the prime lending rate. The Liberals have echoed this promise.

Opinion polls show Stelmach’s Progressive Conservative Party enjoying over 50 per cent voter support and the party is expected to easily win re-election.

Julian Benedict, co-founder of the Coalition for Student Loan Fairness, applauded the act. “The move shows a greater emphasis on the needs of student loan borrowers and reflects a genuine shift to improve programs for borrowers across the country,” he said.

Nova Scotia recently lowered their interest rate to the governments cost of borrowing for low-income graduates. This amount varies but is generally 1 per cent below prime.

These policy changes only effect the provincial portion of student loans. The majority of borrowers’ student loans are federal student loans. Federal loans continue to charge 2.5 per cent above prime.

Federal Human Resources Minister Monte Solberg has hinted that the federal rate is under review. He has promised policy changes to the Canada Student Loan Program in the 2008 federal budget to be announced February 26.

Benedict is optimistic about the upcoming federal budget. “We’re hoping that the government will come through with an ombudsperson office, significant interest rate cuts, and better interest relief and debt reduction programs.”

British Columbia’s 2008 budget, announced February 19, did not include any student loan interest relief. The floating interest rate for British Columbia student loans remains at 2.5 per cent above prime while the fixed rate is 5 per cent above prime.