Alberta government to cap tuition increases, reduces student loan interest rates

Alberta government to cap tuition increases, reduces student loan interest rates

Alberta’s United Conservative government announced it would cap post-secondary tuition to increase and reduce student loan interest rates in an announcement on Thursday morning.

The changes, which are part of the 2023 Budget, aim to tackle the cost of living crises for post-secondary students and graduates.

Domestic tuition will be capped at two per cent in the 2024-25 academic year and beyond, Advanced Education Minister Demetrios Nicolaides told reporters on Thursday.

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Graduates will see a dip in their student loan repayments: interest rates on student loans have been reduced to only the prime rate, which is currently 6.7 per cent. Previously, the interest rate for student loans was 6.7 per cent plus one per cent.

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The student loan interest-free grace period was also increased from six months to 12 months, which Nicolaides said would give students more time to find employment without having to worry about student loan payments.

Alberta’s Advanced Education Minister Demetrios Nicolaides standing at a podium in a University of Alberta building on Feb. 16, 2023.

Morgan Black/Global News

The income threshold for student loan repayment assistance has also increased from $25,000 a year to $40,000 a year.

“The change is necessary and will help address inflationary pressures by reducing borrowing costs and alleviating repayment risks,” Nicolaides told reporters at a news conference on Thursday.

“I want to ensure that every student can gain the knowledge and skills that they need to live fulfilling lives and develop fulfilling careers.”

Click to play video: 'Alberta government will require annual 'free speech reporting' from post-secondary schools'

Alberta government will require annual ‘free speech reporting’ from post-secondary schools

Matt Yanish, vice-chair of the Council of Alberta University Students, said while the announcement doesn’t solve the cuts in funding to post-secondary education, the new policies are a step in the right direction.

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The UCP’s 2019 budget cut advanced education spending by five per cent compared to 2018. Funding for post-secondary education will be down 12 per cent by 2023.

“This announcement today could not have come at a more critical time. Like all Albertans, students have been heavily impacted by the cost of living crisis,” Yanish said at Thursday’s news conference.

“I’m confident students will benefit from these long-term solutions… Students today are key stakeholders in our province’s economic future.”

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University of Calgary Students’ Union president Nicole Schmidt said she is pleased to see the financial support from the provincial government, but more needs to be done.

“Since 2019, students have endured the largest increases in tuition in Alberta’s history,” Schmidt said in a news release Thursday.

“Today’s announcement, while welcome, is a drop in the bucket when compared to the additional costs students are facing due to government cuts and the inflation crisis.”

Advanced Education critic David Eggen said these measures weren’t enough to help students and criticized the UCP for pushing students further into debt.

Alberta has the highest tuition increases across Canada since the UCP government was formed, he said.

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“Nicolaides himself has argued intensely against a tuition cap, and in favor of increasing interest on student loans. Reversing himself immediately before an election is obviously dishonest and shows Albertans that the UCP simply can’t be trusted,” Eggen said in an emailed statement.

No help for international students

International students, however, do not benefit from the newly announced changes despite facing the same inflationary pressures as domestic students.

International student tuition is often increased at a higher rate compared to domestic tuition. Most international undergraduate students at the University of Calgary will see a 10 per cent increase in their tuition in the 2022-23 academic year.

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Currently, there is no legislation capping tuition fees for international students.

Nicolaides said support and resources for international students are being discussed.

“I’m happy to continue chatting with international students and keep the conversation moving to try and address these affordability issues,” Nicolaides said.

“It’s definitely a priority.”

University of Calgary Students’ Union external vice-president Mateusz Salmassi said the UCP must help international students if it wants to attract more international talent to come to its post-secondary institutions.

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“International students have been completely left behind by this government,” Salmassi said in an emailed statement.

“International tuition remains unregulated and today’s announcement makes it easy for universities to continue using international students as cash cows to fund university operations. this needs to change.”

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