by The Honourable Murray Coell

Student loans are often a person’s first experience with the complexities of borrowing money – and with repaying their debt once they are finished their post-secondary education.

The British Columbia government is committed to helping all borrowers manage their student loan debt, no matter what program they have chosen to prepare for their future. While people are in full-time studies, the government pays the interest on outstanding student loans, and also has a loan reduction program that forgives some of the principal for students in greatest need.

Once formal studies have ended, both the provincial and federal governments offer programs to help people handle their debt and maintain their credit rating as they start out in their new occupations.

In British Columbia, 90 per cent of former students who have taken out loans make their regular monthly payments on time. But sometimes, through no fault of their own, they may have difficulty with their loan obligations.

This province has programs to help – including interest relief, principal deferment and extended amortization. Most of these programs are available to law students who are articling, as well as students in co-ops or medical residencies.

The B.C. interest relief program helps former students who are having difficulty repaying their B.C. student loan because their income is low. Three criteria are taken into account: their combined minimum monthly payment on the B.C. and Canada student loans, their gross monthly family income, and the number of people in their household.

Although some articling students may qualify for interest relief, most do not, based on their income and total student debt. The average articling student in B.C. earns between $36,700 and $45,000 per year and the average debt for those students with loans is $34,943.

For those whose family income is too high to qualify for interest relief, however, British Columbia has two other programs: principal deferment and extended amortization. The principal deferment program allows payments on the principal of B.C. student loans to be deferred temporarily. Under the extended amortization program, borrowers may extend the repayment period for their B.C. student loan up to 20 years, providing their principal payment does not fall below $25 per month.

The B.C. Student Loan Service Bureau stays in touch with every student who receives a B.C. student loan, and works with them to consolidate their loans and arrange for repayment when they approach graduation.

Comprehensive information is also provided online at www.aved.gov.bc.ca. Students can click on the student financial assistance link to find answers to such questions as “What is capitalized interest?,” “What is amortization?” and “What will my payments be?” A brochure – The Guide to Repaying Your B.C. Student Loan – is sent to every student, and extra copies are available from the Ministry of Advanced Education.

For copies of the brochure, or more information about B.C. student loan debt management, contact the B.C. Ministry of Advanced Education at 604-660-2610 in the B.C. Lower Mainland, 387-6100 in Victoria, and toll-free at 1-800-561-1818 from anywhere else in B.C. or Canada.

The Honourable Murray Coell, Minister of Advanced Education and Minister Responsible for Research and Technology

This article was published in the February 2007 issue of BarTalk. © 2007 The Canadian Bar Association. All rights reserved.