Coalition exposes BC's Principal Deferment Plan
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Topic: Coalition exposes BC's Principal Deferment Plan
Posted By: pogorelichfan
Subject: Coalition exposes BC's Principal Deferment Plan
Date Posted: 22/May/2008 at 5:45am
Below is a copy of a news release we just sent out about the BC government's contentious Principal Deferment Plan. The plan, which allows borrows to pay interest and no principal, is one of the only plans of its kind in Canada - and the government is making a mint off it. Desperate borrowers, unable to obtain interest relief, are instead ending up with loans they never pay off. Figures obtained through a recent FOI show the interest revenues for this program are growing by more than double each and every year since 2003:
Attention News Editors:
FOI: BC collects $215,000 in interest from cash-strapped student loan borrowers
VANCOUVER, May 21 /CNW/ - The Coalition for Student Loan Fairness has
obtained documents through an FOI which show that, since 2003, the
BC government has collected more than $200,000 in interest from student loan
borrowers through its controversial and regressive 'Principal Deferment' plan.
BC's Principal Deferment allows cash-strapped student loan borrowers to
pay only the interest on their loans while deferring their principal.
Since 2003, 643 borrowers have been approved for the program, deferring
balances totaling $196,000. The program continues to generate massive interest
revenues annually, growing from just $1,792.44 collected in 2004, to over
$107,818.00 in 2007.
Coalition spokesperson Julian Benedict says that Principal Deferment
should be abolished, and struggling borrowers should instead be granted
Interest Relief. "Principal Deferment is clearly taking advantage of those
borrowers who are most desperate for any sort of financial relief from massive
student loans."
Adding, "these borrowers aren't paying a dime of their principal balance
while the province collects thousands in interest."
BC currently charges one of the highest interest rates on provincial
loans in the country - 2.5% points above prime. Ontario, Nova Scotia,
Newfoundland and Labrador, all charge less in interest on their provincial
loans.
For further information: Julian Benedict, CSLF, (604) 728-2067,
www.studentloanfairness.ca
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