The process of applying for and paying off student loans is simpler, now that the provincial and federal governments have integrated their federal and provincial student loan programs and agreed on a single set of rules and forms.
Students only have to sign one loan agreement and make one monthly payment, rather than two of each. They also now have a single service centre to contact. To provide for this one-student one-loan approach in collaboration with the federal government, the Province has changed some of its rules around B.C. student loan agreement terms, to match federal rules.
While the new system has been in effect since August 2011 for new loan applicants, legislation is required to update the rules for those who received their B.C. student loan funding between August 2000 and August 2011. To that end, the provincial government is today introducing transitional provisions, along with amendments to the Financial Administration Act and the Infants Act in the legislature as Bill 17, the Finance Statutes Amendment Act, 2011.
The transitional provisions clarify the changes to existing student loan agreements and cover such terms as amortization periods, payment dates, and payment frequency.
The Financial Administration Act is being amended to allow the B.C. government to eliminate non-sufficient fund (NSF) fees for student borrowers in order to be consistent with federal rules. This change will benefit all holders of B.C. student loans.
The Infants Act is also being amended to allow a student who is a minor to enter into a student loan agreement without requiring a guarantor. This rule will only apply to students seeking student loan funding for the first time after the effective date of the amendment.
"This new law will make the loan process easier for students and will also save taxpayers' money," said Finance Minister Kevin Falcon in a news release. "By introducing a single system, we're cutting unnecessary red tape and streamlining administration. No one with a student loan will see their monthly payments increase with these changes, and many will see benefits from more flexible repayment terms."
"Helping students access post-secondary education more easily is a priority for the Government of Canada," added Federal Minister of Human Resources and Skills Development Diane Finley. "The integration of federal and provincial student financial assistance programs is one of several measures we are taking to improve our student loan programs and services."
There are about 175,000 people in B.C. who have signed a Master Student Loan Agreement, which is required of all student loan applicants.
Of those, 65,000 are still in school or are still in the post-graduation grace period and therefore do not need to make any payments yet.
As of August 2011, all students seeking loans, or those who want further funding, have been signing the new forms and are already being processed under the new rules.
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