On Feb. 21, the B.C. Liberals released their 2017 budget — the last before the provincial election on May 9. The budget includes increased funding for education, child welfare, and a ‘Prosperity Fund,’ as well as MSP premium cuts for lower income families, tax cuts for small businesses, and a reduction in provincial student loan interest rates — to name a few.
While the budget invites a myriad of important questions, the focus here will be on just one aspect: the break on student debt. Specifically, the budget promises to reduce the interest rate on student loans from the prime rate of plus 2.5 per cent to just the prime rate by August 2017. This is an exciting prospect for many current students, as well as recent graduates struggling to pay off their loans.
But before popping that champagne in celebration, there are some things worth considering.
For one, it should be noted that since the B.C. Liberals came to power in 2001, funding to post-secondary education has fallen dramatically and tuition has risen in response. Student debt would be less of an issue in the first place if it wasn’t for the cuts the B.C. Liberals put into effect years ago.
And is this really a move towards eradicating interest rates on B.C. student loans altogether? Collecting interest, even a small percentage, from the debt of students who need loans is akin to taxing the poor. Leading by example, Newfoundland and Labrador, Nova Scotia, and P.E.I. offer interest-free student loans, and B.C. should be moving towards similar programs. Yet it seems unlikely that Christy Clark is seriously considering implementing such a policy, instead merely providing a bandaid solution to a far more problematic issue.
It’s also important to consider other factors influencing student debt. For example, minimum wage in B.C. remains low, despite high costs of living in Victoria and Vancouver — two of the major university cities in the province. Admittedly, the complexity of these issues make possible solutions murky, but the B.C. Liberals don’t seem to be addressing them in any serious capacity.
Above all, we should be keeping in mind that this is a pre-election budget. It’s designed to gain the votes of people who might be considering voting for another party. In particular, it’s aimed at those voters divided between the B.C. Liberals and the official opposition — the NDP, a party known for its more socialist policies.
While the reduction of student loan interest rates may sound appealing, we must remain weary. If you find that your voting decision is being drastically influenced by the recently proposed budget, remember to keep in mind the last 16 years, or at least the last four. What the B.C. Liberals have done during that time should be the basis for your decision, rather than a weak budget proposed just months before an election.