Yesterday, the Alberta Government announced a belt-tightening budget directed in part at Alberta post-secondary students. Here’s a summary:

• Funding for post-secondary institutions to be cut from $5.4 billion to $5.1 billion for 2019-20, and a further 12% funding reduction (to $4.8 billion) in 2022-23

• Lifting of the tuition cap allowing for tuition fees to increase 21% over the next three years

• Interest rates on student loans to increase from Canadian Bank Prime to Canadian Bank Prime plus 1%

• Elimination of tuition tax credits

Implications

• Average student debt to rise from $28,000 to about $34,000

• Interest rate increase plus the elimination of tuition tax credits will add anywhere from $2,700 to $4,000 to the average cost of a student loan

• The reduction of institutional funding will inevitably lead to higher tuition, student fees, increases in housing and associated service costs. Large cuts to municipalities will result in higher transportation fees. All this will lead to greater demand for larger loans.

Bottom Line

A post-secondary education is becoming further out of reach for many Canadians. Employers can help by offering The Smart Benefit™ - Y R Plans’ employee benefit and debt reduction strategy which reduces the cost of student debt by as much as 50%.

To learn more about this powerful tool for talent attraction and employee retention, feel free to join our introductory webinar on student loan repayment benefits. It’s coming up on October 31.