I just got a great loan rate in Nova Scotia

Tuesday, April 7th, 2009

The Nova Scotia government has cut out the middleman in its student loan policy, saving its student population hundreds of dollars in interest payments.

Dan Harrison, director of communications at the Nova Scotia Department of Education, explained the adjustment: “Our previous loan program was in a partnership with a bank. What that means is that we would approve applications, then the student would take the application to a bank where they give them the loan and charge an interest rate.

“What we’ve done is raise the money ourselves through capital markets and loan it directly to the student, dropping our interest rate by two per cent.”

This drop makes Nova Scotia the province with the lowest rate for student loans in Canada.

However, Mike Tipping, president of the Dalhousie Student Union and chair of the Alliance of Nova Scotia Student Associations, felt this solved only one part of a larger problem.

“It’s a good step,” he said, “but there’s a lot more that needs to be done.”

According to Tipping, Nova Scotia offers no needs-based grants, which makes student rates in the province higher than the rest of North America.

Though he had his doubts, Tipping was optimistic about the future of postsecondary education in his native province.

“I hope this [reduction], combined with up-front grants, will reduce tuition, allow more students to stay in the province, and make people realize the importance of postsecondary institutions.”

Some may wonder when this spirit of low interest rates will find its way to our part of the country. According to Karen Pypstra, team leader of Student Financial Services at Western, Ontario has a different system altogether.

“Banks haven’t been involved [for] quite some time in Ontario,” Pypstra said. “It’s the National Students Loan Service Centre where students take their loans.”

While the Ontario Student Assistance Program (OSAP) may help Ontarians with both federal and provincial fees, the two per cent interest rate drop in Nova Scotia only affects provincial loans. Harrison was still confident that any province could improve its loan services.

“I think generally any other province that is interested in changes to their program can look to Nova Scotia,” Harrison said. “We’re happy to help them.”

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