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Students still struggling financially as loan grace period ends

Last Updated Sep 24, 2020 at 7:44 am MDT

CALGARY (660 NEWS) – Students in Canada could be facing more financial challenges as the month comes to an end.

The Canada Student Loans grace period is ending, which means about one million borrowers will have to resume paying their loans.

Ottawa suspended repayments from March 30 to Sept. 30, saying no interest would accrue on student loans during that period.

However, Keith Emery with Credit Canada said students are still struggling financially and will continue to.

“We saw a significant rise in unemployment. Amongst that, students aged 20-24, there was a 24 per cent drop in their employment rate. More than one-in-three had a work placement or internship cancelled. A lot of these graduates are still struggling to find paid employment even as the end of the student loan deferral starts to approach.”

RELATED: Students anxious for more time as federal loan repayment freeze winds down

Emery added with the possibility of a second lockdown, student debt should be more flexible to accommodate for the pandemic.

“We need to give people some room to get into that career. A lot of those career starts have been delayed but I think there’s a good chance the situation should resolve itself over the next couple of years so if the government needs to extend some of that leniency into that period, I think it will be good for the economy overall.”

Earlier this month several student groups including the Canadian Alliance of Student Associations called for the moratorium on loans to be extended.

The group said the job market is still reeling from COVID-19, creating stress among students and recent grads juggling loans, high tuition costs and other bills.

Other organizations like the Undergraduates of Canadian Research Intensive Universities called for a two-year grace period for new graduates’ loans.

In its submission for this year’s pre-budget consultations, the group argues an extended grace period would pay off by stimulating Canada‚Äôs economy and assisting students in taking on less debt.

With files from the Canadian Press