There was great celebrations when the province cut interest on student loans in March, but that was quickly dulled by the cut of the tax credit students get for actually staying in the province.
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It is no secret tuition is going steadily going up either. In Nova Scotia, it ranges from $4,700 to $7,000 per year. This is not including living expenses or textbooks, which can easily double these costs.
Nova Scotia also has one of the highest tax rates in Canada, and is on the lower end of the average income scale. This reflects a lack of jobs in many parts of the province.
Cutting the interest on the provincial portion of tuition was a great gesture, but it almost defeats the purpose if the tax credit goes as well. You don't have to live in Nova Scotia once graduated to get the benefit of the interest cut, only have borrowed from the province when you first went to school.
This is also just the provincial portion, which also tends to be the smaller portions of loans. Federal and private loans offer no such relief. You can defer payments in some cases, but you still accrue interest and will eventually have to pay it off.
Diane Whalen, finance minister for the province, has been quoted saying the credit did not encourage graduates to stay in the province. Maybe not, but it certainly didn't hurt. The only way you could get the credit is if you went to university in Nova Scotia and then stayed here. If you go out of province to get educated, you don't get the credit. If you move out of province for work, you don't get the credit.
By the numbers, this looks like a purely cost savings measure. The tax credit cost $49.5 million a year. Interest free loans will only cost $1.6 million. The government said they will invest money into programs to help new graduates and their employers, but it only amounts to about $2.5 million.
Cutting any help to those just out of university is not a good move. Loan repayments are at their highest, and the interest payments are at their most daunting.
The tax credit was not a large help to graduates, but it did help nevertheless. Cutting it just gives new graduates one more reason to leave Nova Scotia, and not look back.