Manitoba Goes Prime

  
 
Manitoba students, you just found a lot of money in your pockets! That's the payoff as your province continues to cut interest rates on its student loans.
 
In the past five years, Manitoba student loans have switched from being slightly more expensive than Canada's average to being much cheaper than average.
 
 
Here’s how things have changed:
 
Back in 2008, the lowest rate for Manitoba Student Loans was the ‘prime’ business lending rate + 2.5%. This totaled 8.25% at the time. That was slightly higher than the national mean.
 
Now, the student loan rate has fallen to 3 percent.  And that’s going to save you a bundle.
  
This is not the first time Manitoba has cut student loan rates over the past 5 years.
 
First, it dropped the ‘variable rate’ on student loans by one point. That made it ‘prime’ + 1.5%.
 
And now, it has thrown out that 1.5% surcharge. So the cost for variable Manitoba student loans now is just the going ‘prime’ rate. Right now, that’s 3 percent.
 
This break for students was announced September 12 by Manitoba’s Advance Education and Literacy Minister Erin Selby, as a change in Manitoba’s Student Aid Act.
 
However, Manitoba’s lower rates came into effect earlier, on September 1, 2012.
 
 
What does this rate-cut mean in dollars?
 
Quite a lot, actually. Each student should save hundreds -- or thousands. The exact amount will depend on the size and payment terms of their Manitoba student loans.  
 

Important:  
 
These 3% rates are only for the most common type of student loans (‘floating’-rate, also known as ‘variable’).  
 
In Manitoba, a ‘fixed-rate’ student loan costs an extra 4 percent. That’s 7% at writing.  
 
Also, your Canada Student loans still have the higher rates Manitoba used to charge.

 
© Jeannine Mitchell 2012 – 2014