Canadian provinces eliminate interest on student loans

Newfoundland and Labrador have cut the interest rate on provincial student loans to zero to help graduates get out of debt and build wealth faster.

And here's the best part: The elimination of interest is automatic -- no stupid forms to fill out -- and doesn't change the monthly payments.

How does it work? Students just keep sending in their payments, but now 100% goes toward amortizing the loan, allowing them to get out of debt faster.

That saves on administrative costs and ensures that students devote their earnings to getting out of debt -- instead of lowering their monthly payments and buying cars and mixed drinks at trendy bars. On the other hand, the elimination of interest won't provide immediate help to graduates who are struggling with cash flow because the monthly payments won't change.

The Canadian Press reports that students can save up to $1,800 over the life of their loans because of this new program. The savings would be much larger in the United States because student debt loads are so much more significant.