Student loan debt

To verify your last date of study, contact your federal and provincial loan providers. For Canada Student Loans, you can call 1-888-815-4514.

Student loans generally have better interest rates than most debt consolidation loans, so it might not make sense to consolidate student loan debt. However, if you have other forms of high-interest debt, a debt consolidation loan is always a good option to consider. 

Failing to make your student loan payments will have a negative effect on your credit score. Both Canada Student loans and private lenders will report late payments to the credit bureaus.  

If you don’t make the required loan repayment on student lines of credit or credit cards, the bank can apply to the court to garnish your wages. Both federal and provincial governments also have the power to take your tax refunds and garnish your wages.  

If you’re having trouble keeping up with your Canada Student Loans you can apply for a revision of terms, which will allow you to lower your monthly payment and extend the length of time it will take to repay your loan up to a maximum of 15 years. You can also see if you qualify for income-based repayment adjustments through the federal Repayment Assistance Program.

For government-sponsored student loans, you must wait at least seven years after completing your studies before you can apply for a debt forgiveness program, like a consumer proposal or bankruptcy. After this waiting period, a Licensed Insolvency Trustee may renegotiate or eliminate your student loan debt. Private student loans issued by a bank, however, like student lines of credit or student credit cards, can be forgiven at any point and are treated like any other type of unsecured debt.

In certain situations, a bankruptcy can eliminate your student loans before the seven-year waiting period by applying for the financial hardship provision. If approved, your student loans can be discharged five years after the completion of your studies. Your Licensed Insolvency Trustee can help you determine your eligibility.

Unlike government-sponsored student loans that give you a grace period before you need to make payments, private loans issued by a bank require that you pay the interest charges every month.