Many students can’t afford to meet their expected monthly loan payments. While some have several years left in repaying the loan, others are already at a point where they have no other choice but to seek debt relief in Canada for student loans.
Student loans are by far the most sought-after among all financial loans. Being one of the features that define a university graduate, student loans – for those who financed their studies through them – are not easily forgone.
However, at times like these, when the financial obligation is too heavy to bear, and the time for repayments seems to be endless. This article will talk about whether it’s possible to get debt relief in Canada for student loans or not, so keep reading:
No, You Cannot Get Complete Debt Relief in Canada for Student Loans – BUT, You’ve Got Options:
There are over 1.7 million students with student loan debt in Canada, and each of them owes an average of $26,075. This means there’s over $18 billion in active student debt. Now, if the government decides to forgive these loans completely, it can be an economic catastrophe.
However, this doesn’t mean the government of Canada has left its pupils hanging; there are other ways to get debt relief in Canada for student loans other than complete forgiveness. Let’s look at them below:
If seven years have passed since your date of graduation, you can declare bankruptcy, and if executed successfully, you will be discharged from the debt.
Remember, this only applies if seven years have passed since you graduated.
You can also go for term revision, and most people with student debt are eligible for this. Here are the three possible outcomes of terms revision:
- Temporary payment decrease: This is where you can extend the loan term permanently to reduce the overall monthly payments.
- Permanent Term Extension: If you want the monthly payments to reduce, even more, you can go for a permanent term extension and significantly lower the payments—however, the interest increase over time.
- Interest-Only: You can opt to make interest-only payments for up to 12 months. This will not reduce your monthly payment amount, but you won’t be able to get any more principal after that.
Repayment Assistance Plan:
The government offers a repayment assistance plan as a part of debt relief in Canada for student loans. If you get accepted, you will not have to make any payments going over 20% of your income.
Furthermore, any interest owed that’s not covered by the revised payment plan will be paid by the Government. They will also pay any interest costs and principal exceeding your monthly payments.
Although you cannot have your debt completely forgiven except for filing for bankruptcy if seven years have passed from graduation, there are still plenty of good options for debt relief in Canada for student loans. Make sure to evaluate your finances before going for any of them; a professional debt consultant can better guide you here.