Posts Tagged ‘canada student loan debt’

Student Loan Debt causing Financial problems for Canada Students

February 18th, 2013
Canada Student Loan Debt

Canada Student Loan Debt

Canada Student loan debt seems to be prevalent everywhere, even for Canadian students looking to make more money when they graduate by pursuing a post secondary education.  Most of the students in Canada are pursuing post secondary education in order to secure a good job and to become a more productive employee. Therefore, a good educational background can help the youngsters in Canada to make more money. A large number of young Canadians consider post secondary education as their right in order to pave the path to secure their future.

Of late, the students and their parents find it extremely difficult to manage their higher educational expenses. Therefore, most of the people rely on Canadian student loans to pay for an increased education. However, as student loans become exorbitant, so many students are failing to pay back the owed amount on time. In this tough economic situation, students have defaulted on payments and compounded their financial situation.

In Canada, the eligibility criteria to obtain a student loan is based on financial need, rather than on good credit or on the ability to pay off the loan. Most of the young students continuously take out student loans without realizing the peril of mounting debt.

According to the statistics in Canada, the average student debt after graduating is $19,000. In their early working years, the graduates are burdened with this overwhelming debt. The mounting interest rates on the owed amount have complicated the financial situation of these graduates and the overwhelming debts adversely affect their financial state for some time.

Well, the financial experts often suggest to pay off the debts as the accruing interest on the principal balance makes it unaffordable to pay off. According to the Canadian bankruptcy law, the borrowers are required to be out of school for 7 years before the loans are forgiven. Therefore, you may have to pay more in the long run if you take more time to pay off these student loans.

Canadian law also states that a former student who defaults on their student loan payments can face the consequences of wage garnishment. The borrowers are required to meet minimum standard to have their wages garnished. The maximum amount of wages that can be garnished is 15%. You need to earn between 220 and 240 Canadian Dollars per week, as it is the minimum income requirement for the borrowers for their wages garnished.

Generally, Canadian student loans are not discharged in bankruptcy.  However, only in exceptional cases the loans are discharged. Therefore, if you’re unable to pay off your student loan debts, you may want to take up some help of a financial expert to eliminate your financial woes.

Canada Student Loan Debt for Canadian Students

October 14th, 2010
canadian student loan debt

Canada Student Loan Debt

If your a Canada student and slowly falling in debt with loan after loan financing your college education, those Canada student loans may seem like a virtual lifesaver at the time so you can stay in school. However, once you have graduated from college, or left school, those loans will become due. Suddenly, Canada student loan debt doesn’t seem like a lifesaver. In fact, those loans could feel more like weights that are pulling you under a sea of debt, making it hard to breathe.

Depending on how long you attended school, and how much you received in grants, bursaries, and scholarships, you could have an astounding amount of Canadian student loan debt facing you six months after your graduation. In fact, that debt could be the largest expense you have each month, and depending on the size of the debt, it could take you all of your working years to repay that debt. You don’t want to feel like you attended college for the purpose of paying off the loans to pay for that education.

Fortunately, you have some options. You could consolidate your Canada student loan debt, creating one payment, which could be lower if you can negotiate a lower interest rate. Before you do this, however, you should check with the administrator of your loan, or the Canadian student loan service centre, to see how much of your loan could be forgiven, or at least significantly reduced.

The first program that you should look into is Interest Relief. This option is available to individuals who are temporarily unable to make their Canada student loan payments due to low income or unemployment. You can get relief from the interest on your loans for a period ranging from six months to thirty months, and this is determined on a case-by-case basis.

If you have long term financial problems, you may be eligible for Debt Reduction in Repayment. This lowers the total amount, or principle that you owe, which reduces the monthly payment, making it more affordable for you. You can actually receive up to three reductions, for a total reduction of approximately $26,000.

You can also do a Revision of Terms, which can decrease your monthly payments, by increasing the length of the loan by up to five years. There is also a program that covers you in the event that you become permanently disabled.

Finally, the Canada Repayment Assistance Plan, which came into effect in 2009, is available to those who have a lot of Canadian student loan debt who are having difficulties in paying them off. Through this program, your loan can be extended, your payments will be adjusted based on your income and expenses, and the loan payment will not exceed 20% of your monthly income. Under this program, you may not even have to make payments until your income increases. Canada loan forgiveness is available to those who become permanently disabled, if they are unable to work, under this program.

For information regarding the repayment of your Canada student loans, or making them more affordable, visit the National Student Loans Service Centre. There are options that will help you get your Canada student loan debt payments under control, making them more affordable.


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