Canadian students are also facing debt from student loans from Federal and Provincial government agencies and private agencies. Paying student loans is a big challenge, and what helps are available, what alternatives are, how to repay the loans, and what relief strategies are implemented by the government and others, by and large, are vital things to know in today’s post.
Options for Managing Student Loan Debt in Canada
There are two known legal options to deal with student loans in Canada. If you want to work with these options, you must work with a licensed insolvency trustee. It will stop collection and taxes at once.
Consolidate Student Loans in a Consumer Proposal:
If you have some capacity to repay your student loans, a consumer proposal is an ideal alternative to save your face from a bad credit score for a long time. Some advantages of a consumer proposal are:
- It requires no further borrowing.
- There is no additional interest charge.
- It consolidates all debts at once, including student loans and credit card debt.
- Consumer proposal offers are tailored to your unique situations.
- You must repay 30-70% of the total balance in the consumer proposal settlement.
- The remainder may be forgiven or “written off” by lenders.
Discharge Student Loans in Bankruptcy:
However, bankruptcy is not a good alternative because it spoils your credit score in the long term. Personal bankruptcy can write off student loans and other debts, including
- Credit cards
- Lines of credit
- Payday loans
There are many federal and provincial relief strategies to alleviate the burden of student loans, but hardship provision is an excellent choice for many. The program is available through the Canada Student Loans Program (CSLP).
Student Hardship Provision is a loan rehabilitation provision that temporarily pauses loan repayment to provide short-term relief. So, it is not a long-term solution for student loan repayment. Please keep in mind that the student hardship provision is a temporary relief, not to forgive or write off the total loan.
SCG-PDSE (Canada Student Grants for Services and Equipment for Persons with Permanent Disability):
It provides financial assistance to students with permanent disability for services and equipment needed for post-secondary studies.
Repayment Assistance Plan (RAP):
The government of Canada offers students to repay their loans through the RAP scheme.
- Depending on your income, you may qualify for reduced or no payment.
- The government pays any interest owing on the federal part of your loan, which your reduced payment cannot cover.
- The scheme starts to pay down the principal and any remaining interest after 60 months of RAP or ten years after you finish school.
You can apply for RAP as soon as you begin your student loan repayment and must reapply every six months to stay eligible.
Who Can Help You?
Credit720 is a dependable agency to help you to gain student debt solutions. Our services contain:
Credit Counseling Services Surrey
Credit720 offers credit counseling services in Surrey, Canada. We have expert counselors ready to help you with student loan-related problems.