Student Loans

Student loans are devised to assist Canadian students who aim to complete their post-secondary educational degrees. The federal government has established the Canada Student Loan Program in the support of tertiary education. The separate provinces may also fund their educational programs. In addition, bank institutions offer various kinds of commercial loans which are intended to individuals who attend professional qualification courses.

The Canada Student Loan Programs covers Canadian citizens, residents, and protected persons. Students who enroll full time are eligible for interest free loans. As of 1995, first time receivers may apply for approximately 6.5 years of assistance. Students who decide to continue their studies beyond the Bachelorís degree level may find out that the interest free assistance will cover the entire period of their program. At some point of time, they will not be eligible for the student loan program. Nevertheless, students attending full-time courses will commence repayment after the completion of their degrees. No interest accumulates over the amount of their dues.

Different rules apply to students who enroll on a part-time basis. They do not qualify for interest free loans and pay the interest during the course of their study. Moreover, part-time students are obliged to pay the interest and the principal once they complete their program. Individuals with permanent disabilities as well as students coming from low-income households also qualify for grants.

At present, the Canadian Student loans cover approximately 60 percent of the assessed needs of individuals enrolled in full-time programs. It is important to note that the government has decreased the level of funding available for post-secondary education. In view of this fact, the loan debt accrued by the average student increases. Many individuals who complete their university studies are unable to repay their student loans. Besides bankruptcy, there are a couple of options to adequately manage the accrued debt. Graduates can approach their lending institution: the government, a collection agency, or the banks with a request to arrange a different form of repayment. Another possible solution is to apply for a student loan debt consolidation. In this case, the individuals will pay a single loan at a reduced interest rate. However, they should abstain from using credit cards in order to prevent the accumulation of additional debt. Some financing institutions may, in fact, order the closure of any credit cards.

If debt consolidation is not a viable option, the person may try to file a consumer proposal with the crediting institutions. This is a workable solution for individuals who are able to repay a certain amount of their dues. At the same time, they need an additional period of time to repay all of their debts. They need to contact a licensed bankruptcy trustee who will file the consumer proposal on their behalf. In addition, he or she will offer a free of charge consultation in order to assess the specific circumstances of the debtor. The trustee will point to a suitable strategy for dealing with the student loans. If all options are exhausted, individuals may declare bankruptcy. Student loans which are at least seven years old will be automatically discharged.



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