Canada Student Loans – New Relief In Sight

Canada Student Loans has announced new relief rules for student loan borrowers who are facing financial duress.

Generally, students who incur student loans during their post-secondary studies must begin to repay their loans within six months of graduating, leaving school or transferring to part time studies.

Repayment Assistance Program

Effective November 1, 2016, under the Repayment Assistance Plan, a borrower may apply to defer any repayment obligations until their earnings reach a certain level. The criteria are based on the total family income and is adjusted according to family size. 

The thresholds are as follows:

Students earning more than the applicable threshold may also be eligible for reduced payments.  Visit the Government of Canada website for more detailed information about the Repayment Assistance Plan.

Canada Student Grants

In addition, the federal government announced increased amounts for the Canada Student Grants, which is a non-repayable financial assistance. The amounts have been increased to:

• $3,000 per year for full-time students from low income families
• $1,200 per year for full-time students from middle income families
• $1,800 per year for part-time students from low income families.

Visit the Government of Canada website for more detailed information on the Canada Student Grant

If you are not eligible for relief under one of the programs noted above and are unable to meet the repayment requirements set by Canada Student Loans or a provincial student loan program, you may want to consider personal bankruptcy or a Consumer Proposal. Either option is available to an individual who has:

• Ended their full time studies at least seven years prior to filing personal bankruptcy or a Consumer Proposal or
• Ended their full time studies at least five years prior to filing personal bankruptcy or a Consumer Proposal and can prove to the bankruptcy court they are experiencing financial hardship due to the student loans.