This website is a testimony to the problems Canadian Student Loan borrowers experienced from approximately 1996 to 2008 and until their loans were paid off.

The privatization of the Student Loans system by the Chretien and Martin Liberal governments broke the system and defaulted thousands of borrowers who were trying to pay their loans. There were even stories of suicide due to the harassment of borrowers.

Read the report that I prepared back in 2007 here. Canada Student Loans-The Need for Change Fortunately the new Conservative government at the time revamped the program and fixed the system for new borrowers, but borrowers under the previous program were left with ruined credit and continued harassment from debt collectors.

I call on the Canadian Government to apologize to the borrowers affected by this fiasco and make amends.

Unfortunately the Liberal government is again clobbering the Education system with their changes to International Student Visas. Yes, there's a problem, but instead of a well thought out plan, they have pulled the emergency brake on the train causing a derailment. This has introduced unprecedented instability for both private and public education institutions who serve both international and local students.

Universities have been forced to cancel programs and layoff hundreds if not thousands of full-time and contract instructors.

Again, the Liberal government has messed up the education environment.


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nobreath View Drop Down
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Points: 5 		Post Options Post Options   Thanks (0) Thanks(0)   Quote nobreath Quote  Post ReplyReply Direct Link To This Post Topic: looming crisis
    Posted: 25/December/2012 at 3:19pm
I'll try and be concise. I VERY much appreciate all help.

My situation. 40k student loan debt. 6k credit card debt. 10k line of credit debt. Full time job making 55k a year. No car, no real savings or physical assets. Some family help but not much.

In 2012 I experienced a lay-off, major surgery, crashing of my savings, and some personal problems. My credit report is currently bad as I missed about 5-10 various credit payments and I am unable to get any new credit. I am now making minimum payments on my credit.

My student loan is going to collections soon. It is OSAP. I have made no payments on my student loan, I have been unable to. My initial student loan started in 2006, school ended in 2010.

I live in Quebec for 2 years but im from Ontario as is most of my info/mail still. I am also an dual American citizen if this can help me out somehow but have no banking down there.

I have no idea how I am going to get get out of 56k of debt, which is all pretty much coming due in the new year.

Ideas?

1) Bankruptcy, my credit rating already sucks?
2) Open new bank accounts in Canada and the US?
3) ...

Thanks guys.
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nobreath View Drop Down
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Points: 5 		Post Options Post Options   Thanks (0) Thanks(0)   Quote nobreath Quote  Post ReplyReply Direct Link To This Post Posted: 25/December/2012 at 3:21pm
4) Go back to school?
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administrator View Drop Down
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Points: 1798 		Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 26/December/2012 at 8:31am
Sounds like you're in a tough spot but there may be some things to consider.

I wasn't clear on one thing. Are you back working now?

1) If you are not working, you should be applying for Repayment Assistance.  Call the NSLSC and get this started. 

2) As for bankruptcy, you'd have to be out of school for 5 years if hardship, otherwise 7 years for your student loans to be included in your bankruptcy.  Declaring bankruptcy would clear the credit card debt and line of credit debt, but you'd still be left with the student loan debt.  While it may seem like a lot to deal with right now, the consumer debt could be managed. 

3) Declaring bankruptcy might also will impact your student loans and possible future funding so you want to consider that carefully.

4) School might be an option but will it improve your chances of employment and a higher salary? Are you thinking of more student loans?  If so, then your student loans must not be in default if you want to get more funding.

Hope this info is a bit more helpful.  If you are back working now, a consolidation loan on the credit card and line of credit might take some pressure off, because of the interest rate on the credit card.

Anyone else have some suggestions?
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Royal-NCO View Drop Down
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What interest rate are you paying on your credit card and student loan?
 
If you're employed, and your credit rating allows this, you may find it much easier to replace the sum of your late student loan payments and credit card debt with an RRSP loan.  You likely have conisderable room available to contribute to RRSPs  Borrow.  Make the contribution and use the resulting tax refund to clear your credit card and late student loan payments.   If you can then pay off your RRSP loan, you will have a nice savings account to fall back on if you want to return to school in a few years.
 
The value of this really depends on what interest rates you will be paying on each debt type.
 
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Royal-NCO View Drop Down
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Points: 244 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Royal-NCO Quote  Post ReplyReply Direct Link To This Post Posted: 26/December/2012 at 2:46pm
For example: 
 
Royal Banks has an RRSP loan interest rate of only 4.75%, whereas your credit car debt may have an interest rate of over 20%.  Which means it costs as much to service a $5000 credit card debt as it does a 20,000 RRSP loan.  A 20,000 RRSP contribution will give you a $6000 refund on $55,000/yr income. (Very very rough number approximations, by the way)
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Radagast View Drop Down
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Points: 73 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Radagast Quote  Post ReplyReply Direct Link To This Post Posted: 26/December/2012 at 2:54pm
A line of credit is nice due to the ability to make interest-only payments indefinitely. As long as you avoid the trap of doing that forever.

I don't think your debt is too bad, most of it is medium or low interest. Assuming that you *are* currently working... it's definitely fixable. Other than the OSAP being in collections, your situation is fairly similar to mine three years ago, including the debt amounts - and my salary was lower at the time.

"Debt-Free Forever" by Gail Voz-Oxlade is a great book about minimizing your monthly variable expenses and in most cases can get you debt free within three years - or at least consumer debt free.

Most important thing: Don't give up, there is always hope!
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nobreath View Drop Down
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Points: 5 		Post Options Post Options   Thanks (0) Thanks(0)   Quote nobreath Quote  Post ReplyReply Direct Link To This Post Posted: 29/December/2012 at 12:32pm
Hi guys,

Yes I am currently working, full-time, great job at the moment.

I also just checked my credit score, it is 555 (just shy of 'fair').

I doubt going back to school would increase my salary by much at the moment.
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nobreath View Drop Down
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Points: 5 		Post Options Post Options   Thanks (0) Thanks(0)   Quote nobreath Quote  Post ReplyReply Direct Link To This Post Posted: 29/December/2012 at 12:37pm
Im wondering if 16k debt (not including student loan) and 555 credit score are worth declaring bankruptcy over or not. I know I can get out of this but not sure what way is easier I guess (keep in mind I had an extremely bad year and i'm not buying things and simply not paying for them etc).
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