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BCBoomer 
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Joined: 21/March/2012
Location: BC
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 Topic: Qualify for Repayment Assistance, but can't afford
Posted: 21/March/2012 at 8:00am |
Hi There, I'm a university graduate with a decent incoming repaying several student loans (4 in total). I have taken advantage of the available programs with NSLC and BCSL (I live in BC), such as repayment assistance and interest relief etc. I recently ran into something that I was not expecting. I recently applied to NSL for repayment assistance. Good news - I qualified. Bad news - the suggested payment was higher than what I could afford. Up until now, on this specific loan I had been paying interest only (about $140/mth), mainly because I could not afford to make decent payments on my other loans at the same time. I was informed that I qualified (great!), but needed to pay ($360/mth). I make a decent salary and therefore was told I could "afford" a payment of $502/mth, of which the govt would pay $140. The benefit would be the govt chipping in the $140 in interest. The crappy part is, I can't afford it - leaving my only option to go back to "interest only" status. My question is, is there any way to refute this? I would love to pay what I can afford ($140) and stay in repayment assistance, but I cannot - leaving me to have to put my entire payment toward interest. Does this make sense? I am servicing several loans the best I can - and to be penalized losing my ability to utilize repayment assistance seems like a tragedy. I'm told if I were to just make "the payment I can afford", the loan would be inarrears and the govt's interest portion would not be contributed. This sucks!! Any tips?
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
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Posted: 22/March/2012 at 7:57am |
 BCBoomer wrote:
I'm told if I were to just make "the payment I can afford", the loan would be in arrears and the govt's interest portion would not be contributed. This sucks!! Any tips? |
This illustrates clearly that the National student Service Center does not take into consideration what your financial needs are, and the only thing they care about is the money. It's pretty clear - you said you can't afford it. They basically tell you "tough nuggets, not our problem.". Whose problem is it? THey are the service center, supposed to be looking after you - AND the student loans program. This is the broken system I and many out there have been describing for years.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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BCBoomer
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Posted: 22/March/2012 at 9:16am |
Thanks Johnny, I do agree its a broken system!! When looking for someone to speak to about this, within the govt, all I got was a Tricura representative - no matter what National Student loans number I called. Looks like your advice on this site is spot on - all you are left with is your local MP/MLA. So its farmed out.... and no one cares (who can help).... sadly, I'm not surprised. Like Gail Voz Oxalade has said, I would not feel 1 bit guilty to declare bankruptcy to clear student loans (after 7 year period).... since the govt charges higher interest rates than the banks!!! To me this means one thing - its all about profits - not enabling people to better themselves with education. How about zero interest loans or at least low interest. This Canada is not one I'm proud of. Sad.
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BCBoomer
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Posted: 22/March/2012 at 9:20am |
BTW - the original advice from a Tricura rep was "well just make the payment you can afford!". Luckily I'm not an idiot and dug deeper. I asked what would happen if I just made a payment I could afford; I asked would it go to collections? The very poorly informed rep: "Well sir, I cannot guarantee it would not go to collections". Well what DO you know? I called back and happened to get someone who knew a bit better. He confirmed it would be in arrears and after 9 months sent to collects. Don't trust the phone agents, dig deeper!!
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old hippy
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Posted: 22/March/2012 at 10:48am |
Hi BCBoomer,
Do you have the option of going back to "interest only" payments after applying and qualifying for repayment assistance? I had heard otherwise somewhere, but probably just a rumour. I have never applied for the RAP, but the NSLC have been suggesting it every time I call to renew my interest only. No use explaining to them that their affordable payments are simply not affordable to me, and that I would prefer not to be completely destitute in my retirement years. I know they could care less.
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SolveStudentDebt
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Posted: 23/March/2012 at 3:52am |
Interest is their "interest". It is the business aspect of the student loans program. The moment that the Canada student Loans Program became "for profit", that is where things went to broken mode. The issue is thatit is not broken for them - it is broken for borrowers.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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SolveStudentDebt
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Posted: 23/March/2012 at 4:05am |
It makes money for the government therefore there is a sizeable profit. who exactly benefits from these profits is another mysterious matter. If one were to argue with the government that the system is broken they deny that. This is because it is making money for them, and whoever is in the same bed with them in this lucrative thing of theirs. 
What we do know is that the student loans program is a broken system for Canadians and it knows that in order to fund studies those except for the wealthy class depend on it and most are bound to it for a lifetime of servitude to it, and in many cases with cataclysmic results.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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BCBoomer
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Posted: 23/March/2012 at 4:05am |
Hi Old Hippy - Yes you do have the option of going back to interest only. I was able to completely cancel my Repayment Assistance application over the phone and have them send out a revision of terms doc for me to sign and return. I just have to square up on the interest payment missed while the repayment assistance app was being processed, then the loan is up to date and they'll resume interest only payments. I know what you mean, they don't care. The first person I talked to when discussing the RAP was a women who could only repeat over and over, regardless of my questions "Yes Sir, but willl you be able to make the payment soon?" Now thats frustrating. I wanted information, she didnt care, she wanted my money. Pretty sad. I recommend calling back for another agent if you get one like that. I'm too exhausted with the whole process to bother lodging a complaint or asking for a supervisor. And I'm pretty fiest usually! :) Johnny - thanks for all your comments. They are spot on. Shame its all about the money. You'd think someone would key in of this for their political campaign (how student loan borrowers are put through the ringer). All the same they probably wouldn't follow through in office. Broken for us and not for them - you hit the nail on the head.
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BCBoomer
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Posted: 23/March/2012 at 4:12am |
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Thought I'd mention even though I'm sick and tired of this process, I am going to write a letter to my MP. Since that appears to be the only thing I can do...
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lisamackb
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Posted: 27/March/2012 at 6:24am |
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BC Boomer I often face the same problem....I currently pay interest only, and even then I struggle...I swear it seems that they do not take into consideration that for us here in BC to get a three bedroom place it costs us 1500 a month..its like they are using a generalized formula...it should be another income and expence formula. Often as student loan borrowers we use credit cards and such to help us through our schooling years, and we have to pay for those too. BC has a very high cost of living...sure we could just move and start over again, but that costs alot of money too. Its a vicous circle I find. I make more money great!!! But then we get taxed out our arses, cost of living is outrageous, hydro and gas go up, child tax goes down, and now because we are in a higher tax bracket we get no help from the government to pay our student loans...the bottom ling is when all the income comes in and all the payee's are paid, there is less money left over at the end of it all to pay down our debt....and all because I got a dollar an hour raise. I get 160 more dollars a month but now I have to pay 400 dollars a month rather then 100 in student loans.....hmmmmm....go figure!!!
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old hippy
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Posted: 28/March/2012 at 5:25am |
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Yep, seems they need to be more realistic in calculating their affordable payments - maybe next time they revise the system, but I'm not holding my breath. For now, I'm just hoping the prime rate doesn't increase anytime soon and send those interest only payments through the roof.
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Qualify for Repayment Assistance, but can't afford