Suggestions for Improvements for Student Loan Programs - Minimum income required to pay loans

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Minimum income required to pay loans

Printed From: CanadaStudentDebt.ca
Category: What Needs to Change?
Forum Name: Suggestions for Improvements for Student Loan Programs
Forum Description: Make suggestions for rule changes etc
URL: https://www.canadastudentdebt.ca/forum_posts.asp?TID=4068
Printed Date: 26/March/2026 at 10:30pm
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Topic: Minimum income required to pay loans

Posted By: bubba
Subject: Minimum income required to pay loans
Date Posted: 09/February/2007 at 12:30pm

If i'm not mistaken the student loan system in Australia works like this: you must earn a minimum amount ($25,000 AUS) per year before you make any payments on your student loans. I think the student loan system in Canada should consider this also. I know you can qualify for interest relief in Canada if your income is low but after you exhaust interest relief aren't you required to pay regardless of how much you earn? Payments should be based on how much you earn for the life of the loan, not just for the time you are eligible for interest relief. This way you can live decently and still pay down your debt instead of simply living just to pay off debt.

Replies:

Posted By: momof2
Date Posted: 11/February/2007 at 2:53am

an income contingent repayment plan makes sense to everyone but the bank.

it would also make sense that persons on any form of income supplements - ie social assistance, pension, disability, child care supplements - should not be expected to repay their loans if the government has already decided we don't make enough money. likewise people who have zero income and do not qualify for any assistance programs should not have to endure harrassment from collection agencies.

further, a spouse's income should be irrelevant to paying one's loans - it's my loan, not my spouse's and they are not legally responsible for the debt, yet their income is considered for interest relief etc.

interest charged on loans needs to be removed and replaced with a fixed cost of borrowing - maybe then people would be able to repay thier loans. a fixed time period to repay the loan would be nice also - rather than having the loan linger forever. student loans should also be able to be discharged in a bankruptcy without having to jump throguh hoops after the ten years has expired.

the whole system needs to be trashed - i mean overhauled.

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professionals built the titanic but amateurs built the ark...

Posted By: frustrated-guy
Date Posted: 12/February/2007 at 10:49am

The UK has an income contingent repayment student loan system like Australia.

In the UK repayment does not begin until one earns more than 15,000 UK Pounds (34,000 Cdn) yearly and payment occurs through your taxes (tax payroll deduction, called Pay as You Earn in UK). Even then repayment is only based on 9% of your income above 34,000 Cdn. They make sure you have at least 34,000 Cdn to live on no matter what.

This seems much fairer than the system in Canada.

See details here:

http://www.studentsupportdirect.co.uk/portal/page?_pageid=1647,468259&_dad=portal&_schema=PROTOCOL - http://www.studentsupportdirect.co.uk/portal/page?_pageid=1647,468259&_dad=portal&_schema=PROTOCOL

Perhaps we could have something like this instigated in Canada.

Posted By: frustrated-guy
Date Posted: 13/February/2007 at 6:27am

The US gov has an income contingent repayment option for some of their student loans to. It appears that an American student can choose the optional income contengent repayment plan if it is best for them.

https://www.dlssonline.com/borrower/QctrHelpPage.do?cmd=initializeContext&APageID=QctrGlosA027 - https://www.dlssonline.com/borrower/QctrHelpPage.do?cmd=initializeContext&APageID=QctrGlosA027

http://www.finaid.org/loans/icr.phtml - http://www.finaid.org/loans/icr.phtml

It would be great if Canada Student Loans offered income contingent repayment as an option. It sure would help many of us in Canada avoid defaults.

Posted By: jrmevans
Date Posted: 22/February/2007 at 6:16am

And if it ever happened, I would hope that it would also apply to people who are currently paying on a student via a collection agency.

I think an income contingent student loan would be the best. Also, have it added as a deduction, from your monthly paycheck, like cpp or EI.

It's just bad that it very unlikely to every happen.

Posted By: SolveStudentDebt
Date Posted: 22/February/2007 at 11:07am

Here is hoping.

Johnny

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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

http://www.solvestudentdebt.com" rel="nofollow - solvestudentdebt.com

Posted By: benny
Date Posted: 26/February/2007 at 6:53am

Ya but with income contigent loans some people like the CFS are still going to complain anyways.
I know student loans are a responsibility and shouldnt be taken lightly but in my opinion they are a different type of loan than anything else and here is why. With a normal loan you are approved based on your ability to re pay, i.e things such as your income are taken into consideration as well as your credit rating and debt to earnings ratio. With a student loan you are given money with no job, no prospect for a job and and minimal credit rating. and they wonder why there are defaults...people need time to get established in their careers to earn decent money. If i took a loan out now i would have no problem making the payments every month, but because it took me a year to get my job i am now punished by harrasing collection agencies every month until my student loan is paid off, how stupid is that?
I am getting student laon fatigue, i have been paying every month for years and its almost paid off but i am so bitter i am thinking about not paying them this month, i will pay them when ever i please, who cares anymore?