Archived Urgent Help Needed Posts - What is the process for clearing OSAP default?

What is the process for clearing OSAP default?

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Topic: What is the process for clearing OSAP default?

Posted By: badfish
Subject: What is the process for clearing OSAP default?
Date Posted: 02/March/2013 at 8:16pm

Hi there,

I am looking for information about clearing an OSAP default. I went to school from 2004-2006 with OSAP loans and then dropped out from a combination of disability and poverty issues. I didn't know what was going on or how to handle the loan, so I never consolidated my loan and after six months it went into default. It was in collections and I made sporadic payments to the collection agency from 2007-2009, but I have no record of them. I also have no record of my income from that period (I lived in poverty on and off welfare and working under the table, with a spouse who lived off my income). When I ended the marriage, I ended it in a hurry, so I have no documentation of anything and no idea where to start. I did file taxes last year, but hadn't filed them since 2007.

In 2010 I ended my marriage, turned my situation around and returned to school, paying cash for courses. I completed the BA and now I have an offer of acceptance for an MA program. But of course I am not eligible for OSAP or OGS.

I have some limited income now (not much, but I could squeeze out a couple thousand in a lump sum or a couple hundred a month), but I have no idea how to clear the default on my OSAP loan. I owe about $22,000, and last time I talked to the collection agency about $7000 was in default. My questions are:

- if I settle the defaulted amount, will the loan be considered in good standing, or do I have to repay the entire $22,000?

- are there any measures I can take to get them to reduce the amount owing and put it in a payment plan?

- what is the process for dealing with this?

Thanks!

Replies:

Posted By: mupto
Date Posted: 03/March/2013 at 2:03pm

They wont reduce with you. CRA is the only entity that has the power to reduce any federal/Canada student debt. Any request in reduction must be demonstrated.

If you have Ontario/provincial loans they are collectable until the end of time, and interest keeps piling up. Federal/Canada loans are barred from collection after a number of years of no contact/acknowledgement from the borrower.

Basically if you cant pay your Osap(Ontario and Nova Scotia, are only loans that are collectable forever) the only way out is some demonstration of extreme disability that is life long or bankruptcy after 7years from the end of study date (month after you last attended) from which your loans were used for schooling.

I hate student loans.

Posted By: danshadow
Date Posted: 22/September/2013 at 4:22am

Hello,

I am in almost identical circumstances, and was wondering if you have found any solution to this problem yet??

I remember a couple years ago someone mentioned something about a "Consumer Debt Proposal" where you pay a lump sum to finalize your debt but I have been unable to learn anything about this.