The party is over. Whether you used your student loans purely for educational purposes or to feed your Starbucks addiction, it’s time to take a step into the brave new world of debt repayment. This guide gives a summary of what’s out there & will make you aware of some short tips on how to reduce your student loans. Please note that policy changes depending on the political party. I’ll do my best to update this guide to current events or you can just go to https://studentaidbc.ca/
Student Loan Types
There are two major types of student loans. Those offered by the provincial & federal government and the ones provided by the bank.
Bank Student Loans
Most banks offer a student line of credit or term loan. The simple difference between them is that you can adjust your payments with a line of credit. If you have a term loan, you pay back the same amount on a monthly basis.
These loans can qualify for debt relief under a consumer proposal or bankruptcy. These loans are with the government, so they qualify as unsecured debt.
The seven-year rule does not apply for bank student loans. For information on this scroll to the bottom.
If you cosigned your loan with your parents and you wish to proceed with debt forgiveness under a proposal or bankruptcy you should let them know. The simple reason is that both of you are responsible for paying back the interest on the debt. For more info contact me
Government Student Loans, Debt Reduction & Grants
RAP (repayment assistance program)
You may have heard about the news report that states that if you have a student loan & are working for less than $25,000 a year you’ll receive student debt relief. To qualify you’ll need to apply through RAP. Canada & BC RAP allows you to repay what you can reasonably afford. You may redo an application every six months until you are no longer eligible or until you pay it all in full.
**special note: If you wish to qualify or speed up the process of your RAP, a stunning rendition of “Mo money, mo problems” by Biggie will not help you in any way – I’ve already tried. For more information for RAP and how to apply, please visit the NSLSC website or call 1-888-815-4514.
Certain individuals qualify for funding. You are not required to pay back a grant so…its like free money. If you’ve been fortunate enough to complete most if not all of your course work you might qualify for one of the two types of completion grants; the BC Completion Grant & the one for graduates. The amount you receive will depend on your situation & what’s left in the government budget.
- your student loans are not already in default, collections, or another repayment program
- you are registered in a full-time study program of at least two academic years at a designated Canadian institution
- if you have completed at least 30 weeks of study and at least 60% of a full course load during the program year are in your first, second, third or fourth year of borrowing from StudentAid BC (and fifth year for students with dependents)
- you have B.C. student loans over the reduction limit established each yearFor more info contact 1-800-561-1818 or https://studentaidbc.ca/repay/repayment-help/bc-completion-grant
Student Loan Forgiveness for Health & Child Care Services
My buddy in physiotherapy told me about this. I was blown away by how good it is for the debt reduction; 20% per year for five years! That’s practically all of the debt. You’ll need to be working in an under-served community for half a decade, but you’ll be debt free, have a lower cost of living & be close to the ski slopes & hiking trails all year round!
If you are in child care services and your occupation is on the list you can stay in a bustling city.
To qualify to go here: https://studentaidbc.ca/repay/repayment-help/bc-loan-forgiveness-program
Student Loan Forgiveness for Public Sector Workers
The Pacific Leaders BC Loan Forgiveness program allows the B.C. portion of your Canada-B.C. integrated student loan to be on “interest-free” status for one year, and you make no further payments on that portion of your loan. They forgive one-third of your total debt after a year.
For info: http://www2.gov.bc.ca/gov/content/careers-myhr/all-employees/career-development/pacific-leaders/bc-loan-forgiveness
Student Loan Forgiveness for Severe Disabilities
When life happens and you get injured there’s some relief. The government will forgive your debts if you’ve injured to the point where you cannot work to repay. For more info you can check this link.
For info: https://studentaidbc.ca/repay/repayment-help/severe-permanent-disability-benefit
Students from Low-Income Family
This program offers a bit of help to low-income families. If you qualify, there’s about $375 per month of study.
Debt Relief for Student Loans Over 7 Years Old
You may apply for debt relief for student loans through insolvency. When your loan is 7 years or older then it qualifies. The government will freeze your interest charges, and you may only need to pay back a fraction of what you owe. As always if you have any questions about repayment programs for debt relief by insolvency you may contact me.