Struggling to pay your student loans? If you have not yet defaulted, but are wondering how you are going to manage, there are some options.
The federal government and each province have different debt relief programs. This article briefly outlines those for B.C. and Canada student loans. To find out about programs for other provinces, check their student loan websites or call their contact number.
Debt relief options for B.C. student loans include:
• Interest relief: You do not make payments for six months and no interest accrues. You can renew for up to 30 months, and in some cases extend it an additional 24 months.
• Principal deferment: You pay only the interest on your loan for a period of time (generally six months at a time, but can be less.)
• Extended amortization: You extend the time over which you pay off your loan, which reduces your monthly payment.
Recent graduates in some professions, such as nursing, midwifery and occupational therapy, can have their B.C. loans forgiven over time by working at publicly funded facilities or in underserved areas of the province. Post-secondary graduates who work in the B.C. Public Service can also see gradual loan forgiveness.
Options for Canada student loans include:
• Repayment assistance plan: Your maximum repayment period is 15 years (10 if you have a disability.) Affordable payments are based on your family income and size. If you have a disability, your disability related expenses are also taken into account.
• Permanent disability benefit: If you have a severe permanent disability, you may be eligible to have your loans immediately forgiven. A severe permanent disability is one that prevents you from working and from participating in post-secondary education.
As with B.C. student loans, you can extend the amortization of your Canada student loan. Contact the National Student Loans Service Centre (NSLSC) or the financial institution holding your loan to discuss your options.
The key is to get in touch with the student loan folks as soon as you start having problems. Once the loan has gone to collections, you are no longer eligible for the debt management programs, and it can be difficult to get your loan reinstated into the student loans program (though it is possible.)
For details about the B.C. programs, contact StudentAid BC at 1-800-561-1818 or visit www.StudentAidBC.ca. For Canada student loans, contact the NSLSC at 1-888-815-4514.
— Amy Taylor is the co-ordinator of the Kootenay Boundary Credit Clinic, a project of Castlegar & District Community Services. The Clinic provides free information and workshops about debt, credit and money management. Call 1-877-565-0013 or go to www.kbcredit.org for more information.