Can Student Loans Be Paid Off Through Debt Consolidation?

Paying Student Loan Debt By Consolidating Debts: A Comprehensive Guide

Student loans can be a heavy financial burden, and the question often arises, Can student loans be paid off through debt consolidation? This guide aims to elucidate the possibilities and limitations of this approach.

Understanding Debt Consolidation

Debt consolidation is a financial strategy that combines multiple debts into a single, unified loan. It’s often used to manage high-interest debts and simplify the repayment process.

The Reality of Student Loans and Debt Consolidation

In general, student loan debt doesn’t qualify for a typical Debt Consolidation Management Plan (DCMP). However, there are certain exceptions:


  • If a Loan Rehabilitation application has been rejected
  • If the debt has been sent to collections


These scenarios may allow for the inclusion of student loan debt in a DCMP through a Credit Counselling firm.

The Debt Management Plan (DMP)

In a DMP, the student loan, along with any government interest, must be fully repaid within five years. There is no interest relief or reduction of the debt amount, which means the student loans must be fully paid off.

Exploring Other Options

If repaying the loan within five years isn’t feasible, other options need to be considered. Two of these options are:


Consumer Proposal settlement plan: With this plan, you only have to repay a portion of the student loan.

Bankruptcy: This is a last resort option, and it can only be considered if the student loans have been in repayment for over seven years.


The Repayment Assistance Program (RAP)

Another option worth exploring is the Repayment Assistance Program. This program provides financial relief to individuals struggling with student loan debt.


Student loan debt can be overwhelming, but understanding your options can help alleviate the burden. While debt consolidation may not always be the best solution, there are other avenues to explore that can help manage your student loan debt effectively.

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