The Ultimate Guide to Student Debt Forgiveness
Student debt is a substantial financial burden for many graduates. The struggle to repay these loans while juggling other responsibilities such as raising a family, paying off mortgage and credit card debts, and securing long-term, sustainable employment often leads to insolvency. This Guide to Student Debt Forgiveness explores various options available to lighten this burden, from deferring payments to negotiating new payment arrangements and government repayment assistance programs.
The Heavy Burden of Student Debt
The average post-secondary student takes over a decade to repay their student debt in full. The financial strain often pushes many towards seeking aid for student debt forgiveness.
Understanding Your Options for Student Debt Relief
Different student debt relief options have different impacts. Some merely defer payments, while others can result in student loan forgiveness. Understanding these options can help you make an informed decision.
Renegotiating Payment Terms
One option is voluntary renegotiation. Contact your student loan lender to negotiate new payment terms that you can afford. This is a viable option if you can afford to repay your loans in full but need temporary payment relief.
Government Repayment Assistance Programs
If you are struggling to keep up with your student loan payments, government repayment assistance programs might be worth considering. These programs can change the term of your loan or provide repayment assistance based on your financial situation.
Revision of Terms
The standard maximum repayment period for student loans in Canada is 114 months or 9.5 years. If you are experiencing a temporary reduction in income, you can contact the Canada Student Loan office to extend the amortization period up to 174 months or 14.5 years.
Repayment Assistance Plan
The Repayment Assistance Plan (RAP) is another payment relief option. This program offers interest relief or debt reduction (forgiveness), depending on your financial situation and income level.
Bankruptcy & Insolvency Act and Student Debt
Government-guaranteed student debt can be discharged under the Bankruptcy & Insolvency Act under certain conditions. This includes the seven-year rule, which allows for the discharge of your student debt if you have been out of school for more than seven years.
Private Student Loan Debt Forgiveness Options
Private loans, including student credit cards or overdrafts are repaid directly to your lender. Any term revisions must be negotiated with your student loan provider. There are no special rules or study period limitations to qualify for loan forgiveness with private student loans.
Seeking Advice from a Licensed Insolvency Trustee
Licensed Insolvency Trustees are the only government regulated experts on debt management and the only professional able to eliminate your student debt through a bankruptcy or proposal.
Wrapping Up
Student debt can be a significant burden, but there are various options available to help manage and potentially forgive this debt. Seeking advice from a Licensed Insolvency Trustee can provide you with a range of options to deal with your student debts.
Remember, everyone’s situation is unique, so it’s important to explore all options and seek professional advice before making a decision. This guide provides a good starting point for understanding the student debt forgiveness landscape.
