People head off to post-secondary education with high hopes for their future. That education comes with a significant price tag. The average student loan debt upon graduation is stated to be $26,000. In my experience, I regularly see people with significantly more than this.

Six months after graduation, repayment is to commence. For those lucky enough to graduate and find a high paying job – this is fine. However, unemployment rates and under-employment of youth is a significant problem. Many graduates find themselves unable to find work or find themselves in low paying jobs where they cannot meet their student loan repayment obligations.

On March 20 the Nova Scotia government announced a program of 0% interest on provincial student loans for eligible individuals. Although this program does not reduce payments, it does reduce the repayment period and is a very positive change.

My biggest advice to people facing difficulty with student loan debt is to ask for help before you fall behind. Canada Student Loans and Nova Scotia Student Loans both have Repayment Assistance Programs (RAP) but one of the key criteria is that you cannot have defaulted on your loan.

If years pass and one is still under a large student loan debt, options under the Bankruptcy and Insolvency Act may be applicable – either a consumer proposal or bankruptcy. Seven years must have passed since the debtor was a full or part time student for the student loan to be dischargeable. There is a hardship clause provision that shortens that timeframe to 5 years, but it is at the Court’s discretion.

If you have any questions on this, please feel free to give me a call.