Despite the implementation of interest waivers and favorable repayment terms, student loan write-offs in Canada continue to exceed $160 million annually, according to a federal report. Blacklock's Reporter says auditors attribute this trend to ongoing financial difficulties faced by borrowers.“Data collected suggest borrowers’ repayment difficulties, namely delinquency, default, or participation in the Repayment Assistance Plan, are the result of precarious and unstable financial situations,” stated the Department of Social Development's report, Evaluation Of The Canada Student Financial Assistance Program: Loan Repayment.The report highlighted that “the average Canada Student Loan balance for full-time students at the time of leaving school has been on the rise over the past ten years.” The average student debt to taxpayers was $15,578 upon graduation.In 2021, student loan write-offs reached $185.5 million, despite the suspension of interest payments. In 2022, write-offs amounted to $168.8 million, the same year Parliament passed Bill C-32, which permanently amended the Canada Student Loans Act to eliminate interest, effective April 1 of that year. Figures for 2023 write-offs have not been disclosed.The report estimated that 763,000 college and university students receive $6.2 billion in federal aid annually, including $2.9 billion in loans to approximately 558,000 students.Under the program, students are required to begin repaying their loans within six months of completing their studies, with loans typically repayable over 9.5 years. Borrowers facing financial hardship can apply for the Repayment Assistance Plan, which is renewable every six months and offers “affordable payments” over 15 years based on income and other debts.“When there are missed payments, borrowers’ loans are considered to be delinquent or in arrears,” the report explained. “A loan that remains in arrears for more than 270 days is classified as in default and is referred to the Canada Revenue Agency for collection.”Defaults accounted for about 12% of loans, according to auditors. Most defaulters owed $10,000 or less, as indicated in an Inquiry Of Ministry tabled in the Commons on February 9.“A total of 264,194 Canada Student Financial Assistance Program debts totaling $2.95 billion were in collection with the Canada Revenue Agency,” the Inquiry noted. “This does not include those debts that are in good standing.”
Despite the implementation of interest waivers and favorable repayment terms, student loan write-offs in Canada continue to exceed $160 million annually, according to a federal report. Blacklock's Reporter says auditors attribute this trend to ongoing financial difficulties faced by borrowers.“Data collected suggest borrowers’ repayment difficulties, namely delinquency, default, or participation in the Repayment Assistance Plan, are the result of precarious and unstable financial situations,” stated the Department of Social Development's report, Evaluation Of The Canada Student Financial Assistance Program: Loan Repayment.The report highlighted that “the average Canada Student Loan balance for full-time students at the time of leaving school has been on the rise over the past ten years.” The average student debt to taxpayers was $15,578 upon graduation.In 2021, student loan write-offs reached $185.5 million, despite the suspension of interest payments. In 2022, write-offs amounted to $168.8 million, the same year Parliament passed Bill C-32, which permanently amended the Canada Student Loans Act to eliminate interest, effective April 1 of that year. Figures for 2023 write-offs have not been disclosed.The report estimated that 763,000 college and university students receive $6.2 billion in federal aid annually, including $2.9 billion in loans to approximately 558,000 students.Under the program, students are required to begin repaying their loans within six months of completing their studies, with loans typically repayable over 9.5 years. Borrowers facing financial hardship can apply for the Repayment Assistance Plan, which is renewable every six months and offers “affordable payments” over 15 years based on income and other debts.“When there are missed payments, borrowers’ loans are considered to be delinquent or in arrears,” the report explained. “A loan that remains in arrears for more than 270 days is classified as in default and is referred to the Canada Revenue Agency for collection.”Defaults accounted for about 12% of loans, according to auditors. Most defaulters owed $10,000 or less, as indicated in an Inquiry Of Ministry tabled in the Commons on February 9.“A total of 264,194 Canada Student Financial Assistance Program debts totaling $2.95 billion were in collection with the Canada Revenue Agency,” the Inquiry noted. “This does not include those debts that are in good standing.”
