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    Student Loan Debt ReliefMany students leave school with high amounts of debt. Unfortunately, post-secondary education continues to increase in cost. When you add to this fact that it’s often tough for people just out of school to find well-paying jobs after they graduate, it’s easy to see how individuals can get trapped in a situation where they’re paying down student loan debt for many, many years after graduation. In fact, on average, it takes more than 10 years to pay off a student loan. This can be a heavy burden on a person. Plus, if you don’t make your loan payments as they become due, this can affect your credit rating which can affect future loan applications for cars, mortgages, further education or other purposes. If you’re in this situation and you’re looking for student loan debt relief, there are a few things that you can do.

    Have a Plan

    When it comes to paying off your student loan debt, you need to have a plan. It helps if you’re able to come up with a plan before you graduate, but it’s never too late to start. Figure out how much you’ll need to pay back and then come up with a budget that works for you and includes these payments. Many provinces offer online calculators that allow you to estimate how much you will need to pay back. You may need to cut back on expenses elsewhere in order to afford your debt repayments. Remember that there is a six-month grace period from when you graduate school to when you have to start making regular student loan payments. Use this period to your advantage, if possible. If you get a job within six months of finishing school, try to save up some money so that you can make your payments starting in that seventh month. Even if you don’t get a job within six months, take this time to plan and take stock of your life before you need to start repaying your debt. In some provinces, you can even apply to have this period extended to a year as long as you meet certain criteria.  

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    Look for Assistance

    If you’re unable to fit your student loan debt repayments into your budget, you may want to look for assistance in handling this debt. One way to do this is to contact the student loan office and explain your situation. They may be able to make your monthly payments more affordable by extending the payment term. If you do this, it will take longer to repay your debt, but you will have smaller monthly payments that may fit into your budget better. There are also official Repayment Assistance Plans that are offered by Canada and by various provinces that offer student loans. A Repayment Assistance Plan is designed to help student loan borrowers who are having difficulties repaying their loans. These programs offer interest relief and debt reduction and help eligible borrowers repay their loans within 15 years. You must apply and be eligible in order to be accepted into a Repayment Assistance Plan. Eligibility is based on having an account in good standing, your family size, your gross family income and other factors. For specific details relating to your student loan situation, contact the provincial office responsible for issuing the loan.

    Can Bankruptcy or Consumer Proposal Help with Student Loan Debt Relief?

    Many people wonder if they can get student loan debt relief by filing for bankruptcy or by submitting a consumer proposal. Basically, this depends on the age of your loan. According to the Bankruptcy and Insolvency Act, student loan debt is eliminated by personal bankruptcy or a consumer proposal if you have been out of school for more than seven years. If your student loan debt is less than seven years old, it will not be discharged by your bankruptcy and it may not be included in a consumer proposal. However, if you are having financial difficulties, these options may still be helpful to you. Having other debts doesn’t leave much money behind to pay down a student loan. If you can reduce the amount that you repay to your other creditors, through a consumer proposal for example, you might find that it is easier to pay down your student loan. Speaking to a licensed insolvency trustee will help you determine if a consumer proposal or filing for personal bankruptcy is the best way to get rid of your debt.