BC Proposed Legislation for Defaulted Student Loans

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The provincial government has proposed legislation to expand ICBC’s ability to refuse driver’s licences to those who default on their student loans. Zachary Crispin, the chairperson of the Canadian Federation of Students B.C., has said the proposed change is ‘troubling’. “If we take away people’s driver’s licences because they’re having a hard time paying back their student loan, they’re going to lose their jobs. And that means they’re going to default more often,” he said. “So the government is essentially ensuring that people are going to lose their jobs, because they’re already having a hard time paying down their student debt.” The proposed legislation said it will give 30 days’ notice after warning letters have been sent before the ICBC will be notified. “The refuse-to-issue provision is a last-resort measure to collect on outstanding debt,” said Brennan Clarke, a spokesperson with the department of finance. “It will only apply to student loan borrowers whose accounts have been out of good standing for more than a year.” This will be the first time such an action will be taken out against this sort of debt. Across Canada, DMV databases are already linked to collect outstanding traffic related fines. Credit Collections will update the story as it unfolds.




  • Scorpio Twin

    I am a 68 year old senior with several disabilities. I was approved for federal disability 8 years ago. I received a letter yesterday from CRA demanding payment close to $3,000 for a British Columbia student loan incurred back before 2002. I cannot afford anything to repay this back. I would love to be working but that is just not possible. As it is I do not have enough to live on. What I am worried about is CRA just reaching into my bank account and taking the money, even though the only money that is in my account is my OAS and CPP, and I am always in the red. How do I resolve this? Thanks.

    • Adrian

      The CRA is not to be messed with and they do collect for the Canada portion of student loans. If they are demanding payment you have to act as soon as possible. On the BC student aid website there is a link to the Repayment assistance plan for borrowers with a permanent disability. Try there first. If this does not apply to you and you cannot find any option to pay consider speaking to a bankruptcy trustee about a consumer proposal. The CRA have a lot of power for debt collection and they can make your life a living hell. Here is the link:

      https://studentaidbc.ca/repay/repayment-help/repayment-assistance-plan-borrowers-permanent-disability

      • Scorpio Twin

        Thanks for the quick reply. This is not for the Canada portion of my student loan. That has been dealt with and is clear. This is for the BC Student loan part. I actually thought this had been dealt with too. I will get in touch with someone immediately who can help me. I had read just a short while ago that the BC government was going after defaulted student loans, loans from years ago, and even from people with severe disabilities. Also BC government joined with CRA to accomplish this.

  • andyoutside

    Hi, I am unable to pay for my student loans. They are from Ontario, OSAP Provincial and of course the Federal part. I am a dual citizine; Canadian, European, and no longer live in beautiful Canada although I’ve spent most of my student and working life there. I will I be returning to Canada any time soon if at all. I have been financially strapped over the years and have not paid anything back. I finished my studies over 3 years ago and have had no contact with OSAP or their Wolfes i.e. Collection agency in that time. My questions are; if I don’t pay the Loans back will it affect my old age pension in 25 years when I apply for it? Can they still collect, my loan plus interest, should I move back in 10 years? Does the debt stay on my record for how long?I just don’t want to be riddled with debt and interest over that time period it would be tens of thousands in interest. I’ve read there is a limit on debt retrieval i.e how long they can come after you, but does the debt stay with you your whole life? i.e. do you have to pay it back even after 10 years or does it get washed away so to speak?
    To sum it up do I have to pay the monster of a debt back? if I don pay it back what possible problems could I face in the future?

  • kim

    I am in Saskatchewan and CRA have been collecting my income tax returns for years to pay off student loan debt and I am unable to afford to make payments to them as I am a single mother of three divorced and still fighting court battles with my ex husband. I live pay check to paycheck is there any options for me in Saskatchewan as I am not being contacted by the CRA legal department. My student loan was from over ten years ago and I have since been through a bankruptcy and this debt remains is there no statue of limitations on this?