How Do Student Loans Affect Loan Debt In Canada
Most university students graduated with student loan debt. The average student loan debt for both Bachelors and Masters graduates is about $28,000.;
Student loans make up a significant portion of the average Canadians debt. The average student debtor owes about $46,000 in debt, with almost $15,000 of that debt in student loans. Thats almost a third of someones entire debts.;
Debt load is higher for students in Ontario, with $2,301.5 million in student loans for both part-time and full-time students. Graduates in Alberta also face high student loan debt, with $503.3 million in Canada Student loans.;
Revised Forgiveness Applications Available
On Jan. 19, 2021, the SBA and Treasury Department announced a revised Paycheck Protection Program loan forgiveness application Form 3508, which incorporates changes made by the CAA, 2021. At the same time, the SBA published a new three-page “EZ” version of the application for those who:
- Are self-employed and have no employees; or
- Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number of or hours of their employees; or
- Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than two
Repayment Assistance Plan How It Works
If you find it difficult to meet your monthly financial obligations or you are unable to make your student loan debt payments, you can apply to have the federal and your provincial or territorial government help you pay. In Ontario, students needing debt help can apply to Canada Student Loans, the administrator of OSAP debt.
The RAP program may offer interest relief, debt reduction, or debt forgiveness, depending on your financial situation and income status.
You may not need to make payments accounting to more than 20% of your income, or no payment at all, depending on your financial situation. You can apply to RAP as soon as you start making payments to repay your student loans or anytime during repayment. If you are accepted into RAP, the government will pay the interest owing not covered by your revised plan.
Heres how it works. During the first 10 years of your repayment, the government supports the interest costs of your student debts. If, after 10 years, you still qualify, the government may support some of the principal payments as well.
Youre eligible for RAP if you reside in Canada, have been out of school for at least six months, and you are not already in default on your student loans. If you suffer from a permanent disability, you may be eligible for disability-related expenses.
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Sema Loan Forgiveness Program
This is a scholarship and loan forgiveness program that rewards individuals who start a career in the automotive industry. You must work for an employer that is part of the Specialty Equipment MarketAssociation .
Note:;This program is the law, but Congress has failed to allocate money to the program.
Check out some other options for student loan forgiveness for engineering majors.
This program will pay $2,000 toward outstanding student loans, mailed directly to your lender.
You can learn more here.
How Do I Get Student Loan Forgiveness If I Dont Qualify Under Bidens Student Loan Forgiveness
There are several ways to qualify for student loan forgiveness. . Among other student loan forgiveness programs, two popular choices are through either the Public Service Loan Forgiveness program or an income-driven repayment plan. Neither of these programs offer upfront student loan cancellation, so be prepared to wait several years. You can get federal student loan forgiveness through the Public Service Loan Forgiveness program after making 120 monthly student loan payments and meeting other requirements. You can get federal student loan forgiveness through an income-driven repayment plan such as IBR, PAYE, REPAYE and ICR after 20 years or 25 years .
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Student Loan Discharge Programs
Closed school discharge.;You may qualify for loan discharge if your school closes. At the time of closure, you must have been enrolled or have left within 120 days, without receiving a degree. If you qualify, contact your loan servicer to start the application process. Youll need to continue making payments on your loan while your application is being processed. If youre approved, you will no longer have to make loan payments and you may be refunded some or all of the past payments you made on the loan.
Borrower defense to repayment discharge.;Borrowers defrauded by their colleges may qualify for debt relief. Youll need to file a borrower defense to repayment claim with the U.S. Department of Education. If you qualify, you may have your loans automatically discharged, at the discretion of the Education Department, if your school was involved in clear, widespread fraud or misrepresentation that affected a broad group of borrowers.
Total and permanent disability discharge.;If you cannot work due to being totally and permanently disabled, physically or mentally, you may qualify to have your remaining student loan debt canceled. To be eligible, youll need to provide documentation proving your disability. Once your loans are discharged, the government may monitor your finances and disability for three years. If you dont meet requirements during the monitoring period, your loans may be reinstated. Details on the application process are available at disabilitydischarge.com.
Finally Please Help Me Out
Im not kidding when I say that running this site is like having a second full-time job. I spend all my time not at work researching new student loan benefits programs, watching the news, looking at legal changes, and updating or writing new Guides for this site.
And I can only keep doing this if you help me spread the word that this site exists! Ive done well to rank at or near the top of Googles results for years, but some big brands and huge businesses are moving into the space, pushing propaganda instead of advice, and hurting peoples chances of getting effective debt relief.
If this Guide helped you, then please consider giving back to me and the wider student loan borrowing community by sharing a link to my site on your Social Media pages, via Facebook, Twitter, Instagram or anywhere else that you participate, like Reddit, old school Forums, or school-based community groups.
The more people who visit FSLD, the more time I can dedicated to writing Guides like this, and helping people like you.
Thank you for your support!
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Repayment Plans With Loan Forgiveness
If you arent working in a public service position, you may still be able to get a portion of your student debt forgivenbut it will take longer. Federal income-driven repayment plans, which are designed to help graduates who would have trouble making payments within the standard 10-year time frame, also allow for some debt forgiveness after a certain period.
These plans include:
- Income-Based Repayment . Maximum monthly payments will be 10% to 15% of discretionary income. Forgiveness eligibility comes after 20 or 25 years of qualifying payments.
- Income-Contingent Repayment . Payments are recalculated each year based on gross income, family size, and outstanding federal loan balance; generally, they’re 20% of discretionary income. Forgiveness eligibility is after 25 years of qualifying payments.
- Pay As You Earn and Revised Pay As You Earn . Maximum monthly payments will be 10% of discretionary income. Forgiveness eligibility is after 20 years of qualifying payments. The government may even pay part of the interest on the loan.
In addition, if you work for a federal agency, your employer may repay up to $10,000 of your loans per year, with a maximum of $60,000, through the Federal student loan repayment program.
Your student loan servicer handles the repayment of your federal student loans, so work with the servicer to enroll in a repayment plan or change your current plan. You can usually do this online at the servicers website.
Should You Stop Paying Your Student Loans
Should you stop paying your student loans? This is a question student loan borrowers ask, particularly in the context of student loan cancellation. For example, some student loan borrowers think student loans are unfair and too expensive. Until Biden enacts student loan cancellation, they have decided to stop paying their student loans. Is this a good idea? No. Seriously, dont stop paying your student loans because you are waiting for student loan cancellation because student loan cancellation may never happen. When you borrowed student loans, you signed a master promissory note, which include a legal commitment to pay your student loans under the terms and conditions to which you agreed. Dont simply stop paying your student loans. Instead, contact your student loan servicer to discuss potential solutions. For example, if you lost your job or experienced a reduction in income, you may qualify for a monthly payment for your federal student loans as low as $0 per month. By contacting your student loan servicer, you can assess your options, which are likely better than non-payment, which could also adversely impact your credit score.
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What To Do If You’ve Been Contacted By A Scammer
If you’ve gotten a suspicious phone call, voicemail or even a letter that you think is a scam, you don’t necessarily have to take immediate action if you didn’t respond or give out any personal information.
“You absolutely do not have to do anything, if you didn’t give them any information, you should be OK,” said Haile.
You can, however, report it. One option is to file a complaint with the Federal Trade Commission notifying it of the potential scam. Another is to call your state attorney general.
Last, you may also want to check your credit score out of an abundance of caution, said Evans.
Which Program Is Better For You
Ideally, there is not any massive difference between these two programs for;Westwood college loan forgiveness. Both of them will benefit you almost at the same level. That said, I would be a little inclined to go for the closed school loan program. Well, mainly because it will take more time with the application of the;Borrowers Defense Discharge.;Also, I believe that closed school loan forgiveness programs are relatively easier to get approved. Therefore, I would choose it over the first option.;
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John R Justice Student Loan Repayment Program
The John R. Justice Student Loan Repayment Program provides loan repayment assistance for state public defenders and state prosecutors who agree to remain employed as public defenders and prosecutors for at least three years.;
This program provides repayment benefits up to $10,000 in any calendar year or an aggregate total of $60,000 per attorney.;
You can learn more about this program here.
Targeted Eidl Advance: Qualifications
If you are in the first groupthose who applied for and received an EIDL Advance of up to $9,000you may qualify for a Targeted EIDL Advance if you:
- Are located in a low-income community, as defined in section 45D of the Internal Revenue Code; and
- Can demonstrate you suffered a more than 30% reduction in revenue;during an eight-week period beginning on March 2, 2020, or later. You will be asked to provide proof of the more-than-30% revenue reduction.
If you are in the second groupsomeone who applied for an EIDL Advance on or before Dec. 27, 2020, but did not receive oneyou must meet the qualifications above plus one more:
- You must have 300 or fewer employees.;
Any business that would normally be eligible for the EIDL program would potentially be eligible, including sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible.
All applicants may be asked to provide an;IRS Form 4506-T,;which gives the SBA permission to request your tax return information.
The SBA cautions against submitting a duplicate COVID-19 EIDL application. Only prior applicants will be considered for the Targeted EIDL Advance.
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Why You Might Not Get Interest
Loans like the one just described are known as securitized loans, which means “the lender transfers title to the loans to a trust and sells shares in the trust to investors,” Kantrowitz says. “The interest revenue is used to make payments to the investors. Since the loans are held by the trust, the terms of the loans cannot be modified unless the modification is specifically allowed by the terms of the trust. So, it is still a federal loan, with all the benefits and terms intact, but it is not owned by the U.S. Department of Education.”
This is the more complicated explanation as to why your interest rate isn’t 0%. But there’s another twist: A guarantor is a company that reimburses the federal government for defaulted student loans. In this case, the guarantor is the Pennsylvania Higher Education Assistance Agency. PHEAA guaranteed more than $21 billion in loans as of June 30, 2020, according to one of its recent financial statements.
Federal Employee Student Loan Repayment Program
The Federal student loan repayment program permits agencies to repay Federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency.
This plan allows Federal agencies to make payments to the loan holder of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee.
It’s important to note that an employee receiving this benefit must sign a service agreement to remain in the service of the paying agency for a period of at least 3 years.
An employee must reimburse the paying agency for all benefits received if he or she is separated voluntarily or separated involuntarily for misconduct, unacceptable performance, or a negative suitability determination under 5 CFR part 731. ;In addition, an employee must maintain an acceptable level of performance in order to continue to receive repayment benefits.
Furthermore, you must sign up for this program when you’re hired. You can’t go back to your HR department after you’re already employed and ask for it.
You can learn more about this program here.
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Nurse Corps Loan Repayment Program
If you work in an underserved community, you might be eligible for the NURSE Corps Loan Repayment Program. You can get up to 60% of your student loans paid over two years of employment. If you work for a third year, you could qualify for forgiveness toward another 25%.
What are the requirements?
To qualify for the NURSE Corps Loan Repayment Program, you must be a registered nurse, nurse practitioner or nurse faculty member. Nurses must work in a critical shortage area and serve a high-need population. Nurse faculty members must be at an accredited school of nursing.
How do you apply?
Applications are accepted once a year, and guidelines are updated annually. Check the program requirements and guidelines ahead of time and make sure to turn in your application on time.
Heres What You Can Do Now
Until the President signs an executive order or a bill, nothing is certain. Thats why experts say you should hope for the best, but plan for the worst when it comes to your student loan debt. Regardless of what happens with legislation on student loan forgiveness, heres how you can make the most out of the current situation.;
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Think About Refinancing Your Student Loans
Here’s something else I want you to think about: refinancing your student loans. This could be a dope option for you if it would help you increase your debt snowball. The things to keep in mind are:
- It should never cost you anything to refinance.
- You should only get a fixed rate on your loans.
- Your new net interest rate must be lower than your current net rate.
- You should never sign up for a longer repayment period.
- You should never let the joy of a refinancing make you so happy that you take your eye off the goal of getting completely out of debt as soon as possible.
Just be sure to find the right lender to get this done the right way. I recommend Splash Financial to help you refinance your loans.
Honestly, my heart behind all this is that future generations will never even consider student loans as an option. With that mindset, its possible that one day no one will need student loan forgiveness programs!
But if you already have student loans, heres the bottom line: Get on your own forgiveness plan and get out of debt as quickly as you can. Use my Student Loan Payoff Calculator to calculate how quickly you can pay off your loans by making extra payments.
Want to learn more about paying off debt as fast as humanly possible? My latest quick read, Destroy Your Student Loan Debt, will help you learn how to take control of your money and get rid of those loansfor good. Boom.
About the author
Anthony ONeal
Eligibility And The Process
The eligibility condition of this;forgiveness program;is simple. The main condition is proving that the school misled the student. Some borrowers think that they can utilize this program if the loan servicers engage in illegal actions. However, keep in mind that Borrowers Defense rule is applicable only if the misleading party is the school. Besides, the matter should be education-related; personal issues like physical abuse or harassment does not make the borrower eligible.;
Some examples of when this program can be useful are when the school officials lie about the job replacement rates or they use false advertising to attract students to enrollment. In these cases, students need to collect all necessary documents to prove the case. For instance, they can add brochures indicating false information or email communications to support their arguments. Additionally, the applicants should explain the case clearly in the application.
If the application is successful, borrowers will be notified about the;loan discharge;percentage in the notice. Besides, the reasons for rejection are stated in the notice if the result is negative.
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