Student Loans

Do you know someone with Student Loans?

Please note the following important information, as per Rumanek Blog - Student Loans

Student loans are provided by the Government to encourage persons interested in pursuing a post-secondary education. Federal and Provincial Governments work with each other under a contractual framework for receipt and disbursement of funds by the Province for this purpose.

Re-payment of Student loans

The repayment period for the OSAP loan is 10 years. This can be extended for a period of 15 years by application and by demonstrating sufficient cause by the applicant. The student loan however, will become due and payable only after the student becomes a graduate. This is a key feature that makes Government programs such as OSAP more appealing to students as compared to loans from a private institution, where at the minimum, interest portions on the loan amounts become due immediately.

Students who take OSAP are provided with a grace period of 6(six) months after the time they cease to be students. The Loan becomes payable after this period.

Nevertheless, re-payment of student loans remains mandatory. Stringent measures are adopted by the Government to ensure re-payment of student loans, as failure to repay student loans jeopardizes the loan system resulting in large deficit of government funds. This hinders the ability of future students to benefit from government financial aid.

Non-repayment of student loans can cause severe financial consequences and legal consequences such as garnishment of wages, and bad credit rating to defaulting individuals.
  
View of the Courts
Obtaining a post-secondary education is considered a long term asset as it will continue to generate income. The integrity of the Bankruptcy and Insolvency system would be undermined if the debtor were to retain the entire benefit of the asset without the creditors having a share. This was held in a decision of the Court of Queens Bench of Alberta Re Dolgetta at para. 45 (2008 ABQB 556 Canlii).[1] This view is usually followed in cases where the debtor evades repaying the student loan, despite having received employment as a result of the education.

Please contact the offices Of Rumanek & Company Ltd, for further information.

DISCLAIMER: THIS ARTICLE IS ONLY FOR INFORMATIONAL PURPOSES ON THE GENERAL APPLICATION OF BANKRUPTCY LAW. THIS ARTICLE IS NOT MEANT TO BE LEGAL ADVICE AND SHOULD NOT BE TREATED AS SUCH. Please contact a licensed bankruptcy trustee or a licensed bankruptcy lawyer in Ontario for any advice.