Navigating Student Loan Repayment in Canada  

Overwhelmed by student loan debt? Read this blog to find solutions to address your student loan debt

rebuild your worth, book a free consultation todayBook Now

By Taz Rajan, Bromwich+Smith Staff | 1036 words | Reading Time:  5 minutes| Last update: 2023/11/14

The last few years have been difficult for many Canadians. The global pandemic has taken a significant toll on the financial well-being of people across the globe and continues to have long lasting affects for many. In Canada, the economic repercussions have been particularly hard-hitting for the country's youth. The pandemic has led to widespread unemployment, and young workers, in particular, have been severely affected. As we emerge from the grace period during which student loan repayments were deferred, millions of students are once again expected to start repaying their loans, even if they find themselves out of work.  

Youth and Economic Uncertainty 

The economic struggles brought about by the pandemic have raised concerns among young Canadians. A national survey conducted by Bromwich+Smith highlighted the worries of the younger generation. According to the "Money, Fear, and Stigma" poll, 76% of Canadians aged 18-34 fear that the pandemic has created permanent impacts on society, and 74% are apprehensive about the unknown. 

For students and recent graduates, these concerns are not unfounded. As billions of dollars in student loan debt are once again being collected, many students, who were left jobless by the pandemic, find themselves struggling to make payments. 

Evolution of Student Loan Guidelines 

To understand the current state of student loan forgiveness in Canada, it's essential to recognize the historical context of student loans. In the 1990s, as it became evident that some students were accumulating substantial debt to finance their education and then declaring bankruptcy upon graduation, the Canadian government decided to tighten the restrictions around student loan debt. 

The restrictions were designed to make it more difficult for students to discharge their student loan debt through insolvency. As a result, students must now be out of school for at least seven years before their student loan debt can be entirely forgiven within a proposal restructuring. However, once the seven-year waiting period has elapsed, student loans can be included in a debt relief program like a Consumer Proposal.  

Dealing with Student Loan Debt 

If you're a recent graduate who hasn't been out of school for seven years, you might be wondering about your options. While the debt cannot be entirely forgiven, it can still be included in a proposal restructuring. This offers the advantage of suspending your required payments and collection activities related to the student loans during the proposal's term, potentially providing you with up to five years of payment deferrals. However, it's important to note that payments will resume at the end of the term. 

If you continue to face difficulties even after this temporary relief, you can explore the possibility of filing another proposal specifically to address your student loan debt. This option can help you settle this financial burden once and for all, provided you have now been out of school for the requisite seven years. Alternatively, you can consider making an application to the Court under Section 178.1 of the Bankruptcy and Insolvency Act (BIA) to have your student loan debt forgiven within the proposal you've just completed. 

You may be able to claim financial hardships to temporarily freeze student debt payments. Speak to your loan officer to find out what relief they may be able to provide you with.  

In the face of financial hardship, it's important to remember the age-old saying, "Where there is a will, there is a way." Recent graduates, do not despair; there are potential solutions to your student loan challenges. Customized solutions are available to help you navigate this complex landscape. 

You can start by seeking a free consultation with a Debt Relief Specialist from Bromwich +Smith. Their expertise can guide you through the various options available to address your student loan debt, provide much-needed relief, and set you on a path toward financial stability. 

The Uncertain Road Ahead 

With increased cost of living, we are hearing more from our younger population about financial hardships and the struggles to afford housing, food and debt repayment. Debt does not discriminate and you are never too young or too old to learn about ways to reduce your debt.  

The economic uncertainties wrought by the pandemic have left many graduates grappling with the burden of student loan debt. As we navigate through increased interest rates, it's crucial to consider the various options available to alleviate this financial strain. Whether through proposal restructuring, legal avenues, or specialized guidance from debt relief experts, there is hope on the horizon for those in need. Young Canadians need not face the challenges of student loan debt alone; assistance is just a call away. If you are feeling overwhelmed by your student loans or other debts, don't hesitate to reach out to the Debt Relief Specialist team at Bromwich+Smith. We are here to support you on the journey to rebuilding your financial well-being.  

Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at  1.855.884.9243, Live Chat or you can request a call back at contact us page. We want to see you flourish!   


1: How has the global pandemic affected Canadian youth economically?

The global pandemic has led to widespread unemployment, particularly impacting Canada's youth, who now face challenges in financial well-being and loan repayments.

2: Can recent graduates with less than seven years out of school have relief from student loan payments?

While the debt can't be entirely forgiven, recent graduates can include it in a proposal restructuring, providing up to five years of payment deferrals. Payments will resume at the proposal's end.

3: How long is the waiting period for student loan debt to be entirely forgiven within a proposal restructuring?

The waiting period for student loan debt forgiveness within a proposal restructuring is seven years after being out of school.

4: What does a proposal restructuring offer to recent graduates struggling with student loan payments?

A proposal restructuring allows recent graduates to include their student loan debt, providing temporary relief with up to five years of payment deferrals. However, payments will resume at the end of the term.

5: Can individuals facing financial hardship freeze student debt payments?

Yes, individuals may be able to claim financial hardships to temporarily freeze student debt payments. It's recommended to speak to a loan officer to explore available relief options.

By Taz Rajan Community Engagement Partner at Bromwich+Smith
Taz has been in the finance industry for nearly 2 decades and has always been passionate about education and empowerment.  Having declared bankruptcy herself, she intimately understands the shame, stigma surrounding matters of debt as well as the joy and relief that comes from restructuring.  Taz actively works to normalize the conversation of debt through blogs, media interviews, webinars, lunch & learns and through building relationship.

Add new comment

Plain text