Canada Student Loan Debt
Canada Student loan debt seems to be prevalent everywhere, even for Canadian students looking to make more money when they graduate by pursuing a post secondary education. Most of the students in Canada are pursuing post secondary education in order to secure a good job and to become a more productive employee. Therefore, a good educational background can help the youngsters in Canada to make more money. A large number of young Canadians consider post secondary education as their right in order to pave the path to secure their future.
Of late, the students and their parents find it extremely difficult to manage their higher educational expenses. Therefore, most of the people rely on Canadian student loans to pay for an increased education. However, as student loans become exorbitant, so many students are failing to pay back the owed amount on time. In this tough economic situation, students have defaulted on payments and compounded their financial situation.
In Canada, the eligibility criteria to obtain a student loan is based on financial need, rather than on good credit or on the ability to pay off the loan. Most of the young students continuously take out student loans without realizing the peril of mounting debt.
According to the statistics in Canada, the average student debt after graduating is $19,000. In their early working years, the graduates are burdened with this overwhelming debt. The mounting interest rates on the owed amount have complicated the financial situation of these graduates and the overwhelming debts adversely affect their financial state for some time.
Well, the financial experts often suggest to pay off the debts as the accruing interest on the principal balance makes it unaffordable to pay off. According to the Canadian bankruptcy law, the borrowers are required to be out of school for 7 years before the loans are forgiven. Therefore, you may have to pay more in the long run if you take more time to pay off these student loans.
Canadian law also states that a former student who defaults on their student loan payments can face the consequences of wage garnishment. The borrowers are required to meet minimum standard to have their wages garnished. The maximum amount of wages that can be garnished is 15%. You need to earn between 220 and 240 Canadian Dollars per week, as it is the minimum income requirement for the borrowers for their wages garnished.
Generally, Canadian student loans are not discharged in bankruptcy. However, only in exceptional cases the loans are discharged. Therefore, if you’re unable to pay off your student loan debts, you may want to take up some help of a financial expert to eliminate your financial woes.
