This website is a testimony to the problems Canadian Student Loan borrowers experienced from approximately 1996 to 2008 and until their loans were paid off.

The privatization of the Student Loans system by the Chretien and Martin Liberal governments broke the system and defaulted thousands of borrowers who were trying to pay their loans. There were even stories of suicide due to the harassment of borrowers.

Read the report that I prepared back in 2007 here. Canada Student Loans-The Need for Change Fortunately the new Conservative government at the time revamped the program and fixed the system for new borrowers, but borrowers under the previous program were left with ruined credit and continued harassment from debt collectors.

I call on the Canadian Government to apologize to the borrowers affected by this fiasco and make amends.

Unfortunately the Liberal government is again clobbering the Education system with their upcoming changes to International Student Visas. Yes, there's a problem, but instead of a well thought out plan, they have pulled the emergency brake on the train causing a derailment. This has introduced unprecedented instability for both private and public education institutions who serve both international and local students.

Universities can't plan. I've heard of courses being cut because the government has no process in place for universities to send the newly required acceptance letters to the government.

This means that students who have been accepted can not attend courses that start in the summer 2024 semester. With cut sections, current Canadian students will have trouble getting courses, and may have to switch to part-time which changes their enrollment status and might trigger repayment of their loans or ineligibility for funding. I've seen this before. It wreaks havoc on the student loan borrowers.

Again, the Liberal government has messed up the education environment. Will the new system needed in a rush for the acceptance letters be the new Arrivecan scandal?

I call on the government to implement a slower phased in approach and delay the requirement of the acceptance letters until a process is in place to submit these letters.


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cebby View Drop Down
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    Posted: 09/August/2012 at 7:56am
In 1999, I signed for a student loan in Ontario, provided through CIBC. Roughly 4500 was provincial and 4500 federal.  Unfortunately, at the end of the course, the teacher advised that there was no work in the industry and we had better self train in something else.... :/ This was followed by 10 years of absolute poverty providing for a family of 4 on roughly 10-12k/year with no option to pay down the debt.

For the last several years, my taxes have been claimed towards the provincial part of the loan which is very close to resolved.

Recently, the CRA has contacted me out of the blue and advised me that the federal portion of the loan is at $9100 due to interest.  Today, I agreed to a $150/month payment schedule, which admittedly it is nice that for the first time in over a decade I can kind of (barely) afford to do it. It will take approx 5 years to pay at this rate, not counting continued interest.

My wife is angry at me.  She says that I should deal with CIBC directly, and that I should not have to pay the full amount.  I understand that I can propose a settlement, than perhaps less would be accepted, but I can't.

My question is, is there a better way to deal with this loan other than to make the agreed payments to the CRA?  As I understand, my credit rating won't even begin to fix itself until this is paid off, which kind of sucks as the debt is more than double the principal loan.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote footloose Quote  Post ReplyReply Direct Link To This Post Posted: 10/August/2012 at 12:21pm
Prior to your most recent communication with the CRA, have you made any payments on the Federal portion of your student loan since your "end of study date" regardless of whether you graduated or not?  Do not include any monies withheld, if any, by the CRA and applied to your Federal student loan.   Depending upon your answer, I can explain your position vis-a-vis the CIBC and the CRA and what options you have other than the current agreement of $150 per month for 5 years payable to the CRA. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote cebby Quote  Post ReplyReply Direct Link To This Post Posted: 14/August/2012 at 3:17am
Thank you for your response.  No, I had not made any payments towards the federal portion of the loan.  In fact, when I first spoke to one of the agents (I believe it was CRA, may have been a different company at the time) they were calling about the provincial portion, then put me on hold and seemed to stumble on the other loan which I found kind of odd.  However, it is still there and needs to be dealt with if I ever want to get my financial life back on track.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote tkarmy Quote  Post ReplyReply Direct Link To This Post Posted: 15/August/2012 at 8:21am
I'd check your credit report..... might not even be on it anymore... equifax doesn't show any of my old student loans at all... sounds like you could be dealing with a stats barred thing. I'd get Johnny on it if I were you before you go any further
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Post Options Post Options   Thanks (0) Thanks(0)   Quote SolveStudentDebt Quote  Post ReplyReply Direct Link To This Post Posted: 17/August/2012 at 6:41am
If CRA has contacted you then this would have nothing to do with CIBC. CRA only recovers debt owed to the croan (Tax and non-tax). If tyhere is a limitation issue in place, and there is a hardship that prevents you from paying the student loan in a reasonable amount of time, or any hardship that can be presented that represents a lengthy history of economic crisis, then that is the way you should approach this.
 
If it is barred, and you acknowledge it, there is no turning back in the event something happens to you down the road whereas you are unable to continue paying. The approach you take is critical in a case like this. You have to evaluate the risk to you, your family, and your future financial and social security.
 
If you have not acknowledged the debt in a long time, and you have not bankrupted out, then there is a strong possibility of a limitation issue that you would not be aware of.
 
So, think risk and then the right approach. You make one mistake and it could cost you dearly.
 
Johnny
Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote footloose Quote  Post ReplyReply Direct Link To This Post Posted: 20/August/2012 at 4:19am

Federal student loans that were issued between August 1, 1995 and July 31, 2000 were issued pursuant to the Canada Student Financial Assistance Act. These loans were issued by various banks, credit unions and caisses populaires who had signed an agreement with the Federal government. These loans were called "risk-shared" loans because the issuer of these loans, i.e. banks, etc. were responsible for the collection of any defaulted loans. In return, the Federal government paid a "risk premium" to the issuer of these loans ( similiar to an insurance premium ) for those loans that had gone into default or were about to default, hence the name "risk-shared". However, there was one exception to this agreement. For those loans that had been issued under this Act, and for which no payments had been made for 18 months after the student's "end of study date", these loans were returned to the Federal government for collection. These loans were called "put-back" loans for which the Federal government reimbursed the issuer of these loans. Now, the CIBC was relieved of their responsibility to collect on this defaulted student loan and now the Federal government assumed that responsibility. That is why you were contacted by the Canada Revenue Agency ( CRA ) who is the official collection agency of the Federal government regarding your outstanding and unpaid Canada student loan. The CIBC is now officially "out of the picture".

Under the Canada Student Financial Assistance Act, Section 16.1 sets out a "limitation period" under which the Federal government can litigate a student loan and obtain a judgment.

16.1(1) Subject to this section and section 16.2, no action or proceedings shall be taken to recover money owing under a student loan more than six years after the day on which the money becomes due and payable.

16.1(2) Money owing under a student loan may be recovered at any time by way of deduction from or set-off against any sum of money that may be due or payable by Her Majesty in right of Canada to the borrower or the estate or succession of the borrower.

16.1(3) If a borrower's liability for money owing under a student loan is acknowledged in accordance with subsection (4) the time during which the limitation period has run before the acknowledgment does not count in the calculation of that period.

16.1(4) An acknowledgment of liability means

(a) a written promise to pay the money owing, signed by the borrower or his or her agent or other representative;

(b) a written acknowledgment of the money owing, signed by the borrower or his or her agent or other representative, whether or not a promise to pay can be implied from it and whether or not it contains a refusal to pay;

(c) a part payment by the borrower or his or her agent or other representative of any money owing; or

(d) any acknowledgment of the money owing made by the borrower, his or her agent or other representative, or the trustee or administrator in the course of proceedings under the Bankruptcy and Insolvency Act or any other legislation dealing with the payment of debts.

16.1(5) If a borrower's liability for money owing under a student loan is acknowledged in accordance with subsection (4) after the expiry of the limitation period in respect of the loan, an action or proceedings to recover the money may, subject to subsections (3) and (6), be brought within six years after the acknowledgment.

INTERPRETATION

Section 16.1 provides for a limitation period of six years in which the Federal government ( i.e. the Attorney General of Canada ) can litigate ( i.e. sue the student loan debtor ) the student loan providing the debtor has NOT acknowledged the student loan liability. Subsection (4) provides for how an acknowledgment can occur. And if an acknowledgment occurs WITHIN the six year period, a new six year period will begin from the date of the acknowledgment. Subsection (5) provides for an acknowledgment OUTSIDE the six year period when a new six year period will begin from the date of the acknowledgment.

If no acknowledgement of this student loan has been made in accordance with subsections (4) and (5), then this student loan is "statute-barred" pending the Federal government having already obtained a "Default Judgment". Whether a "Default Judgment" has been obtained or not, it is still subject to the provisions of subsection (2) ( i.e. the right of set-off ) which means that the Canada Revenue Agency ( CRA ) can still withhold any income tax refunds and quarterly GST payments in satisfaction of the outstanding and unpaid Canada student loan.

ACTION REQUIRED

DO NOT MAKE ANY PAYMENT TO THE CRA. Obtain a FREE Consumer Disclosure Report from both Equifax and TransUnion and examine them carefully. Check to see if there is any "Judgment" shown regarding your student loan. If there is a "Judgment" shown regarding your student debt, then the Attorney General of Canada has been awarded a "Judgment" against you. Make sure that the date of the "Judgment" is within the limitation period as stated above.

If there is no "Judgment" shown on either Report, it means that either the "Judgment" has been "purged" from the Report ( In Ontario, judgments are purged after 7 years ) or the Federal government has failed to obtain a "Judgment". In order to know for sure whether a "Judgment" has been registered against you, you will have to go to your local Federal Courthouse to see if a "Judgment" has been obtained. If you do not know where your closest Federal Courthouse is located, contact your local courthouse and ask where the nearest Federal Courthouse is located. If you are unable to do this because of time or distance, contact a licenced Paralegal who works in the area where the Federal Courthouse is located. The Paralegal will conduct a search on your behalf, give you a written report of their findings and will charge you a fee for their services. In this manner, you will have "peace of mind" knowing whether a "Default Judgment" has been registered against you.

If you choose not to make any further payments on this debt, you can be sure that the CRA will exercise their "right of set-off" and withhold any further income tax refunds and quarterly GST payments.

 

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 20/August/2012 at 1:58pm
Footloose and Johnny,
Just a point with these loans... I believe most loans for this period would actually be held by financial institutions except for a portion of defaulted loans that the banks could return to the federal government. I believe the banks were allowed to return 5% of their portfolio to the feds under this program.  That might account for why the CRA would be trying to collect on a 1995-2000 student loan.

Thoughts?

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Post Options Post Options   Thanks (0) Thanks(0)   Quote SolveStudentDebt Quote  Post ReplyReply Direct Link To This Post Posted: 21/August/2012 at 3:56am
That is the first generation program. Otherwise, known as the risk-shared one. CSL2's are risk, and the government agres to purchase 1% of the loss that these banks carry in addition to the guaranteed ones. So, put-backs are that 1%.
So if any of Cebby's loan is risk-shared, and not put back then it is a CIBC student loan. I am reading from the first post made here because CIBC was mentioned.
 
Footloose cited from legislation:
 
"If no acknowledgement of this student loan has been made in accordance with subsections (4) and (5), then this student loan is "statute-barred" pending the Federal government having already obtained a "Default Judgment". Whether a "Default Judgment" has been obtained or not, it is still subject to the provisions of subsection (2) ( i.e. the right of set-off ) which means that the Canada Revenue Agency ( CRA ) can still withhold any income tax refunds and quarterly GST payments in satisfaction of the outstanding and unpaid Canada student loan."
 
If the loan is statute barred ALL liens are removed. I handle these cases every day.
 
The interpretation can sound like it means "we may not be able to recover money from you after a prescribed period time expires. However, we do not have to pay money owed to you because you owe us."
 
The fact is what matters. The fact is that once a loan is statute barred ALL liens are removed. Arbitrary set-off is an action or a proceeding, and that is prohibited under the legislation law.
 
In the future, who knows what changes will be made to legislation. They change all the time.
 
 
 
Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

solvestudentdebt.com
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasy Quote  Post ReplyReply Direct Link To This Post Posted: 19/February/2014 at 8:17am
I know this is an old topic but can someone answer this if a student loan is classified as risk shared and CIBC owns it and no payments or acknowledgement has been made in over 10 years would this be stats barred?
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Post Options Post Options   Thanks (1) Thanks(1)   Quote SolveStudentDebt Quote  Post ReplyReply Direct Link To This Post Posted: 19/February/2014 at 4:26pm
It is subject to a limitation period but the only way to find out if it is barre4d is to do put the puzzle together. Each case is unique. 

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Goodnews2014 Quote  Post ReplyReply Direct Link To This Post Posted: 15/April/2014 at 7:56am
Johnny,
 
I have 2 CIBC loans from 1999 that were previously with CBV and now are with Metropolitan Credit Adjusters.  Both these loans have fallen off my credit report but between CBV and Metropolitan making inquiries on my TU report I would like to see what I can do about getting them to go away.  Is it possible to make these guys an offer or is it worth it.  I am not too sure what my options are with them, I do not want to go through a consumer proposal or anything.  I currently also have a loan with CRA that I pay monthly and a small loan through BCSL.  Those two are taken care of, just want to put an end to these guys inquiries on my credit report.
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