Canada Could Reduce Student Loan Dismissal Time

While numerous private and state student lending programs in the U.S. have announced temporary suspensions or reductions in their activities due to funding difficulties, the national program in Canada is looking to make changes in its rules that could affect the collections of outstanding student debt.

The nation’s Senate and House of Commons are considering two separate measures to amend Canada’s Bankruptcy and Insolvency Act to change the amount of time a debtor has to declare bankruptcy and have his student loan obligations dismissed.

The measure being debated in the Canadian Senate (S. 205) would slash the amount of time that a Canadian Student Loan Program borrower would need to wait to declare bankruptcy from 10 years to two, and would also enable immediate application to declare insolvency for those facing long-term financial hardship.

The bill has received the support of the several leading Canadian student organizations. 

The House of Commons proposal would cut the waiting period from 10 years to seven, and has the support of the Canada Student Loan Program.