British Columbia Student Loans in Default helpful Guidelines

BC Student Loans Default

What do students do if their British Columbia student loans in default was something beyond their control? When we apply for any type of loan, especially British Columbia student loans, we seldom consider that getting the loan was the easy part – and paying it back is the difficult part. This is especially true for student loans because the loan won’t be paid back for years – literally. You don’t start repaying until six months after your graduation. This failure to think about repaying the loan often leads to your British Columbia student Loan going into Default.

Your BC student loan falls into default status after you have missed five payments, for all intents and purposes, but technically, you are in default once you have missed a payment. The BCSL just won’t take any action until you are at least five payments behind. At that point, they will start the collection process, and can garnish your wages, and collect any funds that are due to you through the Revenue Agency as well. Additionally, they can take funds out of your bank account, and possibly seize any assets that you may have of value.

Obviously, you do not want to let things go that far. Instead, you need to contact the BCSL to make arrangements to get your loan up to date. Many of the BC payment assistant programs that are available will not be available to you once you reach default status, so it is important that you act fast. You can seek Interest Relief, payment deferral, or even loan forgiveness, but you may not be eligible for all or any of those programs.

Once your British Columbia student loan has defaulted, it is due in full. This means that you cannot simply start making payments again – although they wouldn’t refuse those payments. But failure to pay the loan off in full will result in damaging your credit score severely. In order to prevent this from happening, and in order to still be eligible to obtain Canada student loans in the future – and possibly to enter into any of the BC repayment assistance programs – you will have to obtain reinstatement.

BC reinstatement will also stop harassing collection efforts for those student loans in BC that you defaulted on, which is always a huge relief. Additionally, you will start receiving your income tax refunds once again, and be able to make payments once again. Reinstatement is not automatic or guaranteed. You must apply for it, and you must be approved for it by a committee.

It’s also important to realize that if you defaulted on your Canadian student loans as well, you will have to receive clearance from the National Student Loan Service Centre before you will be considered for reinstatement for BC student loans. Make sure that you go through the NSLSC process first.

If your BC student loans were guaranteed student loans or direct lend loans, you must make six payments in a row, without being late, before you will be considered for reinstatement as well. You may have to pay additional fees as well, including added interest, any NSF fees that may exist, or other fees associated with the loan or the default of the loan. Naturally, the BCSL will not object to you paying off the old loans in full for reinstatement for new loans. If your loan was a risk sharing loan, you will need a letter from the financial institution that granted the loan originally, stating that you are no longer in default. The financial institution will have their own guidelines for moving the loan out of default status.

Go to British Columbia Student Loans in Default or more information regarding all of the above. You can also download the application form for reinstatement through this link, or you can obtain the forms from the financial aid office at your school.