- Defaulting on your Student Loan
- Rehabilitation of your Student Loan
- Additional Information
Defaulting on your Student Loan
A student loan is considered to be in default when you are behind on your payments for 270 days (nine months) and collection activities are required. Defaulting on your loan will disqualify you from future student financial assistance and from repayment assistance options.
You may have defaulted on a Canada Student Loan and/or a NL Student Loan. If you default on your loan(s), the governments of Canada and Newfoundland and Labrador, the National Student Loans Service Centre and/or your financial institution will take steps to recover the debt including redirecting any GST or income tax refunds to pay your student loan, reporting you to a credit agency, using a private collection agency to recover the funds and/or taking legal action.
Canada Student Loan Default
If you are in default on a Canada Student Loan, it is sent to the Canada Revenue Agency (CRA) for collection. If you want to get your loan back in good standing (Canada Student Loan Rehabilitation), you can contact the National Student Loans Service Centre (NSLSC) to discuss the process.
NL Student Loan Default
If you are in default on a NL Student Loan, it is then returned to the province for collection. You can contact the Department of Finance, Collection Section by calling 1-709-729-6465 (Local) or 1-877-520-8800 (Toll Free), or emailing firstname.lastname@example.org to make payment arrangements and to get your loan back in good standing.
Payment can be made using the following methods:
- Automatic debit payments (Payor’s Authorization for Pre-Authorized Debits(PADs) (283 KB) form required)
- Online payments from personal bank account
- Cheques – personal or postdated (include Account Number)
- Money Order (include Account Number)
- Cash, credit and debit payments can be made at Central Cashier’s Office located at Confederation Building, 3rd Floor, East Block
You may make advance payments or pay the entirety of your loan ahead of your agreed payment arrangement.
If someone other than the student loan borrower is making a payment, the account number must be referenced. Loan information will only be released to the student loan borrower unless permission is given using the Consent to Release Personal Information Form.
Note: If you have received a Statement of Claim regarding your student loan from the Canada Revenue Agency, you must contact their office at 1-866-336-7565 to inquire further.
The following forms may be required when addressing your defaulted NL Student Loan:
- Pre-Authorized Credit Card Form (179 KB)
- Consent to Release Personal Information (682 KB)
- Financial Condition Report (161 KB)
- Payor’s Authorization for Pre-Authorized Debits (PADs) Form (283 KB)
Rehabilitation of your Student Loan
If you missed payments on your student loan for 270 days or more (9 months), your loan becomes in default. Your Canada Student Loan is sent to the Canada Revenue Agency (CRA) and your NL Student Loan is returned to the province for collection.
Rehabilitation is an opportunity to have your loan taken out of collection. The loan would then be returned to the National Student Loans Service Centre (NSLSC) and you would resume your repayment schedule. Once your loan is back in good standing, you may be eligible for further funding.
Canada Student Loan Rehabilitation
If you are eligible for Canada Student Loan rehabilitation, you must contact the NSLSC to:
- arrange a repayment schedule with the CRA
- repay all interest owed on your Canada Student Loan
- make the equivalent of 2 monthly payments on the loan as agreed to in your repayment schedule with CRA. You may choose to make a Lump-sum payment combining the two monthly payments and the interest owed.
After you make your payments, contact the NSLSC. Ask to speak with a CSLP client relations officer to inform them that you made the necessary payments to rehabilitate your loan.
Note: If you have a judgment or legal action on your account, you will not be eligible for Canada Student Loan rehabilitation. Contact the NSLSC and ask to speak with a Canada Student Loans Program (CSLP) client relations officer to discuss your situation.
NL Student Loan Rehabilitation
Rehabilitation of your NL Student Loan occurs when a borrower has met the following conditions for both federal and provincial defaulted student loan accounts:
- pay all outstanding accrued interest on both federal and provincial defaulted accounts (NL currently charges zero per cent interest); and
- pay the equivalent of two monthly payments towards each of the federal and provincial defaulted student loan accounts.
After you have confirmation that your Canada Student Loan has been rehabilitated and returned to the NSLSC, contact Student Financial Services Division to confirm that the provincial requirements have been met in order to rehabilitate the provincial portion of your student loan.
Claiming interest payments on income tax: You may be eligible to make a claim on your income tax return for interest paid on your defaulted Canada Student Loan. To determine your eligibility, please contact the Canada Revenue Agency for tax advice at 1-800-959-8281.
Collection notices: If you have been notified that you still have a loan in collections and you thought you had already paid your loan in full, it may be possible that you have a loan outstanding with CIBC if you borrowed before 2000. For assistance, contact CIBC national Student Centre – Collections at 1-800-597-5525.
Loan Balance on defaulted NL Student Loan: To obtain your current balance, please call the Department of Finance, Collection Section 1-709-729-6465 (Local) or 1-877-520-8800 (Toll Free) or email email@example.com. Statements are issued annually to all students with defaulted student loans and quarterly to those in repayment. However, you may request an up-to-date statement at any time.
Statement of Claim: It is the beginning stage of the legal process before a file is sent for default judgment. If default judgment is awarded, Government of Newfoundland and Labrador can avail of judgment enforcement tools (such as wage garnishments and/or bank account attachments). Making payment arrangements can prevent these collection activities from coming into effect. Please call the Department of Finance, Collection Section by calling 1-709-729-6465 (Local) or 1-877-520-8800 (Toll Free), or emailing firstname.lastname@example.org for further information.