How to Calculate 10 years on a Student Loan
The ten year rule seems simple enough. Section Section 178 (1) (g) of the Bankruptcy & Insolvency Act states that an order of discharge does not release a bankrupt from:
Any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred:
i) Before the date on which the bankrupt ceased to be a full or part-time student, as the case may be, under the applicable Act or enactment, or
ii) Within ten years after the date on which the bankrupt ceased to be a full-time or part-time student.
The Act therefore indicates that it is not ten years from when the student got the loan; it’s ten years from when the student ceased to be a student. As an example, if you got a student loan in September, and finished school the following April, the ten years starts in April, not September.
To further confuse matters, the Canada Student Loan Regulations, section 4.1, state that:
Subject to paragraph 3(2)(b), a borrower ceases to be a full-time student on the earliest of
(a) the last day of the last confirmed period,
(b) the last day of the month in which the borrower no longer meets the applicable minimum percentage referred to in the definition “full-time student” in subsection 2(1), and
(c) the day on which the borrower’s interest-free period is terminated in accordance with subsection 9(4). SOR/95-331, s. 2; SOR/96-369, s. 3; SOR/2004-121, s. 2.
Therefore the period starts at the end of the month. As an example, if your final exam was completed on April 15, that’s the day you ceased to be a student, but the 10 years is calculated starting at April 30.
These rules change constantly, so contact a trustee for further information.
Another question about the 10 yr rule…
If a student loan was obtained and the student finished his studies or dropped out, but returned to school 5 years later without a student loan, when will the 10 years apply? 10 years after the original withdrawal date with which the student loan is associated or the last date of studies which did not involve student loans?
The way the rules are written, the 10 years starts from when you ceased to be a student. Therefore, if you return to school, even without a student loan, technically you have not ceased to be a student, so the 10 years starts again.
So if I started classes in april of 97 which were to last until april of 08, but I stopped attending in August of 07, when would I calculate 10 years from August of 07?
Yes, the 10 years starts from when you ceased to be a student. If you left school before graduating, that’s when the ten years starts. However, it would be wise for you to contact your student loans lender to confirm your “end of study date”; they may have it in their records as the end of the school year, if they were not aware that you left school early.
i was discharged from my bankruptcy oct ‘04 and stopped being a student dec ‘95. i havent made a payment and was contacted once in ‘97 about repayment. i made one payment and have never been contacted by anyone since then. i just recieved a letter from a collection agency and revenue canada saying that they are taking my income tax return and gst payments. i was wondering what i should do about this. my bankruptcy trustee never addressed this issue with me. i am a low income mother of three and will be under finacial strain because of this any help would be great
Take a look at our post on October 23, 2006: http://www.student-loan-bankruptcy.ca/blogarchive/2006_10_01_student-loan-bankruptcy_archive.html
You need to contact your trustee, or a bankruptcy lawyer, to help you make an application to bankruptcy court to have your student loans discharged once the ten year period has ended.
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