Pressure to repay student loans intensifies


Canada Revenue Agency to increase collection efforts

By Mercedes Deutscher, News Editor

The Canada Revenue Agency (CRA) is expected to place increasing pressure on students who have taken out student loans, according to some letters exchanged between the CRA and Employment and Social Development Canada (ESDC) that were revealed by the Canadian Press. Such efforts may result in the CRA being able to directly contact those who have taken out student loans.

The Canadian government is required to write off millions in owing student debt each year. In the 2012-13 fiscal year, the government wrote off over $300 million in uncollected student debt dues to a variety of reasons; 90 per cent of cases were due to an inability to contact borrowers within a six-year legal limit on collection, as well as reasons of bankruptcy. The efforts of the CRA to collect overdue loans had proven to be costly and time consuming due to the agency having outdated contact information and being unable to request said information from other agencies due to privacy laws.

Ian Shugart, then-deputy minister at the ESDC, wrote a letter in October 2014 to his counterpart at the CRA saying that the Conservative party had requested the ESDC to “improve recoveries and reduce the write-off” of student debts, as revealed by the Canadian Press. Shugart used the letter to request the assistance of the CRA and to, “reassure my minister that all reasonable efforts are being made to increase recoveries and reduce (loan) write-off amounts.”

Since then, the CRA and ESDC have been exchanging information, including personal contact information of borrowers, in order to aid with the collection of student loans. According to ESDC spokesperson Marie-France Faucher, this exchange of information will allow for the ESDC to take more drastic action towards collection.

The new relationship formed between the CRA and ESDC has been received critically by the Canadian Federation of Students, with Bilan Arte, national chairperson for the Canadian Federation of Students, suggesting to the Canadian Press that the “government […] is more concerned about the public image […] rather than the reality that perhaps these numbers are indicative of a pretty big crisis that needs immediate address.”

In relation to the increasing student debt problem, CIBC released a poll that suggests an increasing amount of concern from students in regards to educational and post-graduation finances. The poll finds that 37 per cent of students are concerned about finding a job with a stable, decent salary. Another 27 per cent of those students worry about being able to balance both tuition payments and living expenses simultaneously, and 21 per cent are stressed about being able to pay off their student loans upon graduation.