What Happens When You Fall Behind on Your Student Loan Payments?


When a Student Loan is Considered to be Delinquent or in Default

Should at any time you fall behind in your student loan payments your account will be considered delinquent. If your account is overdue for 150 days for a provincial loan or 270 days for a national loan you will be considered to be in default and collection activities will ensue. A delinquent account will often disqualify you from receiving future student loans but more importantly will prevent you from being able to pursue repayment assistance options with either provincial or national student loans. Beyond this, a delinquent account will greatly affect your overall credit. All loan repayment activities are reported to the credit bureau and a poor credit rating can impact your ability to get future financing for things such as a car or home. Delinquent account holders could also face increased interest charges, wage garnishment, property liens and additional legal actions.

How to Get Your Student Loan Back in Good Standing

If you want to get your student loan back into good standing you must first make six consecutive loan payments and pay off any outstanding interest and fees that accrued during the period of default. If you have successfully completed those steps you can apply to have your loan returned to good standing in BC at the StudentAid BC website. However, just because your student loan is returned to good standing doesn’t mean that your credit is fixed. Any late or missed payments will report on your credit report for 6 years in most provinces.

If your account is delinquent or in default or is at risk of falling out of good standing, speak with your lender or make an appointment to speak with a non-profit Credit Counsellor.