Today’s money hack is about debt repayment relief for student loan holders in Canada.
If you happen to hold a student loan in Canada, today is your lucky day because the government has just made it easier for you to repay your student debt. In a welcome break for graduates struggling to find good jobs, the Canadian government has updated a debt relief measure that allows student debt holders to delay the repayment of their debt up until they begin earning at least C$25,000 per year. Furthermore, if the student loan holder has a family of five or more, they can delay the repayment until they begin to earn around C$68000.
This rule, which is part of the government’s Repayment Assistance Plan, is expected to apply to over 700,000 students across Canada, who can now easily focus on building a career instead of crumbling under the burden of government student debt. The student loan Repayment Assistance Plan makes room for lower monthly repayments on student loans, or complete waivers for a period of time, depending on the income and family size of student debt holders.
Many individuals see college degrees as a stepping stone for strong careers and stable financial health, but students often need to obtain student loans to pay for high tuition fees at colleges and universities. Many financial advisers label student loans as good debt, because it helps create an asset (similar to housing loans) but the reality is, tens of thousands of graduates struggle with the repayment of student debt, which multiplies over time because of compounding interest rates. This is why the debt relief measure revealed by the Canadian government will go a long way to help low-income graduates deal with the extra financial burden of student debt.
Hopefully, governments in other countries around the world will use this as a benchmark for good practice in the area of debt relief.