Has the federal government changed their student loan collection policies?
As a licensed trustee in bankruptcy in Ontario, Canada I meet with many people each month who are having difficulty repaying their student loans, and they are considering personal bankruptcy. I advise them that if they can’t make arrangements to pay their student loans, the federal portion of their student loans has the ability to seize all or a portion of their tax refund to apply against the outstanding loan balance. Today I met with a person who told me the following about their student loans. (I have omitted some details for confidentiality reasons). I will call this person Bob, which is not their real name. Bob’s student loans are six years old, so a bankruptcy under the current rules will not discharge his student loans. In 2003 Bob’s taxable income was zero. He would have been entitled to a $1,200 tax refund that year, but Canada Revenue Agency applied $600 of the refund against his student loans, so Bob received a refund of $600. In 2004 he was entitled to a $1,800 refund; his
