Canadian taxpayers absorbed more than $212 million in student loan write-offs last year, even after Ottawa permanently eliminated interest on federal student debt, according to internal government records.Blacklock's Reporter says a Dec. 18 federal briefing note shows Employment and Social Development Canada wrote off $212.5 million in unpaid Canada Student Loans in 2024, up sharply from $168.8 million in 2022 — the same year Parliament amended the Canada Student Loans Act to waive interest charges. Graduating students now leave school owing an average of $15,578, the department said.“The main reason for write-offs include statutes of limitation, bankruptcy and compromise settlements,” stated the briefing note, Public Accounts Of Canada 2024 For Employment And Social Development Canada.Federal evaluations have repeatedly warned that repayment problems stem from borrowers’ financial instability rather than interest costs. An earlier review of the Canada Student Financial Assistance Program found delinquency and default were linked to “precarious and unstable financial situations,” while average loan balances for full-time students have steadily increased over the past decade..Under federal rules, borrowers who miss payments fall into arrears and are deemed delinquent. Loans unpaid for more than 270 days are classified as being in default and are transferred to the Canada Revenue Agency for collection.Auditors reported defaults account for roughly 12% of student loans. Former auditor general Karen Hogan told MPs at a 2020 public accounts committee hearing that write-offs were bound to climb, warning that “the value of unpaid student loans will continue to grow.”The Parliamentary Budget Office echoed that concern in a 2023 report, noting most write-offs involve borrowers who have remained in default for seven years or longer.Students are required to begin repaying federal loans six months after completing their studies, with repayment typically spread over 9.5 years. .Those facing financial hardship can apply to the Repayment Assistance Plan, renewable every six months, which promises “affordable payments” over as long as 15 years based on income and existing debt.In 2019, the Department of Social Development commissioned research into the demographic characteristics of delinquent borrowers, including income, disability, age, field of study and “visible minority status.” The results of that research were never released.Departmental documents said the survey was intended to help officials “address the relevant evaluation questions,” but years later Ottawa continues to write off hundreds of millions of dollars in student debt as loan losses mount.
