A student loan is in default when a student is behind on their payments for 270 days (nine months). If a loan is defaulted, the Canada Revenue Agency (CRA) completes the collection activity for the federal student loan and the Government of Newfoundland and Labrador’s Department of Digital Government and Service NL completes the collection activity for the provincial student loan.
Students who have a student loan in default are ineligible for further student financial assistance or repayment assistance options until the loan is back in good standing or paid in full.
If a student is in default on a Canada Student Loan, the National Student Loans Service Centre (NSLSC) sends it to the Canada Revenue Agency (CRA) for collection. To discuss the process of returning a Canada Student Loan to good standing (Canada Student Loan Rehabilitation), students can contact the NSLSC at 1-888-815-4514 to discuss the process.
If a student is in default on a Newfoundland and Labrador Student Loan, the National Student Loans Service Centre (NSLSC) returns it to the Province for collection. To obtain information regarding your defaulted provincial student loan or make arrangements for payment, please call 1-709-729-6465 (Local)/1-877-520-8800 (Toll Free) or email collections@gov.nl.ca.
The following forms may be required when a student is addressing their defaulted provincial student loan:
Rehabilitation provides an opportunity for the student to have their loan(s) taken out of collection. Once rehabilitated, the collector returns the loan to the National Student Loans Service Centre (NSLSC) and the student resumes their payments as per the repayment schedule. Once the loan is in good standing, the student may be eligible for further funding or repayment assistance options.
If a student is eligible for Canada Student Loan rehabilitation, they must contact the National Student Loans Service Centre (NSLSC) to:
Students may choose to make a lump-sum payment combining the two monthly payments and the interest owed (if applicable).
After the student makes the required payment, they must contact the NSLSC and ask to speak with a Canada Student Financial Assistance Program client relations officer to advise they have made the necessary payments to rehabilitate their loan.
Note: Students with a judgment or legal action on their account are not eligible for Canada Student Loan rehabilitation. These students should contact the NSLSC and ask to speak with a Canada Student Financial Assistance Program client relations officer to discuss their situation.
Rehabilitation of a student’s provincial student loan occurs when the student has met the following two conditions for both their federal and provincial defaulted student loan accounts:
Once a student receives confirmation that they have rehabilitated their Canada Student Loan and the Canada Revenue Agency (CRA) has returned it to the National Student Loans Service Centre (NSLSC), the student must contact StudentAidNL to confirm that they have met the requirements to rehabilitate the provincial portion of their student loan.
Claiming interest payments on income tax: Students may be eligible to make a claim on their income tax return for interest paid on their defaulted Canada Student Loan. To determine eligibility, contact the Canada Revenue Agency (CRA) for tax advice at 1-800-959-8281.
Collection notices: Students receiving notification they have a loan in collections may have a loan outstanding with CIBC if they borrowed before 2000. For assistance, contact the CIBC National Student Centre – Collections at 1-800-597-5525.
Loan balance on defaulted provincial student loans: Call 1-709-729-6465 (Local)/1-877-520-8800 (Toll Free) or email collections@gov.nl.ca to obtain the current loan balance on defaulted provincial student loans. The Province issues statements annually to all students with defaulted student loans and quarterly to those in repayment. Students may request a current statement at any time.
Statement of claim: A statement of claim is the beginning stage of the legal process before the Government of Newfoundland and Labrador sends a file for default judgment. The Province can avail of judgment enforcement tools (i.e., wage garnishments, bank account attachments, etc.) if default judgment is awarded. Making payment arrangements can prevent these collection activities from occurring. Call 1-709-729-6465 (Local)/1-877-520-8800 (Toll Free) or email collections@gov.nl.ca for further information.
