There's another debt-deferral cliff looming this fall

The government’s rescue effort has included doubling grants and creating the Canada Emergency Student Benefit , which provides direct payments of $1,250 or $2,000 every four weeks to eligible students from May to August.commissioned by CASA found in May that most postsecondary students who qualified for either the CESB or the $2,000-a-month Canada Emergency Response Benefit “don’t think it will be enough to get them through the Fall 2020 semester, let alone beyond.

And just like homeowners who have had mortgage payments postponed, if the financial situations of student-loan borrowers have worsened, resuming those repayments could prove a challenge. This threat was dubbed a debt-deferral “cliff” by Evan Siddall, CMHC’s president and CEO, in May. Student debt contributed to a record 17.6 per cent of insolvencies in Ontario in 2018, the study found. If the situation was similar in other provinces, then approximately 22,000 ex-students could have filed for insolvency that year in connection with school-related debts, Hoyes, Michalos & Associates said.

are increasingly unable to find a stable job with enough income to support both student loan repayment and living expensesThat employment picture has been made much worse by COVID-19, and particularly so for younger people. Statistics Canada reported employment among those aged 15 to 24 was still 17.4 per cent less in July than it was in February.

“The Government continues to monitor the situation and examine ways to continue to support students through this extraordinary time,” a spokesperson for Employment and Social Development Canada said in an email. “With respect to borrowers who will be resuming the repayment of their CSL at the end of the moratorium, the Government of Canada has measures in place to help them repay their loans.”

Colin1Best No, there isn't.

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