Student loans: Can’t pay? Don’t pay!

In Canada, the average student debt sums up to $30,000

By KH

This article is an essay of personal experience in avoiding repayment of student loans from the period of 2010-2019. Read on to learn how you might avoid repayment, as one act in a broader struggle for universal free tuition!

Growing up in a single-parent home where we often couldn’t afford the basics, how I was going to pay for university was the last thing to cross my mind. Upon high school graduation, I got accepted to university, ready to start my academic career. I signed the student loan application without even a thought and was loaned $8,000 for my first year at 7% interest. I was 17 years old. Each year the debt kept piling up. At 21 I owed $33,000, and before I was even handed my degree I received a bill for my first loan payment: $600 per month. I hadn’t even graduated yet, and I certainly had no job prospects.

I researched for weeks prior to graduation, knowing I would receive a bill I couldn’t pay. I had heard all the horror stories: harassment by collection agencies, garnished wages, parents still paying off their loans into their 40’s and 50’s. I knew it was an injustice and that I would do whatever it took to avoid 20+ years of debt repayment for an education that is a human right. Nine years later I have not made a single payment, and the debt is legally dissolved. I now have a Master’s degree and am starting a PhD in the fall. Here’s how I avoided paying, and if you’re looking for a way out, you can too.

I started doing my research early. A few months before graduation, I spent hours reading forums, legal websites, and testimonials of people who avoided paying student loans. Here are the most important takeaways from what I researched:

1. Not paying your debts is not a crime. Debtors prisons have long been eliminated in Canada.
2. If you do not acknowledge the debt for six years, creditors cannot collect from you. Acknowledging also includes applying for interest relief, speaking to a creditor about a payment plan, or making a payment. Once you do any of these things, the clock is reset to six years, even if the debt is 20 years old.
3. Your debt does not follow you outside the country. If you work outside of Canada, creditors cannot find you there.
4. When you file your taxes, the government is aware of where you work, how much you earned, and this is how they find you and eventually garnish your wages.
5. Governmental agencies do not talk to each other. We have strict privacy laws in that sense. For example, the government collection agency doesn’t know you’re back in the country based on your passport records. If you go to the doctor using your government medical service plan, they can’t get your address or phone number from the office, etc.

Based on what I had thoroughly researched, using BC specific resources, I decided I would go ahead with my plan to avoid paying student loans. If you are considering going along this path, be sure to do your research. First, I knew my credit would be destroyed (who can afford a house anyway?), so I decided to max out my credit cards, get an upgraded cell phone on credit, and avoid paying all my last bills of the month. These agencies prey upon students who are desperate to fund their education, and stay afloat while in school. I had been under pressure by them for long enough! I closed my bank account and opened a new one at another institution. Then, I said goodbye to my family and friends, and traveled Eastern Europe with the money I had leftover.

Eventually, I settled in South Korea, where the teaching jobs are lucrative, and there is much to see, do, and learn. I stayed there for nearly three years, though with brief stints back to Canada where I visited my family and friends and worked minimally when I was running low on funds. I never earned enough to pay taxes. I went back to Canada and got a job I enjoyed enough, making around $30,000 per year. I held off on filing my taxes the first year, and filed both returns in the second year, just as the 6 year statute of limitations passed. All of my GST rebates and income tax refunds went to the government, who had a lien on any money passing through the government to me. It was a risk that they might try to pursue some kind of action, but since I had been recently been accepted into a Master’s program, I knew that they couldn’t collect student loans from me while I was a full-time student. I never heard anything. I paid for my Master’s degree with savings from abroad, and my two years of work in Canada.

Now in 2019, I filed my taxes for the last two years, and I received all of my tax returns and GST rebates, meaning according to the government, I no longer have a debt outstanding. Recently I got a scare-mongering letter from a collection agency with a legal services company that doesn’t exist. I know my rights and they won’t be hearing from me.

Some things I learned along the way that others considering a similar path should know:

1. Be prepared to have bad credit. Nine years later I am slowly building my credit. If you have no plans to buy a house or car (like me!) this shouldn’t be a problem.
2. If you want to pursue a Master’s degree, likely you will have to pay out of pocket. It’s unlikely you will receive a student loan anytime soon.
3. Be prepared to have family and friends be afraid or confused by what you’re doing. You may get some angry remarks from those who struggled to pay off their loans and don’t realize that life isn’t a race to the bottom. Or, you may get people telling you that you’ll end up in jail! Or that no university will accept you again! This debt will follow you for life, you know! These are things I’ve been told by well-meaning (but grossly uninformed) individuals.
4. When they do find you, credit agencies will try to scare you. They make a living by intimidating and saying outrageous things to people. They cannot contact the payroll department at your place of work to directly garnish your wages. They cannot take legal action on a debt more than six years old. Finally: they lie to you; don’t feel bad about lying to them.

Education shouldn’t be a debt sentence. Growing up in a poor family, I knew the choices given to me were to end my education in grade 12 and work for poverty wages, or take on decades of debt for the hopes of getting a job that doesn’t exist. I chose neither. Access to quality, free, democratic education is a human right, and a crucial part of building a better society. Instead of investing in education, Canadian and provincial governments choose to spend billions on war and militarism, and tax breaks for the wealthy. On top of that, these initiatives are funded by our interest payments. We aren’t going to change this through individual acts of resistance, or by leaving the country to avoid debt repayment. It’s time we take our future into our own hands by coming together to demand free tuition. On top of avoiding debt and interest payments, we must work together in a united and militant student movement that fights for the rights of students as a whole. While some of us can resist in these individual acts, the real fight takes place in broad, united action. However, if you choose to avoid your debt alongside building the student movement for free tuition, I salute you!