How I Wiped Out $16,000 of Debt in Minutes

If you check out my page, The Facts, you’ll see that I started on my debt journey owing about $27,000 in student loans. This isn’t really the whole story. I used student loans to finance my school tuition (highest in the country) and living expenses (highest in Atlantic Canada), which amounted to more than $27,000. When all was said and done, after my four-year undergraduate program, I’d borrowed $42,082.00.

I’d never really paid much attention to how much I was borrowing while I was in school. At the time, it seemed very necessary. It wasn’t like I was blowing my money on trips or clothing. I didn’t own any expensive purses, and when I was out of school, I had a full-time job that paid above minimum wage. How had I possibly managed to rack up so much debt, and more importantly, how the heck was I going to pay it all off?

I suspect beer played a major role in my excessive debt accumulation.

Once I started figuring out what my minimum monthly payments were, I really started to squirm. Federal student loans must be paid off in 10 years. If I picked  the variable interest rate of 5.5% over 10 years, my minimum monthly payment was going to be $456.70. That seemed too high for me to stomach.

So, being the internet researching fiend I am, I immediately hopped on Google and started trying to figure out how to get out of this. I’d heard that some friends of mine had qualified for student debt repayment assistance, so I went to my provincial government website to learn more about that.

Not surprisingly, as a full-time employee with an above minimum wage job and no dependents, I didn’t qualify for debt repayment assistance. I was about to close the browser when a small link caught my eye. It was called the Timely Completion Benefit, and it rocked my world.

The Timely Completion Benefit is only available to residents of New Brunswick. Sorry!

This is how it works: When I took out student loans, a portion of them came from the federal government and a portion came from the provincial government. In order to encourage students to graduate from University in a timely manner, the province is willing to forgive their portion of the loans. The only catch is that you have to owe at least $26,000 and they will only forgive their portion down to the $26,000 threshold.

That was ok with me! I owed $42,000, so I had $16,000 in debt eligible to be wiped out, erased, gone-zo.

Needless to say, I hopped on this opportunity. All it took was a single form filled out, and a copy of my transcript. Six weeks later, I logged into my student loans account and saw this:

Beautiful. Just, beautiful. After taking my grace period interest into account, my actual minimum monthly payments came out to a much less scary $301.46 per month.

But Wait, There’s More!

Now that I’ve become wise to the wonderful world of government grants, I made sure to keep my eyes and ears perked for anything else available to new graduates struggling with student debt.

It turns out there are options in almost every province for student debt relief if you look hard enough. I found another rebate for New Brunswick that essentially turns all provincial income tax paid into a rebate after tax season, up to a maximum of $20,000 over 10 years. (This rebate has since been cancelled). There also appear to be options in Ontario, and British Columbia for student debt relief, with a few qualifications of course.

Taking Advantage of Student Debt Relief is Better for Everyone Involved

Now I haven’t come across this opinion often, but occasionally someone (usually someone who had their education paid for by their parents) will haughtily inform me that I knew what I was getting into when I took those loans out, so I should do the honest thing and pay them back, instead of taking advantage of government incentives.

To these people I say: You’re only looking at a small part of the bigger picture.

You see, if I spend the next ten years paying back a massive amount of student debt, d’you know what I’m not going to be doing?

I’m not going to be buying things, things that have sales tax. I’m going to be putting my money into my student loans instead of spending that money on tax generating activities like buying houses, getting married, having babies, or investing.

I might put off going back to school and thus delay putting myself in a higher income tax bracket, or I might decide to forgo additional schooling altogether, forever limiting the amount of income tax the government may collect off me.

Most importantly, if I’m not paying my giant monster of a student loan back, I’m less likely to move out west to get a better paying job, and therefore, less likely to leave the province altogether.

The government isn’t losing out by forgiving my student loans. What they may be losing on principal and interest, they’re gaining in sales tax, income tax, and a lifelong resident of their province that they can skim money off for years to come.

So do it! If you have outstanding student loans, check out your provincial incentives, you might be very pleasantly surprised by what you find.

Have you ever taken advantage of a debt relief program? I want to know!


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  • Lauren Bee

    I love that you’re telling people about options they may have missed out on their own!

    • JordannK

      Hopefully I can save some other people some money.

  • From Shopping to Saving

    I don’t think we have anything like this in the US. We do have student loan forgiveness but you have to be a non-profit worker for 10 years consecutively with no breaks or Americorps employee. I believe we also have forgiveness plans for teachers, but nothing for normal people like me. I was just about to write a post about the options in the US. However, this is def why I am sticking with Federal never know when they’ll make new regulations or ways to help you pay down that debt.

    • JordannK

      Definitely! That’s also why I’m taking advantage of these programs as soon as possible, you never know when they’ll be cancelled.

  • Michelle

    Wow that’s great! I wish there was something like that here.

    • JordannK

      Make sure you check! You never know.

  • addvodka

    I wish I could take advantage – my student loan is a private loan with my family trust. I have to pay it back but it’s lower interest. So I don’t think the government would let it fly :) But it’s great that you can take advantage of that!

    • JordannK

      Hopefully you’re getting a pretty low interest rate on that! My student loan is a variable interest rate so I’m paying down as much as possible, as soon as possible.

  • frugalportland

    Good work, Jordann! And to those people who are stuffy about it, ask them if they’ve ever “taken advantage” of a sale, when they knew what they were getting into, walking in to a retail store.

    • JordannK

      Hehe that’s a good comparison, thanks!

  • Modest Money

    Wow that’s gotta be the most profitable few minutes of your life.  That’s awesome that you happened to find that link.  I wonder how many people are dealing with massive student loan and are totally unaware they have these kinds of options.  $16k is serious money and will go a long way to making your debt repayment more manageable.  Good score Jordann!

    • JordannK

      I’ve already passed on that little tid bit to a few other new graduates in the last year, everyone is just so shocked that its an option, it sounds too good to be true!

  • Bridget

    My minimum debt levels didn’t qualify so I didn’t receive anything like this = so bummed

    • JordannK

      Aww that sucks, but at least you’re debt is so low you don’t qualify for assistance right?

  • Country Girl

    That’s awesome! Good for you for finding this and taking advantage of it. I had a little bit of my loans forgiven, as the Ontario program automatically forgives the amount over a certain threshold (just over 7000) each year you receive the loan. Unfortunately, the program only recently changed so I only was able to take advantage of it in my last year of university. Every little bit helps though!

    • JordannK

      I have a few friends who graduated just before this program came into affect and they were NOT happy to learn that they were going to be excluded, I guess it’s just the luck of the draw.

  • See Debt Run

    What an awesome program… Seriously.

    I worry about the future of my own country (your neighbor to the South) because the government does little to encourage its populace to get educated.  Our employment issues are largely because our workforce is not trained appropriately in technical areas.  That is why so many folks from overseas can come over here and find work so easily.  If more folks could go to college and get relevant degrees, we would be in much better shape.

    Kudos to Canada for helping you get your footing after making the (smart) decision to get an education.


    • JordannK

      I think that’s why my province is so ga-ga to keep university educated people here, there’s such a derth of educated people here, it’s negatively affecting the productivity of the province. I think economic policies like this one are a great way to encourage intelligent people to become educated.

  • Mo’ Money Mo’ Houses

    This is awesome! I’m gonna forward this post onto my friend who has quite a bit of student debt to pay off, maybe she’s eligible.

    • JordannK

      I hope she can find something, every little bit helps.

  • Broke Gal NYC

    I wish we had such a thing in the states! Thankfully our federal student loans do have income-based repayment, but few options to get your loans forgiven. I hope all the people in Canada that qualify for this realize how lucky they are!

    • JordannK

      I know I do!

  • B. (Below Her Means)

    This post BLOWS MY TINY MIND. So impressed. Wishing I was Canadian (again).

    • JordannK

      We do have it pretty good. :) As long as you can take the fact that at least 30% of your income gets sapped for taxes.

  • Kris @ BalancingMoneyandLife

    That’s a great program. I’m not sure if Manitoba offers a loan forgiveness program, but I know if you live here after graduation, there are special tax credits you qualify for as an incentive. Every little bit helps. Good for you for finding, and taking advantage of, any option available!

  • TM @ youngandthrifty

    Nice score!  Also, remember to claim any student loan interest a tax credit eh!  One final tip to a fellow beer drinker that saved me a bunch of money while in school, “They say beer is an acquired taste, so you might as well acquire a taste for cheap beer.” 

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  • Plunged in Debt

    Wow this is great! Nova Scotia doesn’t have anything like that, I had a few thousand forgiven because I worked FT for x amt of weeks post graduation and we also get a ‘graduate retention rebate’ on income tax ($2500) but this might be federal? I could be wrong though, most of my school debt is in the form of LOC’s not student loans. Good for you!

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  • Thomas

    Any idea what the form is called in Ontario?

  • susan kavanagh

    Do you have any idea what I can do to repay my loan. I graduated in 1999 and its been longer than 10 years. Ive been looking on the net and can’t seem to find any solutions

  • Nat Karolina

    I think this is such an interesting post. Your story is a mirror image of my process with canada revenue. I am currently struggling with paying my student loans back. im working full time and i have the money to pay it off, but canada revenue is asking for the payment in full! but unfortunately with poor financial decisions made when i was younger, no bank will lend to me. Im finding it kind of a struggle to straighten my debt out because it feels like it is such a mess, even calling 15+ numbers and spending hours a day, i never really get anything straightened out. Does any one know if British Columbia offers any programs like this?

    • Jordann

      Hi Nat,

      You’ll need to do some googling to find out if BC offers any programs like this, but I definitely understand your frustration. I’ve spent a ton of time on the phone with various departments trying to get straight information about various programs, there’s a lot of bureaucracy to get through!

    • Indebted in Ontario

      Canada Revenue pressured me for full payment of $4000 outstanding loan from 2002, when I insisted that this was not possible, they asked for $400 a month and has now settled on $200 per month. Advocate for yourself and they will budge.

      • Nat Karolina

        How do I advocate for myself? My bank loan was denied so now they want full payment. I am now in a position of my life where I can make payments regularly but it seems as though they don’t want to give me that chance. I feel very stuck and want to make goals to move forward with my debt.

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  • Just Trying to Play the Game

    Hey, I’m really loving your blog, I’ve been unemployed for some time, and have taken a lot of time to learn to budget, and learn more about my fiances and my ‘business’ in general. I live in Toronto, Ontario, and starting off with your links, and searching more, I cannot find any reductions like the ‘timely completion benefit.’

    I currently have repayment assistance – basically a grace period where I don’t pay OSAP – because I don’t have the money – and they don’t charge me interest – except for roughly $200 that has come up since September 2013.

    * from my understanding of the OSOG, it is already applied if your were in school at a certain period of time – there isn’t an application, and I don’t see it on my NSLSC account. Perhaps it was a grant I received with my OSAP?

    My question is whether there is anyway to reduce my loan 16,000 – that is like a year and a half of payment if I pay 1,000 a month haha – do you know of anything in Ontario.

    😀 congrats on being debt free by the way, you should be really proud of yourself!

  • Whitney

    Wish this applied to those of us who took the college route!

  • Alanda

    The link is no longer working for the Timely Completion Benefit – Do you know if this is still offered in for Ontario Residents?

    • Jordann

      Hi Alanda,

      As far as I know, the Timely Completion Benefit was only ever offered for New Brunswick students. I’m going to check on the link now and see what I can do to update it though.

  • LarleeJ

    Any advice on how to proceed when your loan is from a private bank? Unfortunately, my seperated parents made too much money for me to borrow from the government. I moved from NB to the Capital to go to a better University and have more job opportunities but it was definitely more expensive. Especially that my parents were not paying for my tuition or book fees (nonetheless, they helped out with groceries and as much as they could). I graduated and found an above average salary job. So, similarly, I don’t qualify for repayment assistance. My student loan repayment plan has been 500$ / monthly for the past 2 years and I’m still over 30,000 owing, meaning many more years of financial restrictions (barely being able to live paycheck to paycheck). Any help would be appreciated!

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  • BethK

    I wish we had more programs like that here. My husband had $5,000 in student loans forgiven for working 10 years in a low-income/rural school district, but that was it– we paid off the rest ourselves. I was lucky enough not to have loans, and I thank my parents profusely for the sacrifices they made that enabled me to graduate from college without being saddled with debt. It takes work, though– do your research and choose a quality school whose graduates are in demand in the field you want; the same degree from two different schools may not be the same at all. Choose a field that has jobs available. Take advantage of scholarships, grants, and work-study programs to get that tuition bill down. Make sure you will graduate in four years or less. I found that a small private college cost far less than a big state school once we crunched the numbers and what they were willing to offer me in financial aid.

    • Jordann

      These is all excellent advice BethK! That’s pretty much what I tell all new high school graduates when they’re considering schools to go to.

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  • paige

    Does this exist in NL?

    • Jordann

      Hi Paige,

      The program I applied for was only open to New Brunswick residents.

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