Personal Finance

Ontario Student Loan Default from 1996 -- Question re Statute of Limitations

  • Last Updated:
  • Jan 22nd, 2011 10:26 am
Tags:
None
Deal Addict
User avatar
Apr 22, 2005
1244 posts
185 upvotes

Ontario Student Loan Default from 1996 -- Question re Statute of Limitations

I had an OSAP loan back in 1996.

This was back when the bank would take the loan and it was funded through the government (two parts to loan, federal part and provincial part).

Long story short, I defaulted on about 7k owing for the federal portion of the loan. For several years collection agencies called me. After awhile the calls stopped. I called one of the collection agencies around 98 - 99 and they said that the loan had been recalled by the bank.

Around 2005 I tried to track down who I needed to pay spending hours on the phone. Nobody could find any record of the loan. Not on my credit bureau, not through National Student Loan Centre, various government departments, I even called ScotiaBank with the loan number and they couldn't find it (I think that I got the loan in the year just before they changed the whole OSAP system to one integrated loan done through the government instead of the banks.)

Finally I gave up and figured as long as it's not hurting my credit score who cares.

Has the statute of limitations passed on this debt? I know 10 years needs to go by from when you were last in school, however I returned to college in 2005 for one year.

Just worried that one day in the future I'm going to get a call "You owe us the original 7k + god knows how much interest".
13 replies
Deal Addict
Oct 30, 2008
2120 posts
53 upvotes
Toronto
That's very weird. Normally banks don't forget you owe them money and the government would just withhold your income tax refund and apply it to any debts you owe them. If it doesn't show on the bureau, I wouldn't wake up the dead. Generally, outstanding student loans are not easy to get rid of.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV
Sr. Member
Apr 8, 2006
875 posts
96 upvotes
was in the same situation but my balance was around 3,000 tried to track it anywhere but not a chance, then i was told since it was a government backed loan, then the government paid it. But nothing specific regarding my account, basically got told to forget about it.
Member
Mar 28, 2007
267 posts
9 upvotes
whow ....you guys should be jail.
better still deported ..
great role models for yor kids..
i guss you guys hada free ride regarding yor education ..
trust you guys are failures
Sr. Member
Apr 8, 2006
875 posts
96 upvotes
issy wrote:
Nov 18th, 2009 8:48 am
whow ....you guys should be jail.
better still deported ..
great role models for yor kids..
i guss you guys hada free ride regarding yor education ..
trust you guys are failures
you don't know anyone's situation so you shouldn't judge people, maybe should just take em out behind a house and shoot em?

Get a life. $3,000? free ride? lol I dunno what type of education you have, but I assure you for what you paid it appears you haven't been taught any manners. And of course should have invested in better spelling and grammar classes.
Member
Dec 2, 2007
274 posts
6 upvotes
masalma wrote:
Nov 18th, 2009 11:17 am
you don't know anyone's situation so you shouldn't judge people, maybe should just take em out behind a house and shoot em?

Get a life. $3,000? free ride? lol I dunno what type of education you have, but I assure you for what you paid it appears you haven't been taught any manners. And of course should have invested in better spelling and grammar classes.
this is gold.
Newbie
Apr 6, 2009
29 posts
masalma wrote:
Nov 18th, 2009 11:17 am
you don't know anyone's situation so you shouldn't judge people, maybe should just take em out behind a house and shoot em?

Get a life. $3,000? Free ride? Lol i dunno what type of education you have, but i assure you for what you paid it appears you haven't been taught any manners. And of course should have invested in better spelling and grammar classes.
+1
Newbie
Apr 6, 2009
29 posts
My cousin actually got into this situation last year.

Following university she decided to do a Peace Corps type thing for a few years (which turned into seven years) and her parents offered to pay off the rest of her OSAP debt as a graduation gift.

She returned to Canada last year to start a full time engineering job and one day, while she was cleaning out the den of her recently retired dad, found a stack of collection bills concerning the OSAP loan. Turns out her parents simply forgot or ignored it. I know, nice job. She spent the next two weeks trying to track down the loan so she could figure out what the status was, how much she owed and how she could pay it off.

But after numerous calls to the OSAP clearing house, Scotia Bank, Revenue Canada, the loan had simply vanished. I always thought it was weird but maybe not THAT uncommon after seeing this thread.
Sr. Member
Mar 8, 2009
612 posts
10 upvotes
Bamelin wrote:
Nov 17th, 2009 11:55 am
I had an OSAP loan back in 1996.

This was back when the bank would take the loan and it was funded through the government (two parts to loan, federal part and provincial part).

Long story short, I defaulted on about 7k owing for the federal portion of the loan. For several years collection agencies called me. After awhile the calls stopped. I called one of the collection agencies around 98 - 99 and they said that the loan had been recalled by the bank.

Around 2005 I tried to track down who I needed to pay spending hours on the phone. Nobody could find any record of the loan. Not on my credit bureau, not through National Student Loan Centre, various government departments, I even called ScotiaBank with the loan number and they couldn't find it (I think that I got the loan in the year just before they changed the whole OSAP system to one integrated loan done through the government instead of the banks.)

Finally I gave up and figured as long as it's not hurting my credit score who cares.

Has the statute of limitations passed on this debt? I know 10 years needs to go by from when you were last in school, however I returned to college in 2005 for one year.

Just worried that one day in the future I'm going to get a call "You owe us the original 7k + god knows how much interest".

Student loans haunt you forever. Trust me.

I collect on them all the time. Early 90's ect.
Newbie
Jan 21, 2011
1 posts
Toronto
My loans were sent for collections in 1996. CIBC nailed me: they didn't process my payment forms, and sent the loans to the gov for the guarantee immediately. I couldn't make any arrangement.

For the last 14 years, I've been dodging credit. I never applied for anything. Once a year, at Christmas, I'd get a call at my parents' house. The last one was in 2001.

I assumed they'd follow me forever.

However, I've had a clean credit history since 2006, at least. I applied for a credit card last year; granted immediately. Others followed. I kept it clean, and I also got a line of credit ($35k).

There' no record of my loan. They don't take it back in taxes. After 10 years, it's been completely disappeared.

I did a full credit check: Nothing.

I'm no longer unfindable. I have phones, addresses, everything. Not a peep. No word.

In a year's time, I may be able to buy a house. I assumed it would follow me forever.

In 2002, there was a court decision: All CRA and crown debts are uncollectable after 2 years, same as all other debts. There are no more exceptions.

No reason to worry any more.

it shocks me that this is the case, but when I discovered I can get a phone - a credit card - anything - and I could have for years - I was shocked.

I could have done this all in 2006. I didn't have to wait until 2010.

Just a word for the rest of you.
Deal Fanatic
User avatar
Apr 16, 2006
5570 posts
161 upvotes
dada2 wrote:
Jan 22nd, 2011 2:20 am
My loans were sent for collections in 1996. CIBC nailed me: they didn't process my payment forms, and sent the loans to the gov for the guarantee immediately. I couldn't make any arrangement.

For the last 14 years, I've been dodging credit. I never applied for anything. Once a year, at Christmas, I'd get a call at my parents' house. The last one was in 2001.

I assumed they'd follow me forever.

However, I've had a clean credit history since 2006, at least. I applied for a credit card last year; granted immediately. Others followed. I kept it clean, and I also got a line of credit ($35k).

There' no record of my loan. They don't take it back in taxes. After 10 years, it's been completely disappeared.

I did a full credit check: Nothing.

I'm no longer unfindable. I have phones, addresses, everything. Not a peep. No word.

In a year's time, I may be able to buy a house. I assumed it would follow me forever.

In 2002, there was a court decision: All CRA and crown debts are uncollectable after 2 years, same as all other debts. There are no more exceptions.

No reason to worry any more.

it shocks me that this is the case, but when I discovered I can get a phone - a credit card - anything - and I could have for years - I was shocked.

I could have done this all in 2006. I didn't have to wait until 2010.

Just a word for the rest of you.

Source? Seems like a very extreme ruling on the part of the courts, especially since this involves the collection of a public debt.

Even if there was such a court decision, I'd be very surprised if Parliament didn't enact legislation shortly after the decision was made to overrule the common law. If this was done, the decision of the court would essentially be meaningless today.
Deal Addict
User avatar
Sep 26, 2007
3960 posts
143 upvotes
SC
Bamelin wrote:
Nov 17th, 2009 11:55 am
I had an OSAP loan back in 1996.

...

Long story short, I defaulted on about 7k owing for the federal portion of the loan. For several years collection agencies called me. After awhile the calls stopped. I called one of the collection agencies around 98 - 99 and they said that the loan had been recalled by the bank.

...

Finally I gave up and figured as long as it's not hurting my credit score who cares.

Has the statute of limitations passed on this debt? I know 10 years needs to go by from when you were last in school, however I returned to college in 2005 for one year.

Just worried that one day in the future I'm going to get a call "You owe us the original 7k + god knows how much interest".

interesting that you knew the loan was funded through the government yet you try to pay it back to the CA and bank and just gave up there.

chances are if it's not on your credit report then there's nothing to worry about. i would say we all paid for it but given ontario's debt size it's more likely it was just thrown into the gaping hole.

afaik it is 10 years then if you declare bankruptcy it can't follow you around anymore.
but since you went back to school it wouldn't apply.
"We don't have a soul... We are a soul. We have a body." ~C.S Lewis
Deal Addict
User avatar
Sep 26, 2007
3960 posts
143 upvotes
SC
Octavius wrote:
Jan 22nd, 2011 2:58 am
Source? Seems like a very extreme ruling on the part of the courts, especially since this involves the collection of a public debt.

wouldn't apply to osap.
"We don't have a soul... We are a soul. We have a body." ~C.S Lewis
Sr. Member
Jul 25, 2005
916 posts
45 upvotes
I graduated in 1996 and celebrated my last loan payment two years ago this coming April, with my wife and I being able to afford to put in a pool for the kiddo. Reading this thread is a real bummer. If only I had known that I could have simply ignored my loans and skated on all those payments.

I must say how commendable it is for these debtors to make inquiries 10+ years later with a few phone calls. Good for you.
× < >

Top