Heads Up on Student Loans
I’ve started a small whirlwind on the site by reporting that federal/provincial student loan debt is not reported on credit histories. I might be wrong. Gawd! Say it ain’t so!
I was told that federal and provincial student loans were not reported on credit histories. That only applied to federal/provincial guaranteed loans — not to private student loans offered through financial institutions, or to loans where federal/provincial student loans have been consolidated. And I’ve seen dozens of credit reports that do not contain information about federal/provincial student loan debt — not even when those loans have gone into default! Go figure.
But Blaine has. As a watchful monitor of my site — and former lender — Blaine says that he’s seen reporting on federal/provincial student loans in Canada. He says:
I was a lender for over 6 years and I can tell you that they certainly do appear - at least Transunion tracks them for sure. Also, MANY of them were showing R5’s in their history too. Beware - the government student loan centre is notorious for losing paperwork for interest relief and payment setup.
So I’m looking deeper. Here’s what the Coalition for Student Loan Fairness says:
Once your student loan goes into repayment (whether it is a provincial, federal, or integrated loan), it is reported to each of the major credit bureaus monthly.
Canlearn.ca says:
Should you default on your loan, the NSLSC, your financial institution and the Government of Canada or Ontario will take steps to recover the debt, which may include reporting you to a credit agency, using a private collection company, and/or taking legal action.
Comments on canadastudentdebt.ca seem to reinforce what I was told about non-reporting of student loans. However, once again, the non-reporting seems to be sparodic at best, and punitive at worst. So while some people have experienced the non-reporting of their student loan repayments, it isn’t consistent. And while some credit reporting agencies seemingly do not show student loans on their credit reports — particularly those ordered online — this, too, is inconsistent.
I officially take back everything I’ve said about student loan reporting and am now working with the rule: All debt is reportable.
February 22nd, 2008 at 7:58 pm
I know my student loans that were through the CIBC were reported to the credit bureaus regularly as I found out when they errored and my loans showed up as R9 on my credit report.
I spoke with their Student Loan Centre in regards to correcting this, they stated they would report their error. I waited for several months, then got a new copy of my credit report, it was still there. Another month or so, and it was gone because of the timeframe.
I have a Student Loan from the National Student Loan centre, but don’t know yet if it’s being reported as I started paying on that one last year. I’ll be requesting my free credit report this month.
Do you recommend getting copies of one’s credit report from all the Credit Bureaus? I know there is Equifax, and TransUnion. Are there any other bureaus? Do Canadians have credit scores, and does that number appear on some credit reports and not other, or is that a seperate request?
February 23rd, 2008 at 11:14 am
Cynthia, I can answer that one for you. Yes, as a former banker, I recommend that you check up on both Equifax and Transunion (there are only two in Canada). They are both separate and independent companies and they do not share information with each other. So, in your situation where you found an error, the creditor may have fixed one bureau and not the other. I hope that’s helpful!
As for the reporting of student loans on the credit bureau, the ones I’ve seen were in repayment or previously had gone into repayment. Once it’s on there though, it’s not coming off (e.g. if you go back to school). A HUGE pitfall seemed to be when a person takes a short time off and then returns to school - they student loans people don’t always continue the payment free status - then the loans go into repayment and go on the credit bureau - and then because the student loans centre doesn’t have your account info to take payments out of the loan goes into default - and then they don’t bother to call or warn you until the loans are way past R5. I’m not sure where the fault lies here because students are also notorious for not opening their mail (or it’s all being sent to their parents house where they’re not living and it just piles up). A lot of these credit bureau woes could be prevented if people read their mail and made sure their mail was going where they are actually living.