Default Consequences

If you miss a payment on your student loans, the Alberta Student Aid Service Centre and/or National Student Loans Service Centre will send you a series of letters and emails and will phone you to provide information and tools to help you get back on track.

There are serious consequences if you miss payments (default) on your loans including the following:

  • Your credit rating will be negatively affected.
  • Your loans will be sent to a collection agency.
  • Any GST or income tax refunds you are eligible to receive will be automatically used to repay your defaulted loans.
  • The provincial and/or federal governments may take legal action against you.
  • You will lose your eligibility for further student loans until you bring your loans into good standing.

Credit Rating

A credit rating is an evaluation of the history of your loans repayment. Having a good credit rating will maximize your opportunities to qualify for future loans (perhaps for a new car or house), or even to be able to rent an apartment.

Your student loans are just like any other loan. They must be paid back. When you receive your first Alberta and Canada Student loan, it is reported to the credit bureau. You build a positive credit rating by making payments towards your student loans on time, each month. When you do not make your loan payments on time, you create a negative credit rating.

To find out what your current credit rating looks like, you can contact Trans Union or Equifax and request a report.


If you file for protection under the Bankruptcy and Insolvency Act (Canada) while in student loan repayment, be aware that:

  • Student loans are not dischargeable debts when you are discharged from a bankruptcy until a minimum of:
    • 7 years have passed since you left post-secondary studies, or
    • 5 years have passed since you left post-secondary studies, in the case of exceptional financial hardship.

  • You will still be expected to make your student loan payments. 

For more on bankruptcy, see: Student Aid Policy: Alberta Student Aid Operational Policy and Procedure Manual.

Once your loans are repaid in full, you may be eligible for more student aid.