Unpaid student loans could lead to ICBC denying your licence, insurance

There is $185.5 million in outstanding student loan debt in British Columbia, and a proposed law would see to it those who neglected to pay their share could be refused a driver’s licence or car insurance by ICBC.

Finance Minister Mike de Jong says this would serves as “a collection tool,” and “a mechanism” to remind those who took out loans but opted to not pay them “they need to honour that obligation,” reports the Vancouver Sun.

Currently, ICBC is able to withhold licencing and insurance services from individuals who owe money for other missed payments, such as bridge toll fees, driving tickets, or TransLink fare evasion penalties.

Zachary Crispin, the chairperson of the Canadian Federation of Students B.C., told the CBC this proposed law did not seem like a good idea: “Missing a student loan payment, or paying late, might warrant a telephone call, but certainly not the loss of your driver’s licence.”

Crispin also believes that the high amount of unpaid student loan debt in B.C. is likely indicative of an overall hardship residents are experiencing in being able to make the payments.

De Jong, however, notes that there is relief available for those experiencing hardship, so long as they get in touch to make arrangements for assistance.

Additionally, the Ministry of Finance points out that a debtor would have to be in default for several months before the account would be flagged at ICBC: “For most debt, the direction not to issue licenses would be given once the account has been out of good standing for a year or more.”