http://oncampus.macleans.ca/education/2008/04/07/profits-vs-students-interest/3/
In principle, anyone can sue anyone if they don't keep up with original contract agreement and don't have something formal, preferably in writing, concerning an arrangement for reduced payments. But I doubt that your fiance will get sued; maybe she'll get her income tax return held.
As you can see from links like the above, there's a bit a collection crisis going on.
You might also want to read the blogs on John Leblanc's "canadian financial wellness" student loan forum. Comparing your experience to others will give you an idea of what's happening. Only try to ignore the annoying infomercial testimonials if you do.
Ray

