Loan Repayment

Loan Repayment

Courtesy of Investing in Your Future

The repayment phase of your loan begins when you:

(1) graduate

(2) leave school or

(3) exceed the maximum lifetime limit 
 

You are required to fulfill your obligations and responsibilities regarding your student loans.  You are responsible for:

• signing a Consolidated Student Loan Agreement for your Canada Student Loans
• repaying your loan and all accrued and/or capitalized interest according to the terms of your Consolidated Student Loan Agreement
• notifying the National Student Loans Service Centre if you change your address, name or phone number, leave or transfer to another school, or change your graduation date

If you are having trouble making your payments, contact the NSLSC to ask questions, get clarification and research debt management measures offered by the government to help make repaying your student loan easier.

National Student Loan Service Centre
Public Institutions Division
P.O. Box 4030
Mississauga ON L5A 4M4
Toll Free: 1-888-815-4514 (within North America)
TTY: 1-888-815-4556
Toll Free: 800 2 225-2501 (outside North America, plus country code)

When is my first loan payment due?

Your first loan payment will be due the first day of the seventh month following the end of study month.

What is consolidation?

When you arrange to repay all your federal loans, federal/provincial integrated loans or provincial or territorial loans, this is called consolidation.

During the six-month grace period after you leave school, NSLSC will mail you a Consolidated Student Loan Agreement for the Canada Student Loan(s) it services for you.  This agreement will provide information about the amount of your loan, your interest rate, your payment schedule, the amount of each loan payment, and your amortization period (how long it will take to repay your loan).  Make sure to read and complete the agreement and return it.  A signed agreement will allow you to apply for help with repayment if you experience financial difficulty.

Do I repay my Canada Student Loan to the NSLSC or to a financial institution?

It is possible you may have to repay your student loans to both, depending on when you received your CLS:

• If you hold CSL received on or after August 1, 2000, you repay your CSL to the NSLSC
• If you received a loan before August 1, 2000, you repay your CSL to a financial institution
• If you received loans before, on, and after August 1, 2000, you repay your CSL to the NSLSC AND your financial institution

Interest Relief Program

The Canadian Government will pay the interest on full-time or part-time Canada Student Loans on behalf of the debtor if she or he is experiencing financial hardship due to unemployment, underemployment or disability.  Interest Relief is available in six (6) month increments and renewable up to a maximum of 30 months.

To be eligible for Interest Relief:

• You must be currently living in Canada or on an international internship.
• You must have signed a Consolidated Student Loan Agreement.
• You must not already have received Interest Relief for the maximum period allowed (30 months).
• You must not have defaulted on any previous Canada Student Loans.
• Your current loans must be in good standing.
• Your total family income and the size of your monthly loan payment will be determining factors.
• Special circumstances, such as emergency health expenses or other emergency financial situations, will be taken into account.

Check with your loan service provider about other specific eligibility requirements and contact them to request an Interest Relief application.  If you require further Interest Relief, you must re-apply at the end of each approved six-month period.

EXTENDED INTEREST RELIEF:

With this program, an additional 24 months of Interest Relief may be available to you.  To qualify for Extended Interest Relief you must meet the following conditions:

• You have used the maximum 30 months of Interest Relief.
• You must be within five (5) years from when you finished school
• Your repayment term must be extended to the maximum 15 years from when you finished school

DEBT REDUCTION:

You may be eligible to receive a payment toward the principal of your loan if you meet the following criteria:

• You remain in financial difficulty for more than five years after you have completed your program of study
• You have exhausted interest relief
• Your annual loan payments exceed a certain percentage of your income

The maximum amount of Debt Reduction is $10,000 or 50% of the principal of your loan, whichever is less.  Contact your loan service to apply for Debt Reduction.

Permanent Disability Benefit

If you experience exceptional financial difficulty repaying you CSL due to a permanent disability, you may qualify for the Permanent Disability Benefit, which allows for the forgiveness of your CSL.  For more information or to apply, contact the NSLSC.

Revision of Terms

Revision of Terms helps you decrease your monthly repayment amount by extending the amount of time it will take you to pay back your loan, should you be unable to replay your government student loans as agreed to in your Consolidated Student Loan Agreement.

NEW INFORMATION FOR NOVA SCOTIA STUDENTS

Programs Help Graduates Manage Student Loan Debt

University and college graduates will have more flexibility in managing their student loan debts through two new provincial government programs introduced August 8, 2007.  Any graduate or apprentice who has a student loan in good standing can apply for the programs immediately.

The Enhanced Repayment Assistance Program will reduce the payments for graduates who are having difficulty paying their provincial student loans.   A graduate who is finding it difficult to pay a provincial student loan would apply to the Enhanced Repayment Assistance Program through the Department of Education's student loans office. Staff would review the application and consider how much student loan debt the graduate has, how much they earn, how many dependents they have and other factors.

If the graduate's debt to income ratio is too high, their payments will be reduced to more affordable levels for six months. The Department of Education will pay the interest to keep the loan in good standing. The graduate can reapply to the program for additional six-month periods, up to a total of 54 months. Each renewal application would require proof of income.

The provincial Income Relief Program, which the Enhanced Repayment Assistance Program replaces, had a 30-month limit.

The Payment Deferral Program will allow graduates to postpone their provincial student loan payments until they can better afford them; i.e., graduates who must accumulate several years of on-the-job experience before they are deemed qualified for a professional designation.

Graduates and skilled trades workers who must complete an internship or apprenticeship that lasts longer than 12 months can apply to have payments deferred for as long as it takes to qualify for their designation. 

Other graduates can access the Payment Deferral Program, in two six-month increments, for up to a total of 12 months. 

Their student loan, plus interest accumulated during the deferral, would still be paid in full but usually when their income is higher. The interest on the loan would be calculated at the rate that the government borrows money, which is a lower rate than the graduate would normally receive from a financial institution.