Repaying your Full-Time Student Loans
Your Responsibilities Provide lender(s)* with your name change, address change, changes in full-time or part-time student status Provide your lender(s)* with proof of enrollment for each study period you are enrolled in even if you are not applying for a new loan; Begin monthly repayment of the accumulated total loan principal and interest by the first day of the seventh month after you cease to be a full-time student; Begin monthly repayment of the total loan principal and interest by the first day of the seventh month after the documented study period end date; Begin monthly repayment of the total loan principal and interest by the first day of the seventh month after you withdraw; Begin monthly repayment of the total loan principal and interest by the first day of the seventh month after you reduce your course load to less than 60% (40% with documented permanent disability); Begin monthly repayment of the total loan principal and interest within 340 weeks (400 weeks for doctoral programs, 520 weeks for students with permanent disabilities) from the date you first negotiated your Canada/ Ontario Student Loan unless your first Canada/Ontario Student Loan was negotiated before August 1, 1995 in which case you have 520 weeks before repayment is required; Consult the repayment terms and conditions on your loan documents for exact wording. *Your lender refers to the bank where you cashed your student loans and the Governments of Canada and Ontario. The National Student Loans Service Centre administers all Canada Student Loan agreements/accounts as of August 1, 2000 and all Ontario Student Loan agreements/accounts as of August 1, 2001. Address: National Student Loans Service Centre, Public Institutions Division, P.O. Box 4030, Mississauga, Ontario L5A 4M4 Telephone: 1 888-815-4514 (within North America) 800 2 225-2501 (outside North America plus appropriate country code)
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Frequently Asked Questions
When do I have to begin repaying my loans? Your first payment is due on the seventh month after you cease to be a full-time student. This is your "Consolidation Date". While you are a full-time student, (i.e., 60% course load or greater OR 40% or greater if permanently disabled) the Federal and Provincial governments pay the interest on your student loans. You are responsible for arranging repayment with your lender(s) before your six-month period expires by signing a Consolidation Agreement/Loan Repayment form. This will specify your monthly payments, the term and the interest rate. You are responsible for the interest charged from the first day of the month following completion of full-time studies. As of your consolidation date, the amount of interest accrued in the sixmonth period after your studies ended is calculated, and you can either pay the interest or add it to your loan principal. Where do I repay my loans? Canada Student Loans received prior to August 1, 2000 or Ontario Student Loans received prior to August 1, 2001 must be repaid directly to the financial institution that issued them. Loans received after the above dates must be repaid through the National Student Loans Service Centre. Can I begin repayment before the six-month period is up? Yes, you can begin repayment as soon as you wish, however the government does not allow you to consolidate your loans before the end of the six-month period. How does eligibility for the Ontario Student Opportunity Grant Program affect my repayment? The Province of Ontario automatically determines your eligibility for this grant (Loan Forgiveness) on an annual basis after verifying your income and if applicable, your parents' or your spouse's income. The grant payment is sent directly to your lender to pay down your Ontario Student Loan. The Ministry of Training, Colleges and Universities will send you a letter indicating the amount of your grant. What will the interest rates be? No one can predict what the interest rate will be at the time your loans are due for repayment, however it is safe to assume the interest rate will be similar to current interest rates charged by the banks for a consumer loan.
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Time Frame (Payments optional) during six-month grace period (Repayment must commence) after six-month grace period expires
Interest Rate CSL
Interest Rate OSL
Maximum floating interest rate of Prime interest rate + 1% prime + 2 ½% per year Maximum floating interest rate of Prime interest rate + 1% prime + 2 ½% OR maximum fixed interest rate of prime + 5%
What will my monthly payments amount to? The amount of your monthly payments will depend on the amount of money you owe, the interest rate and the length of time you repay the loan. The following table gives you a sample of monthly payments including principal and 10% interest repaid over five, ten or fifteen years. The longer you take to repay your loans the greater the interest portion amounts to. LOAN MONTHLY PAYMENT OVER 5 YEARS INTEREST COST MONTHLY PAYMENT OVER 10 YEARS $132 $ 264 $ 396 $ 529 $ 661 INTEREST COST MONTHLY INTEREST PAYMENT COST OVER 15 YEARS $ 107 $ 215 $ 322 $ 430 $ 537 $ 9,343 $ 18,686 $ 28,029 $ 37,372 $ 46,714
$ $ 212 10,000 $ $ 425 20,000 $ $ 637 30,000 $ $ 850 40,000 $ $ 1062 50,000
$ 2,748 $ 5,496 $ 8,245 $ 10,993 $ 13,741
$ 5,858 $ 11,716 $ 17,574 $ 23,432 $ 29,290
What if I am unable to afford the monthly payments? If you have a low income contact your lender(s) and discuss your financial situation. You may be able to temporarily reduce your monthly payments or you can apply to the Interest-Relief Plan. What is interest-relief? Interest-relief is available for both Canada and Ontario Student Loans/Canada-Ontario Integrated Student Loans. The governments will pay the monthly interest owing directly to your lender while you are covered under these programs and no monthly payments are required on the principal. Relief is for six-month periods at a time up to 30 months. To be eligible for interest-relief you must: 3
Be living in Canada and available for work; Have consolidated your loans; have a low monthly gross income as determined by the plans; Discussed a reduced monthly repayment plan with your lenders; Not have used up the 30 months interest-relief under Canada Student Loans and Ontario Student Loans programs. Not be in default.
How do I apply for interest relief? An application is available from the National Student Loans Service Centre or your financial institution. You must submit your application to your lender, who will then obtain approval from the Federal and Provincial governments. You will be advised whether or not you have qualified and the number of months of interest-relief granted to you. Before the qualifying months of interest-relief expires, (usually six months), you must reapply for interest relief if you are not in a position to repay every month. What if I have used up my interest-relief period and am unable to afford repayment? Revision of Terms: You may extend your loan repayment period to 15 years (after the 30 months of Interest Relief have been exhausted). Extended Interest-Relief: You can request an extension of interest-relief from 30 months to 54 months during the five years after leaving school. If you encounter difficulty beyond this, you may apply for Debt Reduction. What is debt reduction? Debt Reduction is available for Canada Student Loans if you have exhausted all other sources and five years have passed since you left school, and you remain in financial difficulty. Debt Reduction reduces your principal loan if your annual income payments exceed a given percentage of your income. The maximum debt reduction is $10,000 or 50 percent of your principal loan whichever is less. What happens if I simply don't repay or if I declare bankruptcy? If you fail to repay your student loans your debt may be turned over to a collection agency, your credit rating may be affected adversely, your income tax refund can be withheld and you will not be eligible for student loans in the future. You cannot avoid repaying your Canada Student Loans, Ontario Student Loans or your Canada-Ontario Integrated Loans by declaring bankruptcy for a period of ten years after the end of your studies.
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What if I have a permanent disability? If you have a permanent disability as defined by the OSAP program** you are eligible to receive OSAP funding/interest-free status at a 40% course load. **A permanent disability is defined as a functional limitation that is caused by physical or mental impairment that restricts your ability to perform the daily activities necessary to participate in studies at a post-secondary level or in the labour force, and that is expected to remain with you for your expected natural life. If you encounter difficulty repaying OSAP student loans due to your disability you may qualify for the Permanent Disability Benefit. Please contact the National Student Loans Service Centre to obtain an application. National Student Loans Service Centre Public Institutions Division P.O. Box 4030 Mississauga, Ontario L5A 4M4 Telephone: 1-888-815-4514 (within North America) 800-2-225-2501 (outside North America plus appropriate country code) What if I return to school? If you return to full-time studies (60% course load per term; 40% course load per term with a documented permanent disability) you can stop your monthly loan payments in either of two ways: 1. Apply for full-time OSAP and cash your student loans; or 2. Have a schedule 2 (CIFS-Confirmation of Enrolment) signed by your Registrar and have the completed form processed by the school within your academic year. FORM NEEDED (Schedule 1) Canada-Ontario Integrated Student Loan Certificate of Loan Approval and Eligibility (Schedule 2) Canada-Ontario Integrated Student Loan PURPOSE Disburses loan funds and confirms full-time study to study-end date and stops repayment of loans Confirms full-time study to study-end date and stops repayment of loans WHEN SIGNED At the earliest on the first day of classes but before the end of the academic year. Cannot be backdated VALID TO Study end date shown on the form or the date you drop to below a course load of 60% or withdraw, whichever comes first.
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Loan assistance and interest-free status on your Canada – Ontario Integrated Student Loans is available for a maximum of: 520 weeks (10 years) if you received your first loan before August 1, 1995 or if you have a permanent disability OR 340 weeks (6 ½ years) if you received your first loan after August 1, 1995 or 400 weeks if you are enrolled in a doctoral program.
What happens to the interest during the summer while I am not in school? Since the program allows you a six-month period before expecting repayment, you can apply for loans for each academic year (typically September to April) and not be required to repay during the summer months (usually May to August). If you return to full-time studies within the sixmonth period and inform your lender of this, the government will pay the interest for you. If you do not return to full-time studies, the last six months of interest is capitalized or added to the principal of your loan. - See also “When do I have to begin repaying my loans?” I am planning to go on my co-op work term, study-elsewhere, or internship program soon. Will I have to repay my student loans? Co-op Program at Scarborough and Study Elsewhere/Student Exchange Programs: You are eligible to apply for OSAP assistance for courses you register in and maintain your interest-free status while registered full-time in these programs. To do this, you must apply for OSAP assistance or if you do not wish to apply for OSAP you must have a Schedule 2 form signed by your registrar and processed by Admissions and Awards within the study period (not to exceed 12 months). Internship Programs: (Co-op Japan Program, Pharmacy, Professional Experience Year, Medicine): You will have to begin repayment of your student loans six months from your last study end date documented at your lender(s)*. You are not eligible to apply for OSAP assistance or maintain interest-free status. If you are unable to pay the monthly payments you may apply for interest-relief. See information on “Interest-Relief”. NEED FURTHER INFORMATION? Visit the Canada Student Loans Program website: http://www.canlearn.ca/ Visit the Ontario Student Loans Program website: http://osap.gov.on.ca
http://www.adm.utoronto.ca/fa/counselling/loan_repayment.htm Last Updated: June 2005
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