IMPORTANT Information for Graduating Students

* OSAP repayment information is subject to change. Students should refer to the CanLearn website for confirmation and/or clarification of any details.

Repayment of Your Government Student Loans

Six months after completing your full-time post-secondary studies, whether you graduate, transfer to part-time studies, withdraw or take time off, you are required to begin repayment of your student loans!

It is your responsibility to contact your financial institution (for loans which you negotiated prior to August 1, 2000) and the National Student Loans Service Centre (for loans which you negotiated on or after August 1, 2000), immediately following the end of your studies to negotiate your repayment schedule and avoid default.

You can repay your OSAP loans as quickly as you like. The usual repayment period is 9.5 years; however, you may take up to 15 years for repayment. If a lump sum payment or your entire loan is paid off during the 6-month period, you must still apply for loan consolidation to determine the amount of debt reduction (e.g. Ontario Student Opportunity Grant) to which you may be entitled.
quill penTIP – Although shortening your repayment period will result in higher monthly payments, you will save a significant amount of interest.

  

 Consolidation

You may receive one or two consolidated Canada student loan agreements; one for Canada Student Loans received prior to August 1, 2000 and one for Canada Student Loans received after August 1, 2000. The consolidation agreements set out the amount you owe to the financial institution and/or the amount you owe to the Government of Canada, as well as the interest rate(s) and monthly payment amount(s) for each loan.

You will also receive consolidation information for your Ontario Student Loans. Ontario Student Loans negotiated prior to August 1, 2001 are held by financial institutions and will require separate repayment arrangements. Ontario Loans negotiated on or after August 1, 2001 are held by the National Student Loans Service Centre and are "integrated" with any Canada Student Loan held by the National Student Loans Service Centre (NSLSC) for the purposes of repayment.

quill penTIP –Keep your contact information up-to-date at the NSLSC to ensure consolidation agreements and other correspondence are received.

  

 Consolidation Date

The "consolidation date" is the first day of the seventh month following the month your full-time studies ended. On your consolidation date, the amount of interest accrued during the 6-month period after your end of study date is calculated. You may choose to pay this accrued interest or add it to your loan principal (capitalized). If you choose to capitalize the interest, your lending institution will adjust your monthly payment amount accordingly. Your first payment is due at the end of the seventh month. (e.g. if you cease to be a full-time student in April, your first scheduled payment will be in November)

  

 Interest

Interest accrues on your loan principal beginning the first day of the month following the end of your full-time study period. The actual interest rates and conditions for repayment are set at the time you enter repayment. On Canada Student Loans, the current fixed rate of interest is prime + 5% and the current variable (floating) rate is prime + 2.5%. Ontario Student Loans have an interest rate of prime + 1%.

quill penTIP - If you are able to make "lump sum" payments during the six month “payment free period” you could save a significant amount of interest!

  

 Managing Your Debt Load
The amount of loan debt that you have incurred since you began your post-secondary studies may be quite significant. Visit http://www.canlearn.ca or https://osap.gov.on.ca and use the online repayment calculator to estimate your monthly payment amounts.

  

 Debt Reduction

The Ontario Student Opportunity Grant (OSOG) reduces the annual Canada-Ontario Integrated Student Loan debt of eligible students. An application is not required.

To be eligible for the OSOG in a given academic year, you must have:

  • negotiated a Canada Student Loan and/or Ontario Student Loan during the year in excess of $7000 for a two-term program or $10,500 for a three-term program ($6500/$10,000, if you received a Canadian Millennium Bursary)
  • been enrolled full-time in two or three terms
  • completed your academic year

**Please note, you are not eligible if you have defaulted on a previous student loan(s) and/or are reassessed and your loan entitlement is reduced (i.e. you are now in over award).

  

Each year that you are eligible, the Ministry of Training, Colleges and Universities (MTCU), will write to you in the fall, of the year subsequent to your loan application, to confirm the amount of your grant. MTCU will forward payment to your financial institution or the National Student Loans Service Centre. The grant is used to pay down your Ontario student loan first.

quill penTIP - If you are an OSOG recipient, we recommend that you contact your financial institution and/or the National Student Loans Service Centre approximately 4-6 weeks after you have been notified by the Ministry to confirm the grant has been applied to the outstanding balance of your student loans.

  

 Repayment Problems

  • Speak to a financial counsellor (e.g. Catholic Family Services of Hamilton-Wentworth (905) 527-3823).
  • Contact your lending institution to discuss revising the terms of repayment of the loan. This allows the lender to consider extending the repayment period to up 15 years which lowers your monthly payments.
  • Apply for Interest Relief if you have not secured employment or your income is low. Interest relief is a government regulated debt management tool, under which the interest on your loans is paid by the federal and provincial governments for a period of time. During your interest relief period, you are not required to make any payments on your loans. Neither government makes payments to reduce the principal. Interest relief is granted for periods of 6 months up to a maximum of 30 months. Additional periods of interest relief (up to 54 months) may be available to you if you meet the eligibility criteria and have not been out of school for more than 5 years from your last full-time study period end date.

  

 Interest Relief

dollar signIf you are temporarily unable to repay your Canada-Ontario Integrated Student Loan or Part-Time Canada Student Loan because of low income, you may be eligible for interest relief. During a six-month period of interest relief, you are not required to make any loan payments.

How Interest Relief Works

During periods of interest relief you are not required to make payments on either the outstanding principal of your loan or on the interest. The Government of Ontario and/or the Government of Canada pays the interest on your behalf. Neither government makes payments to reduce the outstanding principal.

Interest relief is granted for periods of six months, up to a maximum of 30 months. You may be eligible for extended interest relief of up to an additional 24 months, provided you have not been out of out of school for more than 60 months from your last study period end date.

Once the interest relief period is over, you are responsible for making loan principal and interest payments. If you make a payment while you are receiving interest relief, it will be applied directly to the principal amount. This voluntary payment(s) will not affect your current or future eligibility for Interest Relief.

Interest Relief Programs

There are three interest relief programs that you may apply for depending on the type of loans that you have:

  • Canada-Ontario Integrated Interest Relief Program
  • Ontario Student Loans Plan Interest Relief Program
  • Canada Student Loans Plan Interest Relief Program

Contact the NSLSC and/or your previous lender (if applicable) for an application form.

quill penTIP - To extend your period of interest relief for both the Canada and Ontario Student Loans, you must re-apply every six months.

quill penTIP - YOU MUST make your required loan payments until your interest relief application has been approved. Do not neglect your payments on the basis that you have applied for interest relief. You could end up in default! Continue to make the required loan payments until notified of your approval by the National Student Loans Service Centre and your financial institution (if applicable). If you make a payment while you are receiving interest relief, it will be applied directly to the principal amount of your loan.

quill penTIP - Apply for debt reduction, if you are unable to make your payments, have exhausted all other options and you have been out of school for at least 5 years, you may apply to have your student loan principal reduced. For more information about debt reduction in repayment contact the National Student Loans Service Centre.

Graduation, Job and OSAP Default Rates for McMaster Students

  

 Medical Loan Forgiveness/Permanent Disability Benefit

Medical Loan Forgiveness

The Minister of Training, Colleges and Universities may forgive your Ontario Student loan if you have a permanent disability that will substantially reduce your earning capacity for your expected lifetime and you are unable to repay your student debts without incurring exceptional financial hardship.

To be eligible to apply for Medical Loan Forgiveness you must meet the following conditions:

  • You have a permanent disability that is expected to substantially reduce your earning capacity for your lifetime;
  • You are experiencing financial hardship repaying your Ontario Student Loan;
  • You have entered into a consolidated loan agreement;
  • You reside in Canada; and
  • You have exhausted the maximum number of months of Interest Relief that you are eligible to receive.

You are expected to use all periods of Interest Relief that you are eligible to receive for your Ontario Student loans before you apply for Medical Loan Forgiveness. The minimum amount of Interest Relief you would be expected to use before you apply for Medical Loan Forgiveness is 30 months.

Permanent Disability Benefit

If you have student loan debt from the Government of Canada, including Canada Student Loans and/or the Canada portion of a Canada-Ontario Integrated Student Loan and are experiencing exceptional financial hardship repaying your Canada Student Loan due to your disability, you may apply to the Canada Student Loans Program for a Permanent Disability Benefit which allows forgiveness of your loans. Additional information about the Permanent Disability Benefit is available from the National Student Loans Service Centre website at http://canlearn.ca.

  

 Defaults

You are responsible for repaying your loan and any other government student loan, grant, bursary and/or scholarship overpayment. If you do not make the required payments, you will be considered in default. If you default on your loans, steps will be taken to recover the debt. These steps may include reporting you to the credit bureau, turning your debt over to a collection agency and/or taking legal action. Defaults not only prevent you from obtaining additional OSAP assistance, but they seriously impair your ability to obtain credit. While you are in default, interest continues to accrue on the unpaid balance of your loans.

To repay your defaulted ONTARIO Student Loans, contact the collection agency listed on your collection notice, or call 416-326-0500 to determine which collection agency holds your account.

  

To repay your defaulted CANADA Student Loans, contact the collection agency listed on your collection notice, or call 1-888-815-4514 to determine which collection agency holds your account.

  

Graduation, Job and Default Rates for McMaster Students

  

 Bankruptcy

Borrowers that have previous bankruptcies, consumer proposals, consolidation orders or orderly payment of debt may still be eligible for OSAP assistance.

  

 Tax Implications

If you default on your loan(s) and collection is unsuccessful, the governments of Ontario and Canada have the option to withhold your income tax refund and apply the proceeds against your outstanding loan balance. The Government of Canada offers you tax relief in the form of a tax credit on the interest portion of the amount paid on your government student loans each year.

  

 Post-Graduate Studies or a Second Degree?

graduate silhouetteYou may apply for further Canada-Ontario integrated student loan funding if you return to full-time studies in an OSAP approved program at an OSAP approved institution and have not met the maximum lifetime limit of 340 weeks of post-secondary study. The lifetime limit may be extended to 400 weeks for students enrolled in doctoral programs. Students with permanent disabilities have maximum of 520 weeks on the federal portion of loans (for Ontario, exceptions may be considered). If you choose to study on a part-time basis, you will still be required to begin loan repayment after 6 months.

quill penTIP - If you intend to study on a full-time basis and do not require further OSAP assistance, you must inform the National Student Loans Service Centre and your financial institution that you are continuing your studies by completing a CIFS/Schedule 2 for both your Canada and Ontario Student Loans. When you begin your period of full-time study, visit the financial aid office at the institution you are attending, to complete the required forms. You must do this during each period of full-time study to maintain the interest-free status of your loan(s).

  

 Important Reminders

Keep An Eye On Your Credit History!credit
To verify the accuracy of your credit history information,contact Equifax at: 1-800-465-7166 or Trans Union at 1-800-663-9980.

Keep Everyone Informed!
Keep the National Student Loans Service Centre and your financial institution(s) informed of your whereabouts and status. Be sure to keep your address and banking information CURRENT!

OSAP updates may be found on the OSAP web site or on MUGSI.

  

BANK & MINISTRY CONTACT INFORMATION

 

Ontario Student Assistance Program (OSAP)

Student Support Branch
Ministry of Training, Colleges and Universities
P.O. Box 4500
189 Red River Road, 4th Floor
Thunder Bay, On
P7B 6G9
https://osap.gov.on.ca

  

National Student Loans Service Centre
P.O. Box 4030
Mississauga, Ontario
L5A 4M4
Pre-Consolidation Contact Number: 1-866-303-3503
1-888-815-4514 (within North America)
1-888-815-4556 (TTY for hearing impaired)
800 2 225-2501 (toll-free outside North America + country code)
https://nslsc.canlearn.ca/eng/default.aspx

  

Canada Student Loans Program
Human Resources and Social Development Canada (HRSDC)
P.O. Box 2090, Station D
Ottawa, ON
K1P 6C6
http://www.canlearn.ca

  

Financial Institutions

CIBC National Student Centre
1-800-563-2422

RBC Royal Bank Student Loan Centre
1-800-363-3822

Scotia Bank Government Student Loan Administration Centre
1-888-284-3044