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.
 TIP
– Although shortening your repayment period will result in higher
monthly payments, you will save a significant amount of interest.
Consolidation
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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.
TIP –
Keep your contact information up-to-date at the NSLSC to ensure
consolidation agreements and other correspondence are received. |
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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) |
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Interest
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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%.
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| TIP
- If you are able to make "lump sum" payments during
the six month “payment free period” you could save
a significant amount of interest! |
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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 http://osap.gov.on.ca
and use the online repayment calculator to estimate your monthly
payment amounts. |
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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).
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| 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. |
|
TIP - 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. |
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Repayment
Problems
If
you experience difficulty repaying your student loans, investigate
your options!
•
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.
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Interest
Relief
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If
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
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| Contact
the NSLSC and/or your previous lender (if applicable) for
an application form. |
| TIP
- To extend your period of interest relief for both the Canada
and Ontario Student Loans, you must re-apply every six months. |
| TIP
- 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. |
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TIP
- 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. |
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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.
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| 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.
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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. |
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Bankruptcy
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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. |
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Post-Graduate
Studies or a Second Degree?
 |
You
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. |
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TIP
- 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). |
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Important
Reminders
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Keep
An Eye On Your Credit History!
To verify the accuracy of your credit history information,contact
Equifax at: 1-800-465-7166 or Trans Union at 1-800-663-9980.
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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. |
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CONTACT
INFORMATION
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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
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