Maintaining Interest-Free Status and Repaying Your Loan

Interest Free Status:

• If you the student is returning to full-time studies and not taking out another student loan, lenders, the National Student Loan Service Centre and the BCSL Service Bureau must be notified that the student is currently in full-time studies.
• A Schedule 2 for Canadian loans and a Certificate 2 for BC loans are obtained and filled out by the Student Access Centre on the 1st floor of the Administration Building.
• These forms can only be filled in by the Student Access Centre when the student is currently in full-time classes.
• Completed forms need to be mailed or faxed to the appropriate lenders.
• Call the lenders after two weeks to ensure that they received confirmation of enrollment.
• Failure to notify lenders of full-time status can result in the student's loans entering repayment.

Loan Repayment:

• Interest begins to accrue on Canada and BC Student Loans as soon as the study period is completed. Six months later, the first payment on the loans is expected.
• For loans received before August 1st, 2000, contact the bank holding the student loan account(s) to discuss repayment requirements. For loans received on or after 1 August 2000, contact the National Student Loan Service Centre to discuss repayment requirements for Canada Student Loans, and contact the BC Student Loan Services Bureau to discuss repayment requirements for BC Student Loans.

Interest Relief:

Starting August 1, 2009, only the BC Student Loans programs will have an Interest Relief program in place for students who finished their full-time studies and are having difficulty repaying their outstanding student loans due to unemployment or underemployment. If students qualify, they will not have to make any interest or principal payments during the Interest Relief period. The old federal Interest relief program will be replaced by the new federal Repayment Assistance Program, effective August 1, 2009.

Canada Student Loans Repayment Assistance Program (RAP):

Starting August 1, 2009, the federal Repayment Assistance Plan (RAP) will replace the old federal Interest Relief and Debt Reduction in Repayment programs, and students currently accessing these programs will be transitioned to RAP.

This program is designed to help students experiencing financial difficulties in repaying their Canada Student Loans.

Under RAP:

• No student will repay Canada Student Loans for longer than 15 years.
• Students will have to start making payments after their grace period ONLY if their gross annual income exceeds $20,210.
• Payments will not exceed 20% of their income.
• Payments will be applied to loan principal first - the Government of Canada will pay any unpaid interest.
• Students can apply for RAP by contacting NSLSC.

BC Student Loans Interest Relief:

As of August 1, 2002, BC students are no longer required to receive Interest Relief on their Canada Student Loans before applying for Interest Relief on their BC Student Loans.

• If students are currently in repayment of your BC Student Loan, and are not in default of your outstanding BC Student Loans, they may be eligible for BC Interest Relief. Interest-free period lengths, maximums and extensions are the same as for the Canada Student Loans Interest Relief Program.
• If BC Student Loans and Canada Student Loans are held by the same bank and the student has already applied for Interest Relief on a Canada Student Loan, the student will automatically be assessed for Interest Relief on outstanding BC Student Loans. If your BC Student Loans and Canada Student Loans are held by different banks, you must fill out a separate application for BC Interest Relief. Application forms are available at your bank and from the Student Services Branch. In addition, BC will now consider your federal and provincial loan payments against your family income when calculating your eligibility for Interest Relief.

Debt Reduction and Repayment Program:

The purpose of the Debt Reduction and Repayment Program (DRR) is to assist students who have exhausted all other options for repayment, including loan remission, revision of terms and interest relief, and are still unable to repay their debt due to low income. The outstanding BCSL debt is compared to the current income of the student and, if eligible, the outstanding debt will be reduced to a level that will enable students to have affordable monthly payments based on their current income. In some cases, the BCSL will be eliminated due to inability to repay.

• Students must have exhausted all available Interest Relief.
• Students must have an amortization period of at least 15 years.
• Sixty months must have passed since students' most recent study end-date.
• The loan must be in good standing.
• Students must demonstrate that they have an income stream to support the post-reduction repayment (ability to pay will be based on family income).
• Students may obtain an application for the BC DRR Program at the lending institution holding the student loan or from the BC Student Loan Services Bureau.

Starting August 1, 2009, the federal Debt Reduction in Repayment program will be replaced by the new RAP program.