Maintaining Interest-Free Status and Repaying Your Loan

Maintaining Interest Free Status

• If you are returning to full-time studies and are not taking out another student loan, you must notify National Student Loan Service Centre that you are currently in full-time studies.
• A Schedule 2 for Canada-New Brunswick integrated loans can be obtained and filled out by the Student Access Centre on the 1st floor of the Administration Building.
• This form can only be filled out for students who are currently in full-time classes.
• The completed form needs to be mailed or faxed to NSLSC.
• If the student had loans dated before August 1, 2001, the student must provide an Integrated Schedule 2 form to any other lenders that the student may have other than NSLSC.
• Call the lender(s) after two weeks to ensure that they received confirmation of your enrolment.
• Failure to notify your lender(s) of your full-time status can result in your loans entering repayment.

Loan Repayment

• Once you have finished your studies, you have a 6 month grace period before you will have to begin repaying your student loan. - This gives you a chance to find a job, and to begin budgeting for repayment. As soon as you finish school, you should meet with your loan provider to arrange a loan repayment schedule (i.e.: the full amount of your loan, how much interest it will accrue, what your monthly payments will be, etc.).
• Not repaying your student loans on time can prove very problematic. If you go for months at a time without making payments or contacting your loan provider, the loan may go into default, which may result in you being contacted by a debt collection agency or your credit may be affected, and you may not be able to receive loan funding in the future.
• There are several options open to you if you have little or no income and are having problems with repayment. You can:
• Re-negotiate your terms of repayment. You can do this with the lender that holds your loans. Your lender may be able to make your monthly payments smaller, but know that this will increase the life of your loan, meaning that you will end up paying more in the end. (For example: if your loan schedule is ten years at $200 per month, and you were to reduce your monthly payments to $100, your repayment would need to be stretched out longer in order to pay off the full amount plus interest).
• Interest Relief is available for only provincial loans. If you are eligible for this program, the provincial government will pay your interest on the provincial portion of your loan, so that you won't have to make loan payments. This program is available for six month periods at a time, for a lifetime maximum of 30 months. These forms can be picked up from and dropped off with your lender. As of August 1, 2009, the old federal Interest Relief Program will be replaced by the new RAP program.
• Canada Student Loans Repayment Assistance Plan (RAP) is the new federal repayment assistance program replacing the old federal Interest Relief and Debt Reduction in Repayment programs, effective August 1, 2009. 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.
• Debt Repayment Assistance is also available, for provincial student loans, after all Interest Relief has been used. You can apply to have a maximum debt reduction of $10,000 on your Canada Student Loan. These forms can be picked up from and dropped off with at your lender.