Maintaining Interest-Free Status and Repaying Your Loan

Interest-Free Status

• It is important to know where all your loans are held and to keep in contact with the administrators of each loan to update them on your status as a student. It is your resposniblity as a borrower to keep your student loans in good standing.
• If you are returning to full-time studies and not taking out another student loan, you must notify National Student Loan Service Centre that you are currently in full-time studies. Because Newfoundland and Labrador loans are officially integrated with Canadian Student Loans, if you took loans out after August 1, 2001, you have one national lender.
• A Schedule 2 for Canada-Newfoundland and Labrador 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 whoever their lending institution was, as well as send a copy to the National Student Loan Service Centre.
• 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

• All students have a 6 month “grace period” upon conclusion of their studies, whether they have graduated or not, in which to find work and make arrangements with their lending institutions for repayment.
• During this 6-month period your Canada-Newfoundland and Labrador student loans accrue interest at a rate of prime + 2.5%.
• As soon as you finish school, you should contact 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,…).
• 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. As a result, your loans will go to collections, your credit rating will be dramatically affected and you may not be able to receive loan funding in the future. There are options available to you if you are having difficulties with repayment such as:

Contact National Student Loan Service Centre at 1-888-815-4514 for information on any of the following repayment assistance programs.

Interest Relief:

• Available to borrowers who are experiencing undue hardship in repaying their loan due to low income.
• If approved, you will not be charged interest on your student loan and you will not be required to make monthly loan payments during approved periods of Interest Relief.
• Interest Relief is approved for 6-month periods, up to a maximum of 30 months at any point during the repayment of your student loan.

Extended Interest Relief:

• If you are still unable to make your payments after having exhausted all Interest Relief, you may be eligible to receive Extended Interest Relief.
• You must not have been out of school for more than 60 months (5 years).
• You can extend Interest Relief benefits for up to 54 months from when you left school.

Debt Reduction Repayment:

• This program is designed to reduce the outstanding principle balance of the federal portion of student loans.
• Debt reduction lowers the principle amount of your loan and reduces your monthly loan payment to an affordable level, based on your income.
• You may qualify if:
• Five years have passed since you last attended a post-secondary institution;
• You have exhausted all Interest Relief; and
• Your loan payments exceed a given percentage of your income.
• You can receive up to three reductions on your loan principle in your lifetime, up to a maximum of $26,000, depending on your financial circumstances.

Revision of Terms:

• You may be able to make arrangements to pay only the interest portion of your loan payments or to extend the repayment period for up to 15 years.

Debt Reduction Grants:

• This is a new debt reduction program implemented by Newfoundland and Labrador. Up to the full amount of your provincial loan may be converted to a non-repayable grant. There is no application process, students will be contacted directly. Such a grant is earned on a semester-by-semester basis and students are notified annually. There are special provisions for students with special or extreme circumstances.