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 so as to update them on your status as a student. It is your resposniblity as a borrower to keep your student loans in good standing.
• You are not required to make payments on your NWT student loan if you are considered full-time by NWTSFA.
• You must submit to NWTSFA a Form D - Student Enrollment Form filled out by the Student Access Centre on the 1st floor of the Administration Building whether you are receiving NWT assistance or not to maintain interest-free status.
• If you are returning to full-time studies and not taking out another Canada student loan, you must notify National Student Loan Service Centre that you are currently in full-time studies.
• A Schedule 2 for Canadian loans can be obtained and filled out by the Student Access Centre.
• This form can only be filled out for students who are currently in full-time classes.
• The completed form must be mailed or faxed to NSLSC.
• Call the lender(s) after two weeks to ensure that they have received confirmation of your enrollment.
• Failure to notify your lender(s) of your full-time status can result in your loans entering repayment.

Loan Repayment

• Whether you have graduated or not, you will have a 6-month grace period after your end of study date, in which to find work and make arrangements with your lending institutions, before you are required to make your first payment toward your loan.
• During this 6-month period your Northwest Territories student loan does not accrue interest. The first day of the seventh month, interest begins to accrue at 1% below the Bank of Canada prime rate on January 1st of that year.
• If you have any Canada Student Loans, interest will accrue immediately following the conclusion of your studies at prime + 2.0%.
• As soon as you finish school, you should contact NWTSFA 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. 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.

Loan Remission:

• If you received a NWT Remissible Loan, it may be forgiven if you:
• Cease full-time studies for a period of 6-months or longer;
• Provide official transcripts showing that you have successfully completed the required percentage of a 100% full course load in each semester;
• Live in the NWT for at least three continuous months, and continue to reside in the NWT; and
• Complete all required paperwork, including statutory declaration forms.
• Students who received Remissible Loans and did not successfully complete the required percentage of a full course load may receive one semester of remission under the grace period.
• This grace period is valid for only one semester during your lifetime. You would be required to repay all other semesters not successfully completed.

Interest Relief or Reduced Loan Payments:

• You may be eligible for interest relief or reduced loan payments if you are temporarily unable to repay your student loan because of low income.
• Applications are available at the NWTSFA website with additional details on the programs.
• Interest Relief:
• Your monthly loan obligations, principle and interest, may be deferred if monthly payments exceed a given percentage of gross family income.
• Granted for 3-month periods up to a maximum of 36 months.
• To be eligible for interest relief, you must reside in the NWT during the period of interest relief.
• Reduced Loan Payment:
• Your monthly loan obligations could be reduced if monthly payments exceed a given percentage of gross family income.
• Reduced Loan Payment Program is granted for 3-month periods up to a maximum of 36 months.

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.