Repaying

Help with Repaying - Interest Relief

Interest relief

If you are having difficulty repaying your student loans you may be eligible for interest relief. Eligibility is based on your gross family income (before deductions), government student loan debt, and family size.

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, Or
• are eligible for reduced loan payments

In both cases government will make monthly payments towards the interest on your student loans.

Interest relief is granted for periods of six months, and up to 54 months on the Ontario portion of your Canada-Ontario Integrated Student Loan (full-time student loan) and for up to 60 months on the Canada portion of your full-time student loan and/or Part-time Canada Student Loan. At the end of each 6 month term, you must reapply to be eligible for additional terms.

On the repayment assistance application you must report: your gross income (before deductions) and that of your spouse/partner if married or living common law; government student loan debt; and your family size. You must also provide required proof of your income and that of your spouse/partner if married or living common law.

The interest relief stage of the Repayment Assistance Plan (RAP) for the Canada portion of your full-time student loans and/or for your Part-Time Canada Student Loan is similar to interest relief for the Ontario portion but differs in some respects. The interest relief stage of the Repayment Assistance Plan (RAP) for Canada Student Loans extends to higher income levels and lower debt levels. If you do not qualify for interest relief on the Ontario portion of your student loans, you may still qualify for interest relief on your Canada Student Loans.

Another distinction is that anyone who qualifies for interest relief on the Ontario portion will have no payment due towards the Ontario portion. Borrowers who qualify for interest relief on the Canada portion of their full-time student loans and/or on their Part-Time Canada Student Loan will either have no payment due towards their Canada Student Loans or qualify for a reduced payment during the term. If you qualify for a reduced loan payment, you must make the payments in order to be approved for further interest relief. Failure to make loan payments results in default which could affect your credit rating, future income tax refunds, and ability to qualify for future student assistance.

Any payment you make above what is required during interest relief will be applied directly towards reducing your loan principal. To be eligible for additional terms of Interest Relief you must reapply.

You must meet all eligibility criteria in order to be granted interest relief and provide any required proof of income. If approved, you will receive interest relief for the 6 months which includes the month of application. If you missed recent loan payments and had qualifying income during those months, you may be approved retroactively for up to six months of interest relief prior to your application.

Eligibility Requirements

The following is a list of eligibility requirements:

You must have consolidated your loan(s) and signed a Consolidation Agreement for your OSAP loans. If you have not signed a Consolidation Agreement, contact the NSLSC.

You must reside in Canada. An individual who is participating in an international internship program or is a member of the Canadian Armed Forces who is stationed abroad is considered to be residing in Canada.

You must pay or capitalize (there is a one-time option for borrowers to capitalize up to a maximum of three months) any unpaid interest as of the start of the period for which you are eligible for interest relief in order to receive interest relief.

Your eligibility for interest relief will be assessed based on your gross family income including your spouse’s/partner’s income if married/common law, family size, and government student loans. You can view more information about interest relief for your Canada Student Loans by visiting the Canlearn website www.canlearn.ca.

Your eligibility for interest relief must not have been previously revoked or terminated.

Your student loans must not be in default.

You may be ineligible for interest relief if you are currently restricted from eligibility for student loans from the Government of Canada and/or the province from which your student loans were issued.

If you do not qualify for Interest Relief on your student loans, you may lower your monthly payments by lengthening the loan repayment period through Revision of Terms.

How to Apply for Interest Relief

In order to be considered for interest relief and debt reduction on your Canada-Ontario Integrated Student Loan and/or your Part-time Canada Student Loan, you only have to fill out one repayment assistance application. This application is available from the National Student Loan Service Centre (NSLSC). For more information, please contact the NSLSC at one of the following numbers.

Toll Free: 1 888 815-4514 (within North America)

1 800 2 225-2501 (outside North America)

TTY: 1 888 815-4556

NOTE: If, in addition to a Canada-Ontario Integrated Student Loan, you also hold Canada Student Loans negotiated prior to August 1, 2000 and/or Ontario Student Loans negotiated prior to August 1, 2001, these loans will be included in your single application to the NSLSC.

If you do not hold a Canada-Ontario Integrated Student Loan and hold only a Canada Student Loan issued prior to August 1, 2000 and/or an Ontario Student Loan negotiated prior to August 1, 2001, (and), you must apply for repayment assistance through the financial institution that issued your student loans.