Repayment Assistance Plan (RAP)
Purpose
Both the Province of Ontario and the Government of Canada offer repayment assistance that helps borrowers who are having difficulty repaying their loans.
The Repayment Assistance Plan (RAP) is available for all of the following loans:
- Canada-Ontario Integrated Student Loans
- Canada Student Loans issued before August 1, 2000
- Ontario Student Loans issued before August 1, 2001
- Part-Time Canada Student Loans
RAP has two stages: Interest Relief and Debt Reduction, to help eligible borrowers fully repay their student loans within 15 years (or 10 years for borrowers with permanent disabilities).
During periods of repayment assistance you will either:
- be exempt from making monthly loan payments during the eligibility period, or
- make your Affordable Monthly Payment.
You must apply for RAP.
Each term of RAP approval (Interest Relief or Debt Reduction) is for 6 months and you can re-apply.
Who Can Get This Aid
To be eligible for RAP, you must:
- Be a resident of Canada;
- Have student loans that are in good standing (i.e., not in default) and not be restricted from repayment assistance for other reasons.
- Have an affordable monthly payment that is less than the required monthly payment:
- Your affordable monthly payment is calculated based on your gross family income (including your spouse’s income, if applicable) and family size;
- Your required monthly payment is calculated based on the total amount of your government student loans.
If your affordable payment is less than the required payment, and you meet all the other eligibility requirements for RAP, you will make only the affordable payment for six months.
Note: Your reported family income is subject to income verification. You (and your spouse, if applicable) may be required to provide supporting documentation.
Affordable Payment
The affordable payment is calculated based on your gross monthly family income and your family size. Your affordable monthly payment for the 6-month RAP term would be zero if your gross monthly family income, before taxes and other deductions, is equal to or less than the amount listed in the table below for your family size.
Gross Monthly Family Income Threshold for Zero Affordable Payment
Number of Family Members |
Gross Monthly Family Income |
|---|---|
1 |
$2,083 |
2 |
$3,254 |
3 |
$4,205 |
4 |
$4,959 |
5 or more |
$5,652 |
Above the income threshold for zero payments (as shown in the table above), the monthly affordable payment gradually increases with family income but will never exceed a maximum of 20 per cent of family income.
Note: If your spouse also has government student loans in repayment, your Monthly Affordable Payment will be adjusted by your share of the government student loans held by both of you. For example, if the Monthly Affordable Payment based on your family income is $150, and you have two-thirds of the government student loans in repayment, your Monthly Affordable Payment will be $100 (2/3 of $150).
Amount of Aid – RAP Stages
Stage 1: Interest Relief
This stage of RAP is available for up to 60 months or until you are 10 years out of school, whichever comes first.
During Interest Relief, you make the affordable monthly payment. Your affordable payment will go first towards paying down your loan principal and, if large enough, the remainder will go towards paying monthly interest. The Governments of Canada and Ontario cover all monthly interest that is not covered by your payment.
Example:
Jean’s required monthly payment on a Canada-Ontario Integrated Student Loan is $300. Of this amount, $100 is interest and $200 is principal. Jean’s affordable payment is $50. Therefore, Jean qualifies for RAP. Jean’s monthly payment would pay down the loan principal by $50. The governments of Canada and Ontario would pay a total of $100 toward the monthly interest amount.
Note: During Stage 1 Interest Relief, the National Student Loans Service Centre (NSLSC) will randomly sample applicants for proof of reported family income (e.g., copies of pay stubs). Those who fail income verification will have any RAP benefits awarded for that application reversed and will automatically be required to provide proof income if/when they reapply for RAP.
Stage 2: Debt Reduction
This stage occurs after Stage 1, that is, after you have received RAP Stage 1 Interest Relief for a minimum of 60 months or you have been out of school for ten years, whichever comes first. All applicants for Debt Reduction must include proof of their reported family income (e.g., copies of pay stubs for the applicant, and spouse, if applicable).
If you have a Permanent Disability, you can apply to enter Stage 2 immediately upon entering repayment, without receiving any RAP stage 1 Interest Relief.
During the 6-month term of RAP Stage 2 approval, you will make either no payment or a monthly affordable payment, depending on your income and family size. Your affordable payment, if any, will go first towards paying down your loan principal and, if large enough, the remainder will go towards paying monthly interest. The Governments of Canada and Ontario cover all monthly interest and principal amounts not covered by your payment, so that your debt is eliminated within a maximum of 15 years from exiting school, or within a maximum of 10 years if you have a permanent disability.
Example:
Ben’s required monthly payment on a Canada-Ontario Integrated Student Loan is $400. Of this amount $150 is interest and $250 is principal. Ben’s affordable payment is $0.00. Therefore, for this term of Stage 2 approval, the governments of Canada and Ontario would pay a total of $250 per month toward the principal amount of the loan and $150 toward the monthly interest. Ben could re-apply for RAP Stage 2 after the term.
Repayment Assistance Plan for Borrowers with a Permanent Disability (RAP-PD)
Borrowers with a permanent disability may apply for RAP Stage 2 (Debt Reduction) immediately upon entering repayment without using RAP Stage 1. Through RAP Stage 2, borrowers with permanent disabilities are helped to pay off their loans in 10 years. For simplicity, the provisions for borrowers with permanent disabilities under RAP are called “RAP-PD.”
For borrowers with permanent disabilities, the calculation of the affordable payment is based on family income, family size, and disability-related expenses (allowable uninsured medical expenses, special care and other expenses directly related to the disability).
If you wish to be considered for RAP-PD, you must complete a RAP application (see section below, “How to Apply.”) On the RAP application, you must indicate that you have a permanent disability. If you were confirmed to have a permanent disability for the purposes of an OSAP application while you were a postsecondary student, no further documentation should be required. If your permanent disability was not confirmed for the purposes of an OSAP application while you were in postsecondary studies, you will be required to complete a RAP-PD Verification of Permanent Disability form. In addition, you will be required to provide medical documentation to support your permanent disability. To request a RAP-PD Verification of Permanent Disability form, contact the NSLSC.
If you have disability-related expenses and wish to have them taken into consideration on your RAP application, you must complete a RAP-PD Expenses form, and provide proof of your expenses and insurance coverage. To request a RAP-PD Expenses form, contact the NSLSC. Along with your RAP application, you will be required to provide proof of your reported family income (e.g., copies of pay stubs).
How to Apply
Typically, borrowers will submit a single application for repayment assistance to the NSLSC. However, there are separate application processes for borrowers who were issued only Ontario Student Loans prior to August 1, 2001 and/or Canada Student Loans prior to August 1, 2000.
For information on how to apply for repayment assistance for the different types of student loans that you have, check out the chart below.
Type of Loan |
How to Apply |
|---|---|
If you have a Canada-Ontario Integrated Student Loan (COISL) and/or Part-time Canada Student Loan: |
A single application, which is submitted to the NSLSC Request an application from the NSLSC or download the application form from the Canada Student Financial Assistance website. |
If you have a COISL and one or both of the older loans listed below: • Canada Student Loan issued before August 1, 2000 • Ontario Student Loan issued before August 1, 2001 |
A single application, which is submitted to the NSLSC Request an application from the NSLSC or download the application form from the Canada Student Financial Assistance website. |
If you have only one or both of the following older loans: • Canada Student Loan issued before August 1, 2000 • Ontario Student Loan issued before August 1, 2001 |
Contact your lender holding this loan for information on how to apply. |
Each term of RAP eligibility (Interest Relief or Debt Reduction) is for 6 months. If you wish to receive additional terms of RAP, you must reapply for RAP at the end of each 6-month term.
How to Check the Status of Your Application
Information about the processing of your application for repayment assistance is available from the agency to which you applied, either the NSLSC or previous lender.