Government Sponsored Student Loans Repayment Seminar

1
Government Sponsored Student Loans Repayment
Seminar
2
The Loan Lifecycle
3
Grace Period

• The Grace Period 6 month period between End
  of Studies and Consolidation (Beginning of
  Repayment)
• Example. End of Studies April 30th gt
  Consolidation November 1st
• Interest starts to accrue at the start of the
  Grace Period
• Payments are not required. Borrowers can choose
  to make voluntary payments on interest and
  principal.
• NB No interest is charged if borrower is
  returning to school full-time and notifies the
  NSLSC within six months of their End of Studies.

4
Grace Period (Continued)

• Consolidation Agreements mailed 1 month before
  the end of Grace outlining
• Repayment obligations, i.e.,
• Term of repayment (standard 9.5 years, but can be
  up to 14.5 years)
• Monthly payment amount
• First payment due date
• Available Debt Management Programs (IR, RoT, DRR)
  
• Interest rate options
• CSLP portion Floating (Prime 2.5) or Fixed
  (Prime 5)
• Ontario Portion Floating (prime 1)
• Borrowers should sign and return their
  Consolidation Agreement
• Some borrowers receive calls from the NSLSC to
  help them understand the information in their
  Consolidation Agreement

5
Repayment (Continued)

• Borrowers can repay their loan before the end of
  their repayment term without penalty by
• Paying an amount larger than the minimum monthly
  payment calculated for their term
• Making weekly or bi-weekly payments
• Making lump sum payments

6
Debt Management (Help With Repayment)

• Borrowers having difficulty making monthly
  payments can contact the NSLSC to get help
• Help is available through government debt
  management programs administered by the NSLSC -
• Interest Relief / Repayment Assistance Plan
• Revision of Terms
• Debt Reduction in Repayment
• NB Borrowers are required to contact all of
  their loan servicers

7
Interest Relief (IR)

• IR recipients are not required to make loan
  payments while on Interest Relief.
• Borrowers apply to the NSLSC for 6-month Interest
  Relief periods and can receive up to a total of
  54 months (9 periods) of Interest Relief.
• Borrowers must apply for each period separately.
• Canada / Ontario pay interest costs while
  borrower are on Interest Relief.
• Interest Relief applications are available by
  calling the NSLSC or through NSLSC section of
  Canlearn.ca

8
Repayment Assistance Plan (RAP)

• New program effective Fall 2009
• Optional program to replace Interest Relief and
  Debt Reduction in Repayment
• No borrower will be required to make payments
  above an affordable level
• No payment will be required for those with very
  low incomes
• Repayment period can not exceed 15 years or 10
  years for permanent disability
• Apply through the loan servicer every 6 months

9
Revision of Terms (RoT)

• Allows borrowers to lower their monthly payment
  temporarily or for the remaining term of the
  loan.
• Options
• Lower payment temporarily by making interest-only
  payments (6-month terms).
• Lower payments for term of loan by extending the
  term up to the maximum 174 months (14.5 years)
  NB Term can be adjusted more than once.
• How RoT differs from IR
• All borrowers are eligible for RoT regardless of
  debt and income level.
• Payments are required each month either
  interest-only payments or reduced payments.

10
Ontario Debt Reduction

• Ontario Student Opportunity Grant
• eligibility determined by government
• No application is required
• minimum course length is two-term program based
  on 21 - 40 weeks in length per year
• ministry will send payment directly to your loan
  servicer

11
Debt Reduction in Repayment (DRR)

• Provides borrowers up to 34,700 in debt
  reduction
• Federal DRR - three reductions up to 10,000,
  10,000 and 6,000 respectively
• Ontario DRR - three reductions up to 4,300,
  2,200 and 2,200 respectively
• Borrower must use all available IR (min 30 months
  or 5 periods) and must be at least 5 years out of
  school.
• Approval and entitlement based on comparison of
  family income/size to monthly payment level
  similar to IR.

12
Online Services

• Through NSLSC section of CanLearn.ca borrowers
  can do the following
• Check the status and balance of their loan(s)
• Update your Mailing and Permanent Addresses and
  other contact information on-line
• Review loan payment and transaction history
• Interactive IR, RoT, DRR applications will be
  available online
• Application will
• Confirm borrower eligibility (e.g., do
  debt-to-income test for IR/DRR applications)
• Pre-populate PDF application with borrower
  information
• Borrower can then print and post application

13
Tips from your Loan Servicer

• Sign and return the Consolidation Agreement
• Maintain contact with your loan servicer
• Always keep address up to date
• Remember you will have a tax credit in repayment
• Contact your loan servicer with any questions
  about your file or to change any information

14
Contacts

• For additional information
• www.Canlearn.ca
• http//osap.gov.on.ca
• National Student Loans Service Centre 1 888 815
  4514
• CIBC National Student Centre 1 800 563 2422
• Royal Bank Student Centre 1 800 363-3822
• Bank of Nova Scotia 1 888
  284-3044