Is it Time to Repay your Student Loan?

It is time to start repaying your loan if you have graduated from your studies, have transferred to part-time studies, or are taking a break from your studies that will last longer than 6 months. In all three cases, you must begin repaying your student loan six months after you stop attending school on a full-time basis.

Important Terms

Grace Period: The 6 month period immediately following the end of your full time studies. During this time, no interest will accrue on the Ontario portion of your student loan, nor will you be obligated to make payments.

Consolidation Date: The first day of the seventh month following the month you ceased to be a full time student. On this day, all of your outstanding loans are consolidated.

Consolidated Student Loan Agreement: A document mailed to you, 6-8 weeks before the end of your grace period, by the National Student Loan Service Centre which outlines;

  • Your total loan amount
  • Your interest rate
  • Your repayment term (how long it will take you to repay your loan)
  • Your monthly payment
  • Your first payment date

NOTE: your first payment will be due on the last day of the month marking your “Consolidation Date”.

A Note About Interest…

The provincial and federal portions of your loan will accumulate different amounts of interest during repayment.

  • Provincial loan interest rate is prime + 1%
  • Federal loan interest rate is prime + 2.5%

Your Repayment Responsibilities

  1. Sign a Consolidated Student Loan Agreement
  2. Repay your loan, and all interest, according to the terms of your Consolidated Student Loan Agreement
  3. Notify the National Student Loan Service Centre, or other lender, if you change your address, name or telephone number

Repayment Assistance

If you are having trouble repaying your government student loan(s), there is help. Both the Province of Ontario and the Government of Canada offer repayment assistance to help borrowers who are having difficulty repaying their loans. This assistance is provided through the Repayment Assistance Plan (RAP).

RAP is available for 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

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 – a reduced monthly payment based on your gross monthly family income and family size

To be considered for RAP, you must complete and submit an online application through the National Student Loans Service Centre’s online services, and have signed and returned your Consolidated Student Loan Agreement.

Changes as of November 1, 2016: $25,000 Yearly Income Threshold

As of November, 2016, the federal government implemented changes to government student loan repayment, ensuring no graduate with student loans will be required to make any repayment until they are earning an income of at least $25,000 per year.

This policy is implemented through RAP, with an increase in the loan repayment thresholds to ensure borrowers with gross incomes below $25,000 are assessed an affordable payment of zero. The thresholds for other family sizes are now increased by the same proportion for the family size of 1, as shown in the table below.

Family Size Revised Annual Income Threshold Family Size Revised Monthly Income Threshold
1 $25,000 1 $2,083
2 $39,052 2 $3,254
3 $50,457 3 $4,205
4 $59,512 4 $4,959
5+ $67,825 5+ $5,652

Don’t forget! To be considered for repayment assistance, you must complete and submit an application online.

NSLSC Repayment Webinars

The National Student Loan Service Centre now hosts “Repaying your Government Student Loans” webinars online! If you are receiving student loans from Ontario (OSAP) or from another province (except Quebec), your loans are being administered by the NSLSC.  Register for an educational webinar which will give you information regarding the repayment of your student loans including the repayment process, hints and tips on how to save on interest and what to do in the event that you are having difficulty making the payments.

To view the schedule and find out how to register, visit our NSLSC: Loan Repayment Webinars page.

NSLSC On-Line Services

An NSLSC on-line service account provides you with an excellent collection of tools to help you:

  • Check the status of your student loan
  • Check the balance of your loan(s)
  • Review details of new loans you’ve recently received
  • Update your Mailing and Permanent Addresses and other contact information on-line
  • Access your T4A tax slip in your Mailbox
  • Submit a request to confirm your enrolment
  • Review your loan payment and transaction history
  • Receive helpful information about your loan in your Personal Message Centre
  • Customize Your Repayment Schedule
  • Get Repayment Assistance

The Awards Office strongly encourages all student loan borrowers to create and use an NSLSC on-line service account, but especially encourages borrowers who have graduated or who soon will graduate to do so.

Want More Information?

CanLearn has got this covered. But OSAP has something to say too.