Repayment of Canada Student Loans

Posted on June 28, 2009
Filed Under Student Loan | Comments Off

Interest Relief

Interest relief is a program where the government pays the interest on your student loan if you experience difficulty in repaying your loan.
The agreed repayment term of your student loan will be extended by the length of the approved period for interest relief.
You are not required to make payments on your loan while you have been approved for Interest Relief.
You must complete an application to obtain Interest Relief.
You can be eligible to receive interest relief for up to 30 months, (2 ½ years) at any time throughout the repayment of your loan and an additional 24 months (Extended Interest Relief) if it’s within the first five years of your end of study date.
You will have to apply for interest relief every six months, if needed.

Revision of Terms

Revision of terms is an option to extend the repayment period of your loan.
A student loan is normally repaid within nine years, however, a revision of terms will extend the repayment period for up to 15 years. This will reduce you monthly payments by approximately 25% of your current payment.
To be eligible for this option you must have exhausted all your interest relief.
To apply you must contact the lender of your student loan and tell them you would like a Revision of Terms.

Extended Interest Relief

Extended Interest Relief is an option to go back to interest relief if you are still having trouble making your loan payments after the Revision of Terms option and the initial interest relief period.
To be eligible it must be less than five years since you finished school.
To apply contact the lender of your student loan and tell them you would like to apply for Extended Interest Relief.

Debt Reduction Repayment

Debt Reduction is a Government of Canada program where you can apply to have a portion of your Federal Student loan principal reduced.
To be eligible you must have exhausted all other debt management options, have been out of school for five years and your loan payments must exceed a given percentage of your income.
If you qualify you may be given a loan reduction of up to $10,000. As well, you may be eligible for two additional reductions of $5000 each if you are still unable to repay your loan after this initial reduction.

Early Childhood Education Grant

Early Childhood Education Grant is an initiative offered to Early Childhood Education students to help repay their student loan debt. Students graduating from this program generally have low wages and find it difficult to repay a large student loan.
To be eligible for this grant you must:
- have graduated from a two year Early Childhood Education program
- have borrowed for at least half your program duration
- have graduated within a timely manner as defined by Student Financial Services, Department of Education
- obtain full time employment of at least 30 hours per week in a licensed childcare centre or licensed family home for a period not less than 24 months with Newfoundland and Labrador immediately after graduation
There is no application form for this grant. Student Financial Services will create an eligibility list for students who meet the above criteria. The student must then confirm graduation and employment in order to be awarded the grant.

Debt Reduction Grant

Debt Reduction Grants is an initiative introduced by the Provincial Government to help reduce the student loan debt of graduating students. This program converts the provincial portion of your student loan into a non-repayable grant, pending you meet the qualifications.
To qualify you must have:
- Graduated from a program of at least 80 weeks in duration
- Borrowed more than $165 per week during a semester
- Been successful in at least 80% of a full course load in a semester, except where it is determined that you have extenuating circumstances
- Applied and borrowed money for at least half the required length of your program. For example, if your program was 90 weeks in duration, you must have borrowed student loans for at least 45 of those weeks.

Here is an example to show you the amount of debt reduction grant you may be eligible to receive if you meet the above qualifications:

Semester one is 17 weeks in duration:

CSL $165 x 17 weeks = $2805

NSL $110 x 17 weeks= $1870

Total borrowing amount $4675

The borrowing amount in excess of $165 per week is $1870. Therefore, you would receive $1870 in a Debt Reduction grant.

You do not have to complete an application to qualify for this program. You will be assessed by Student Financial Services, Government of Newfoundland and Labrador and notified of the qualifying amount.
You must send a letter to your campus business office to give us authorization to send your personal information to Student Financial Services to determine your eligibility for this grant.

For more info visit http://freeforloan.com