Repayment Workshop

Returning for Grad School or upgrading?

•Graduate students must be paying full-time fees to qualify for student loans or interest free status •Upgrading? • Unclassified students can receive student loan funding or interest free status for max. 52 weeks • OSAP students are not eligible for loans as unclassified • Must be registered in 60% of f/t course load •Apply for government student loans through home province

Not returning to full-time studies?

• Update your address with each of your lenders • Use a permanent address (e.g. parents) so that mail from your lenders gets to you promptly • Read what they send you! • Call them if you need clarification.

What happens when you’re in repayment?

• Repayment begins after a 6 month “grace period”; no payments are required but interest does accrue during this time.

• Term ends in April - 1 st payment due November 2013 • Ready or not, money will come out of your account- so be prepared and know your repayment terms!

Repayment

and Loan Integration

• For BC, integration of federal and provincial repayment began July 1, 2012 • The National Student Loan Service Centre (NSLSC) is the primary contact if you have integrated repayment • Students who are from provinces that don’t offer integration should continue to contact both provincial and federal lenders separately

How

much are monthly payments?

• Check the

Consolidation Agreement

you’ll receive in the mail from each of your lenders 5 months after graduation • Agreement outlines your loan repayment details • • • • • balance owing expected monthly payments start date of repayment length of repayment interest rate options

What about interest?

• • Prime is the reference interest rate used by banks Currently prime rate = 3%

What interest rate will you pay?

• • Fixed interest rate of prime rate at time of consolidation +5% (8%) or Floating interest rate of prime +2.5% (5.5%)

Can I make payments during my grace period?

YES!

• This is a smart way to pay down your loan principal and reduce the interest charged

How?

• Contact your lenders to arrange early payments and have a consolidation agreement sent to you

How long is the repayment period?

• For BC-Canada Integrated loans, amortization is 9.5 years.

• If you choose to revise these terms, the amortization period can be extended up to 14.5 yrs

Value of paying off loans quickly

• Decrease the overall amount of interest that you will pay • $20,000 loan at fixed rate paid back over 14.5 years will cost • $

35,207.70

($

202.34

/month) • Same loan paid back over 5 years will cost • $

25,304.84

($

421.75

/month)

What if you can’t repay your loans?

• Contact all of your lenders and discuss the situation • Do not ignore the situation – it will not go away!

• What about bankruptcy? Not a quick fix…

The waiting period before student loan debt can be discharged from bankruptcy is seven years. (Canlearn.ca)

Student Loan Default

• Failure to make regular monthly payments = defaulting on your loan(s) • This could result in:  Loss of future income tax refunds, GST credits • Outstanding balance on your loans will be taken each year from tax refund  Wage garnishments or property liens  Legal action  Loss of future student loan/grant assistance, and govt debt management programs

How does the government help you to repay your loans?

Repayment Assistance Plan (RAP)

Available to borrowers having difficulty making their Canada Student Loan payments. The amount borrowers are required to pay back is based on family income and family size.

To be eligible for the new Repayment Assistance Plan, borrowers must:  reside in Canada  have received their Consolidated Student Loan Agreement and  be unable to afford the monthly loan payment

More on RAP

• Borrowers must submit an application and reapply every six months in order to maintain eligibility • No borrower should have a repayment period of more than 15 years (or 10 years for borrowers with permanent disabilities) • Borrowers will not make payments exceeding 20 percent of their family income towards loans • More Info at: Canlearn.ca

• National Student Loans Service Centre (NSLSC) 1-888-815-4514

Revision of Terms

• Not eligible for Repayment assistance programs but still have difficulty making monthly payments? • Ask your lenders (federal and provincial) about revising your repayment terms and extending loan repayment period, lowering your monthly payment • No qualification process or formal application, you can phone your lenders to ask

Pacific Leaders Loan Forgiveness Program

• Promotes the BC Public Service as a potential employer to new post-secondary graduates, by forgiving their outstanding BC student loan debt at a rate of one third per year. • As of November 2007, all current or new employees must submit an application to enroll in the Pacific Leaders B.C. loan forgiveness program.

For info, call SABC at: 1-800-561-1818

BC Loan Forgiveness Program

Recent graduates in some specific professions can have their BC student loans forgiven by working at publicly funded facilities (and sometimes underserved areas) in BC.

The eligible professions are: • • • nursing, nurse practitioner medicine midwifery • • • • • • • • pharmacist speech language pathology pediatric occupational therapy and physiotherapy audiology teachers for the visually impaired teachers for the deaf and hard of hearing technology education teachers school psychologists

BC Loan Reduction Program

• Helps full time students who must borrow most of the money they need to pursue their post-secondary education. (Must successfully complete each year.) • There is no application. You will automatically be considered for loan reduction each year through information from your loan application.

• SABC sets the yearly loan reduction limit for all BC post-secondary students based on the number who are eligible and the budget for that program year. • Graduate students, students in professional programs (law, medicine or dentistry), and students in programs of less than two years are not eligible .

Online resources to help you plan

• • •

www.canlearn.ca

Repayment calculator Check balance, make payments Update address • • www.cra.gc.ca

Canada Revenue Agency Tax Credits and Deductions for students

Key Contacts

Enrolment Services

604-822-9836

National Student Loans Service Centre

1-888-815-4514