Federal and Provincial Government Student Loan Programs
There are important changes in the use of “interest free status” forms which will affect Co-op students with loans from the federal and provincial governments, beginning on August 1, 2011. Students will no longer be able to have interest free status while on a Co-op work term; they will only have it when they are attending classes as a full time student.
Students on a four month work term
Students are given a six month grace period that starts on the last day of full time classroom study before loan repayment is required. During this period, interest accrues, however, if the student returns to full time classroom study within those six months, any interest that has accrued on the loan can be reversed.
To initiate this, students must go to the Financial Aid and Awards office (422 University Centre) with photo ID when they are returning to full time classes (forms cannot be issued prior to school starting) in order to get a Confirmation of Enrolment form for interest free status.
Students on an eight (or more) month work term
If a student is on an eight month work term, they will have to begin repayment of their student loans; however, once the student begins taking full time classes again, they should visit Financial Aid & Awards office (422 University Centre) with photo ID and request a Confirmation of Enrolment form for interest free status. The form needs to be completed and sent to the government to stop further payments from being deducted.
For students who have to make payments, it is important to know that 1-2 months prior to repayment, the National Student Loans Service Centre (NSLSC) will mail a consolidation agreement (agreement to repay). The student will be given options for repayment and will have to sign and return a copy of the form to NSLSC as soon as possible.
Students will have the option to select a fixed or floating interest rate; fixed is higher but will never change, and floating is prime + 2.5%. Canlearn.ca is a great website for looking into specific federal loan repayment options.
Important information regarding this issue can be found on the Financial Aid and Awards website.
Further information can be obtained at the Financial Aid and Awards office (422 University Centre).