How to Repay Your Loans

In the six-month period after your studies end, you must contact the lender and/or the National Student Loans Service Centre (NSLSC) to make arrangements to repay your loan. The terms and conditions of repayment will include the outstanding principal of your student loans, the interest rate(s), and your monthly payment amount. The process is called "consolidation." During the six-month period following the month in which your studies end, you are not required to make any loan payments. If you choose to do so, the payment will be applied against the principal. You are required to start making loan payments the first day of the seventh month following the month your studies ended. This is called your "consolidation date". As of your consolidation date, the amount of interest accrued in the six-month period after your studies ended is calculated and you can either pay the interest or add it to your loan principal (capitalized). If you choose to capitalize the interest, your lending institution or bank will adjust your monthly payment amount accordingly.

Assistance in Repaying Your Loans

Financial Counselling

When you finance your education with the help of federal and/or provincial student loans, it is important that once you have completed your studies, you assess the amount of your student loan debt, your living expenses, as well as your expected employment possibilities and salary ranges. Many educational, as well as financial institutions provide budget counselling services and/or offer courses in budgeting.

Revision of Terms

If you are unable to make payments on your Canada-Ontario Integrated Student Loan, you may ask the National Student Loans Service Centre to revise the repayment terms of your loan. A revision of terms can extend your repayment period for up to 15 years, thereby lowering your monthly payments.

Repayment Assistance Program(RAP)

The government has made it easier to repay your student loans. The Ontario portion of all OSAP loans is interest and payment-free for the first six months after the end of your studies. The new Repayment Assistance Plan ensures that no one will be asked to pay more than 20 percent of your family income towards the monthly payment on your loans.

The new Repayment Assistance Plan provides students with more help in repaying their Ontario student loans. The plan is a payment-relief program for qualified borrowers who are having difficulties making their monthly payment on their government student loans.

If you are already paying back your loan and are having difficulty, you may be eligible to apply for the Repayment Assistance Plan as well.

Under the plan, you would make affordable payments based on your family income and family size. The affordable payment increases gradually with your income and can't exceed a maximum of 20 percent. Borrowers with very low income are not required to make any payments until their income increases.

The plan also guarantees that if you keep your loan in good standing, your loan will be paid off over a maximum of 15 years and over a maximum of 10 years for borrowers with permanent disabilities.

To enrol in the program, you need to apply through the National Student Loans Service Centre. A single application will give you access to both the new Ontario Repayment Assistance Plan and the Federal Repayment Assistance Plan.

RAP has two stages; Interest Relief and Debt Reduction, to help eligible borrowers fully repay their student loans within 15 years (or 10 years for borrowers with permanent disabilities).

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.

You must apply for RAP. Each term of RAP eligibility (Interest Relief or Debt Reduction) is for 6 months.

Affordable Payment

The affordable payment is calculated based on your gross monthly family income and your family size.

Stage 1: Interest Relief

This stage of RAP is available for up to 60 months or until you are 10 years out of school, whichever comes first.

During Interest Relief, you make the affordable monthly payment. Your affordable payment will go first towards paying down your loan principal and, if large enough, the remainder will go towards paying monthly interest. The Governments of Canada and Ontario cover all monthly interest that is not covered by your payment.

Stage 2: Debt Reduction

This stage occurs after Stage 1, that is, after you have received RAP Stage 1 Interest Relief for a minimum of 60 months or you have been out of school for ten years, whichever comes first. All applicants for Debt Reduction must include proof of their reported family income (e.g., copies of pay stubs for the applicant, and spouse, if applicable).

If you have a Permanent Diability, you can apply to enter Stage 2 immediately upon entering repayment, without receiving any RAP stage 1 Interest Relief.

During RAP Stage 2, you will make either no payment or a monthly affordable payment, depending on your income and family size. Your affordable payment, if any, will go first towards paying down your loan principal and, if large enough, the remainder will go towards paying monthly interest. The Governments of Canada and Ontario cover all monthly interest and principal amounts not covered by your payment, so that your debt is eliminated within a maximum of 15 years from exiting school, or within a maximum of 10 years if you have a permanent disability.

You are responsible for repaying your loan and any grant, bursary, and/or scholarship overpayment. If you do not make your payments, you will be considered in default. Your debt (loan and/or overpayment) will be turned over to a collection agency and your default will be reported to a credit bureau; as a result, your ability to obtain credit may be affected. You will be restricted from receiving further financial assistance until the default has been cleared. It is important to note that, while you are in default, the interest will continue to accrue on the unpaid balance of your loan. A discharge from bankruptcy will not include your Canada Student Loan, Ontario Student Loan, Part-Time Canada Student Loan, and/or Canada-Ontario Integrated Student Loan unless the bankruptcy was filed at least 10 years after you ceased to be a full-time or part-time student.

You are considered in default and are restricted from receiving additional OSAP assistance if:

• You did not repay an Ontario and/or a Canada Student Loan or a Canada-Ontario Integrated Student Loan.
• You did not repay a Part-time Canada Student Loan.
• You did not repay an Ontario Student Opportunity Grant, Loan Forgiveness, or an Ontario Study Grant overpayment.
• You did not repay a Bursary for Students with Disabilities, a Child-Care Bursary, an Ontario Special Bursary, or a Bursary for Students with Disabilities Attending Out-of-Country Postsecondary Institutions overpayment.
• You did not repay a Student Venture Capital loan.

Obtaining Clearance of a Default

For information on the procedures you must follow to clear your default, contact the appropriate agency. Your financial aid office can also provide information regarding clearance procedures. The Ministry reviews all clearance requests to determine whether you are eligible for further OSAP assistance. Please note that repayment of the default and/or overpayment is normally required before you can receive further funding. 

Canada-Ontario Integrated Student Loans

Contact the National Student Loans Service Centre (NSLSC).

Canada Student Loans

Contact the private collection agency listed on your collection notice. You may wish to call 1 (888) 819-2516 or (819) 994-1218 (TDD/TY) to determine which collection agency holds your account.

Ontario Student Loans
Contact the private collection agency listed on your collection notice. You may wish to call (416) 326-0500 to determine which collection agency holds your account.