Understand Repayment Terms

Repayment of your Canada-B.C. integrated student loans

For student loans received before August 1, 2000
Students who received a student loan before August 1, 2000, will have risk-shared and guaranteed loans. Contact the lending institution that holds these outstanding loans for information on repayment.

For student loans received after August 1, 2000
If you are applying for and receiving loans after August 1, 2011, your loans will become a joint federal-provincial student loan (Canada-British Columbia integrated student loan). If you do not receive any student loans after August 1, 2011, your loans will remain with their current service provider until further notice.
You will repay your student loans through the NSLSC.

• Sign a consolidation agreement.
• Approximately 45 days before you enter repayment, the NSLSC will send you a consolidation agreement combining any/all your loans you received after August 1, 2000 so you can make one payment.
• Make sure you understand the terms of the consolidation agreement and choose the repayment options that are best for you.

Common repayment terms

• What is loan consolidation?
• When does interest start accumulating?
• What is a grace period?
• What is capitalized interest?
• What is amortization?
• What interest rates will I be charged?
• What will my monthly payments be?

Use these links to read about other repayment issues:

• What if I miss payments on my Canada -B.C. integrated student loans?
• What if I declare bankruptcy?
• What if I am having problems making payments?

You must keep copies of all your student loan documents and letters until you’ve finished repaying.

What is loan consolidation?

Consolidation means your lender has given you a “repayment date.” It starts on the first day of the seventh month after you stopped attending full-time studies or withdrew from classes.

The National Student Loans Service Centre (NSLSC) will automatically send you:

• A pre-consolidation letter, 2 ½ months before the consolidation date.
• A consolidation agreement, 1 ½ months before the consolidation date.

Your consolidation agreement shows:

• The details of your current outstanding Canada-B.C. integrated student loans balance.
• Your monthly payment.
• When your monthly payment is due.
• How long you have to repay.
• The interest rate charged on your loan.
• The bank account from which payments will be withdrawn.

Your credit rating stays in good standing when you meet the terms of the consolidation agreement and repayment schedule by making your monthly payments on time.
The consolidation agreement lets you:

• Review your loan information.
• Change the bank account from which payments will be withdrawn each month.
• Increase the amount of your monthly payment.
• Change the interest rate.
• Change the day your monthly payment comes out of your account. If you do not arrange a different schedule, your payment will automatically come out on the last day of the month.

Please sign and return the consolidation agreement to the NSLSC. If you do not, payments will automatically be withdrawn directly from the bank account that you provided when you negotiated your master student financial assistance agreement.

When does interest start accumulating?

Interest begins accumulating on your loan as soon as your study period ends. You are not required to begin making payments until the first day of the seventh month; however, you can make payments anytime during your study period and your six-month non-repayment (grace) period.

It is your responsibility to make repayment arrangements with the NSLSC and/or your lending institution within six months of finishing your studies.

For B.C. student loans issued before August 1, 2000, the provincial government will continue to pay the interest for up to six months after your study period ends.

What is a grace period?

You have six months starting from your last day of full-time studies or date of withdrawal before you have to make payments on your Canada-B.C. integrated student loans. However, you are responsible for the interest that accumulates during those six months.

At the end of this grace period, your loans are consolidated and you must start to repay them.

Once you start repaying your loan, you can pay off the accumulated interest immediately or have it added (capitalized) to the principal amount owing.

What is capitalized interest?

Adding the accumulated interest to the principal of the loan is called capitalization.
You are responsible for the interest that accumulates during the six-month grace period.

When you start repaying your loan, you can either pay the accumulated interest immediately, or it will be capitalized and added to the principal of your loan.

What is amortization?

Amortization or the repayment period is the length of time you arrange with your lender to fully repay a loan.

The normal amortization period to repay a direct lend B.C. student loan is 174 months or 14.5 years.

Your lender can extend your amortization period, but you must negotiate this with them. The maximum amortization period allowed for all types of B.C. student loans is 234 months or 19.5 years.

What interest rates will I pay?

The interest rate for student loans is either a floating interest rate (the prime rate plus 2.5 percent) or a fixed rate (the prime rate plus 5 percent).

What will my monthly payments be?

Your monthly student loan payment is based on the total amount you owe on your loan, the interest rate at the time of consolidation and the number of months in your repayment period.

Your consolidation agreement is sent by the NSLSC and shows your monthly payment on your student loan.

Contact your lender to find out your monthly payment amounts for guaranteed and risk-sharing student loans.

Contact your lender with any questions about how your monthly payment amount is calculated.

Canada and B.C. student loans are repaid separately

Canada student loans are repaid to the federal government.

B.C. student loans are repaid to the Province of British Columbia.

You make separate arrangements to repay your federal and provincial student loans even though you applied for them with one application.

Contact the bank, credit union or other financial service provider where you cashed your student loans. These lenders administer and collect the loan on behalf of the federal and provincial governments.

Repaying Canada student loans

To find out more information about repaying your Canada student loans, visit the National Student Loans Services Centre website.

The remainder of this section deals with B.C. student loans only.

Repaying your B.C. student loans

There are three types of B.C. student loans: direct lend, risk-sharing and guaranteed. You must make a separate payment for each type of loan you have.

Students who received a B.C student loan after August 2000 have direct lend B.C. student loans. Risk-sharing and guaranteed loans are no longer issued, but they must still be repaid if you have them.

You are responsible for contacting all your lenders to update your address if you move.

Contact your lender directly to find out how to pay your guaranteed and risk-sharing loans.