Understand Repayment Terms

You have six months from the day you stop taking classes full-time before you must start repaying your student loans, although you can make payments earlier if you want.

Whether you have finished your program, transferred to part-time studies, are taking time off or have withdrawn from school completely, you must contact the lender(s) who hold your student loans to arrange repayment within six months of leaving your studies.

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.

 

Type of B.C. student loan Issue dates Financial institution administering the loan
Direct lend On or after Aug. 1, 2000 B.C. Student Loan Service Bureau
Risk-sharing Aug. 1, 1995, to July 31, 2000 Bank
Guaranteed On or before July 31, 1995 Bank or credit union

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

Direct lend B.C. student loan repayment

First step: Sign a consolidation agreement

About 45 days before you enter repayment, the B.C. Student Loan Service Bureau will send you a consolidation agreement combining all your direct lend B.C. student loans 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.

Use the links below to find out answers to these questions:

Use these links to read about other repayment issues:

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 B.C. Student Loan Service Bureau 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 B.C. student loan 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 from floating at prime plus 2.5 per cent to fixed at prime plus five per cent.
  • 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 B.C. Student Loan Service Bureau. If you do not, payments will automatically be withdrawn directly from the bank account that you provided when you negotiated your master B.C. student loan agreement.

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 B.C. 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 direct lend loan, you can pay off the accumulated interest immediately or have it added (capitalized) to the principal amount owing.

Interest on direct lend loans is calculated at prime plus 2 ½ per cent during the grace period.

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 be charged?

Interest on a direct lend loan is charged at a floating rate of prime plus 2 ½ per cent.

Until Feb. 1, 2008, borrowers had a second option of a fixed interest rate – the prime rate at the time of loan consolidation plus five per cent.

The prime interest rate for Canada student loans is set by the Bank of Canada. For more information, contact the National Student Loans Service Centre.

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 B.C. Student Loan Service Bureau and shows your monthly payment on your direct lend B.C. student loan. The lowest a monthly payment can be is $25, including interest.

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

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

How do I use Internet and telephone banking for my B.C. student loan payments?

You can make extra payments on your direct lend B.C. student loan using Internet and telephone banking.

You can not replace your pre-authorized payments using these methods.

Payments made by Internet or telephone banking are automatically deducted from your bank account at the time of the payment. It takes about two to five business days for the payment to be applied to your B.C. student loan balance. The effective date will be the day you made the payment for accounting purposes.

Internet and telephone banking payments can be made at the following financial institutions:

  • Scotiabank
  • HSBC
  • TD Canada Trust
  • Bank of Montreal
  • CIBC
  • Royal Bank
  • British Columbia credit unions

How to set up Internet banking payments:

  1. Go to your financial institution's website and log on to the online banking homepage.
    • If you have never banked online, you will need to enrol first. Please follow the instructions provided by your financial institution.
    • If you are already enrolled for online banking, you will be prompted to enter your client bank card number and your password.
  2. Choose the "Pay Bills" section, then choose "Update/Create/Add Payee." Then from the list of payees, choose "Prov BC Student Loan Repayment."
  3. In the company account box, enter your British Columbia student loan account number. This is an eight-digit number starting with a zero. You must enter this number correctly. This is NOT the same as your social insurance number. If you don't know your B.C. student loan account number, please call 1-877-535-7680. Your account number can also be found on all correspondence from the B.C. Student Loan Service Bureau.

For more information about Internet and telephone banking, visit the B.C. Student Loan Service Bureau website or contact your financial institution.