Student Loan Presentation

You Have Options!

Last week ABM College had a guest speaker present on Student Loans and repayment options. Violet Reid was our presenter and she is the Regional Representative of Student Lending in Alberta. She gave an informative presentation for morning and evening, thanks Violet! Here’s some information from that presentation.

Student Loan Repayments; How Informed Are you?

When does repayment begin?

You must begin to repay your Student Loan(s) when you graduate, leave school or cease to be a full-time student.

You are allowed a six-month non-repayment period before repayment begins where no payments are required; however, interest can accrue. You can either pay the interest during the non-repayment period, or you can ask to have it added to your student loan balance. If you do not notify the loan servicer how you are going to pay the non-repayment period interest, it will automatically be added to your loan balance at consolidation.

What is consolidation?

When you arrange to repay your Student loans, this is called consolidation.

During the six-month non-repayment period after you leave school, the loan servicer(s) will mail you a Consolidated Student Loan Agreement for your Canada Student Loan(s), Provincial Student Loan or integrated student loan. This agreement provides information about:

• the amount of your loan;
• your interest rate;
• your amortization period (how long it will take to repay your loan);
• the amount of each loan payment; and
• your first payment date

What am I responsible for?

You are responsible for:

• repaying your loan and all accrued and/or capitalized interest according to the terms of your Consolidated Student Loan Agreement; and
• notifying the loan servicer if you change your address, your name or your phone number, leave or transfer to another school, or change your graduation date.

Who do I repay?

Depending on when you received your loan, you will deal with one of the following loan servicers:

Student Aid Alberta Service Centre

• Alberta Student loans received on or after August 1, 2001

National Student Loans Service Centre

• Canada Student loans received on or after August 1, 2000

Financial Institution

• Alberta Student loans received before August 1, 2001
• Canada Student loans received before August 1, 2000

How do I repay?

The acceptable payment methods are:

• Pre-Authorized Payment Plan,
• Telephone Banking
• Internet Banking
• Cheques – Monthly and Post-dated
• Money Orders
• Bank Drafts

You must ensure that your payments are received at the loan servicer before the scheduled payment date. If you send the payment on the payment date, it could be received by the loan servicer a few days after the due date, causing collection activity.

What is the interest rate on my Student Loan(s)?

When you enter into repayment, you can choose between a fixed or floating interest rate. If you select a fixed rate, your interest rate will be locked in at prime plus 5 percent for the Canada portion and prime plus 2 percent for the Alberta portion for the duration of your repayment schedule and cannot go back to a floating rate. If you select a floating rate, you will pay prime plus 2.5 percent on the Canada portion and prime on the Alberta portion. You have the option to change to a fixed rate at any time.

Can I claim a tax credit for the interest I pay on my Student Loan?

Yes. A student loan tax credit allows you to deduct the interest that you pay on your student loans each year. This credit applies to interest payments you make on both your federal and provincial or territorial student loans, and the appropriate documents will be sent to you by mail for you to use when you file your taxes. It does not apply to interest payments you may make on any loans held with a private lender such as a student line of credit with a financial institution.

What if I have trouble repaying my loan?

If you have trouble finding employment or find it difficult to repay your Student Loan because of financial hardship, there is help. Programs such as Repayment Assistance Plan and Revision of Terms are available to either defer or reduce your required monthly payment. You may have to apply and qualify for these options. Contact your loan servicer for more information.

Can I make additional payments to reduce the amount of interest I pay?

In addition to your minimum monthly payments, you can make lump sum payments, or increase your monthly payment amount for your loan at any time during the life of your loans. These extra amounts will reduce your principal faster and therefore reduce the amount of interest you pay on your loan. You can also pay your loans in full at any time without penalty. Contact your loan servicer to obtain your current balance as it will change daily.

Can I get information on-line?

Yes, there are a number of resources you can take advantage of on the internet. A great resource is Canlearn.ca the government of Canada’s website or Student Aid website for Alberta student loans. They have a lot of information about how to manage your loan(s) as well as a links to view your personal information on-line. You will be able to:

• Check the status of your student loan
• Check the balance of your loan(s)
• Review details of new loans you’ve recently received
• Update your Mailing and Permanent Addresses and other contact information on-line
• Review your loan payment and transaction history
• Receive helpful information about your loan in your Personal Message Centre
• Customize your repayment amount ~ use your on-line account to increase or decrease your monthly payment amount
• Apply for Repayment Assistance Plan (RAP) ~ If you qualify for RAP, you will have reduced or no monthly payments for up to six months at a time.
• Access your T4A on-line ~ Tax slip is used by the students to declare the amount of grant funding that was received as income on their taxes.