Interest Relief

What is Interest Relief?

Interest Relief is designed to help you meet your repayment obligations if you are temporarily unable to make payments on your government student loans because of unemployment or low income.

How does Interest Relief work?

Interest Relief is granted for periods of six months, up to a maximum of 30 months.  Some exceptions may apply. You may also be eligible for a further 24 months of Extended Interest Relief.

During periods of Interest Relief:

• You are not required to make payments on either the monthly interest or the outstanding principal of your loan.
• The Government of Canada and/or the Government of your province or territory will pay the interest on your loans for you.
• Any voluntary payments (full or partial) you choose to make during periods of Interest Relief will go directly toward reducing your outstanding principal. These payments are not mandatory, and they will not affect your current or future eligibility for Interest Relief.

Extended Interest Relief

If you are still unable to make your payments and it has not been 5 years since you left school, you may be eligible for Extended Interest Relief

Am I eligible for Interest Relief?

To be eligible for Interest Relief, all of the following conditions must be met:

• Your monthly gross family income (before deductions) must fall within the maximum income guidelines.
• You must reside in Canada. Note: For the purposes of Interest Relief, if you are participating in an international internship program or if you are a member of the Canadian Armed Forces who is stationed abroad, you are considered to be residing in Canada.
  
• Your loan must not be in default (that is, not in collection with the Canada Revenue Agency or another collection agency). Note: If you filed for bankruptcy on or after May 11, 2004, you may still qualify for Interest Relief even if your loan is in default.
• You must have signed a Consolidation Agreement for your Canada Student Loans. If you have not signed a Consolidation Agreement, contact the National Student Loans Service Centre and/or your financial institution, to request one.
• You must meet all eligibility criteria in the month your application is dated.

Can I apply if I’ve missed scheduled loan payments?

You may still be eligible for Interest Relief even if you have missed regularly scheduled loan payments, but first, you will need to deal with any outstanding interest payments. You can do this in one of three ways:

• Pay the outstanding interest.
• Your Interest Relief period may begin up to six months before the month you apply, as long as you qualify.
• Request up to three months of the unpaid interest be capitalized (in other words converted to principal). (Unlike the other options, which can be used whenever applying for Interest Relief, you can only use the capitalization option once.)

How do I apply?

To apply for Interest Relief, you must complete an Interest Relief application form and attach copies of any supporting documentation. Send only photocopies of income and payment documentation with your application, because originals cannot be returned.

• If you have a Canada Student Loan through the National Student Loans Service Centre (NSLSC), then you should send your application to the NSLSC. And, if you have a Canada Student Loan with a financial institution, your application will also apply to that loan. The NSLSC will contact your financial institution to obtain information concerning your loan.
• If you do not have a Canada Student Loan through the National Student Loans Service Centre, and you are applying for Interest Relief for a Canada Student Loan held by a financial institution that was negotiated before August 1, 2000, your must submit your application and supporting documentation to your financial institution.
• If you have a provincial/territorial student loan, you must contact that province/territory to inquire about repayment assistance.

You must submit a separate application for each 6-month period of Interest Relief. You may apply for a subsequent period of Interest Relief the day after your current period ends.

If your student loan is from Ontario, Saskatchewan, Newfoundland and Labrador, or New Brunswick, please visit the ‘Repay Your Student Loan’ section under the ‘Pay’ section of the www.canlearn.ca Web site to view how to apply for Interest Relief in your province.