Anyone who is currently repaying their student loan will no longer be required to pay interest, effective August 1, 2009. It is important to remember that this initiative applies to the provincial portion of a student loan, not the federal portion. Note that the interest that is owing on student loans up to July 31, 2009 will still be outstanding and have to be paid by the student.
If a person is still paying on their loan, they will benefit from the elimination of interest. It is not retroactive to people who already have their loans paid in full.
The interest rate elimination is only on the provincial portion. A student would continue to make payments on their loans as they do today. Once all the interest owing prior to August 1, 2009 is paid, the payments on the provincial portion would all be applied to principal. The change will be automatic, with no requirement to make calls or complete forms. If a student wanted to reduce their payments, they can contact the financial institution which holds their loans after August 1, 2009 to discuss lower payment arrangements.
August 1, 2009.
Yes, on the provincial portion of a student's loan.
Anyone who is in repayment of their student loan will have the interest eliminated on the provincial portion of their loan. Their salary or any other source of income has no bearing on receiving this benefit.
For the average student, say a MUN student borrowing at the maximum, this will provide additional savings of about $1,800 over the life of their loan. Or if the student kept their payments as they are today, they could save almost 15 months of payments on the provincial portion of their loan.
This applies to anyone who has received a Newfoundland and Labrador student loan and who is currently in repayment. The elimination of interest applies regardless of where the person is currently living.
If a person has defaulted, they will still have the interest eliminated, unless there is a legal judgement in place. If that is the case, the interest under the legal judgement must apply.
This will be automatic as of August 1, 2009.
There will be no changes to repayment schedules. The existing payments will be applied to the existing loan - with the effect of repaying the provincial loan faster as the provincial portion of the payment will eventually all go to principal. Currenlty, students are able to change their repayment schedules under the Revision of Terms process and they will continue to have the ability to do so after August so they can reduce payments.
No, under the integration agreement with the Federal Government, payments are normally allocated 60% towards the federal loan and 40% towards the provincial loan. If you have no interest owing, as of August 1, 2009 your provincial payment will go fully towards your principal - paying off your provincial loan faster while your federal payment will continue to pay interest and principal. However, once your provincial loan is paid in full, your payments will go 100% towards your federal loan outstanding.
People can call the Student Loan Corporation at 1-877-520-8800 or 729-6465. They can also email slcnl@gov.nl.ca.
Students with general inquiries regarding student aid can call 1-888-657-0800, 729-5849. They can also email studentaid@gov.nl.ca.
Eligibility for the new grants will be assessed through the loan application process. Under the new change, a student will now receive up to $60 per week in the form of a provincial loan, with up to a further $80 per week as an up-front, non-repayable grant. These grants are generally issued six weeks into the semester and automatically deposited into student accounts for most MUN students. For students at College of the North Atlantic and private colleges, grants are forwarded to their schools for distribution.
Budget 2009 announced a reduction in the financial contribution from students' spouses that will result in married students having greater access to student financial assistance. The pre-study spousal contribution has decreased from 80% to 70% of discretionary income. This is automatically assessed through the loan application process.