So you’re wrapping up the term, working fervently on term papers and studying for exams. You take a break and check your mail to see that the National Student Loans Service Centre (NSLSC) has sent you a letter advising you that your study period ends on April 26. Also in the letter, the NSLSC wants you to know that after April 26, interest will begin accruing on the federal portion of your student loan and after six months, you will need to start paying it all back.
“But I’ve only finished my first year, I’ve got three more to go”, you think to yourself. “Aren’t government student loans supposed to be interest- and payment-free as long as I’m a full-time student?”
Don’t Panic! Here’s why the NSLSC sends you this letter.
The NSLSC only knows your last confirmed study period through OSAP
When you sign your Master Student Financial Assistance Agreement (MSFAA) to receive OSAP funding, you enter into a loan agreement with Ontario and Canada, where the disbursement and repayment of your funding are administered by the NSLSC.
When your enrolment is confirmed for the release of your funding, OSAP provides the NSLSC with your full-time study period start and end dates. This ensures the NSLSC can properly carry out the terms of your loan agreement, keeping your loans interest-free while you are studying full-time, and initiating repayment when you cease to be a full-time student.
There’s no way to know if you’re coming back to school full-time
While it might seem obvious to you that you’ll be a full-time student for a few years, the NSLSC can’t know for certain that you’ll return next year. Therefore, they have to initiate the repayment process at the end of your OSAP confirmed study period.
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