DIRECT FINANCING
What will this transition mean for student?
What will happen to students who are currently in-study and have loans?
What is a Service Bureau?
Will the government sign agreements with Service Bureaus from the USA?
How will the Canada Student Loans be disbursed for the 2000/2001 school year?
How long will the interim contract with the bank be?
What are the terms of the interim agreement with the banks?
I already have a CSL. Will these changes mean that I will end up having more than one loan when I graduate?
When I start repaying my loan, do I still go to the financial intitution? Whom do I pay?
Who do I contact when I have to start repaying my CSL?
How will I know how much I owe for my Loans?
Will I have to do something different this year whenI apply or pick-up my Loan?
Will I have to start repaying my CSL now?
Do I have to confirm my enrollement?
Will the changes affect my Canada Study Grant?
I have a loan but I am already repaying it - will this affect me?
I was on/am on Iterest Relief - will I still get it? Will I have to re-apply to my bank?
Do I still make payments on my loan to my financial institution if they are not involved anymore?
DIRECT FINANCING
As of August 1, 2000, the existing agreement between the Government of Canada and the financial institution will end. As such, the Government of Canada will introduce the new "Direct Financing " arrangement.
Students can visit our web site at:
http://www.hrdc-drhc.gc.ca/student_loans/admin/admin.shtml
What will this transition mean for students?
Every effort will be taken to ensure that the transition from the current arrangements to alternate arrangements is as seamless as possible for students.
Students who have already consolidated their loans and are into repayment will not be affected at all. These students should continue to repay their loans to their financial institution in accordance with their individual arrangements with the financial institution.
What will happen to students who are currently in-study and have loans?
Every effort will be taken to ensure that the transition from the current arrangements to alternate arrangements is as seamless as possible for students.
What is a service bureau?
Service Bureaus, which are already used by financial institutions, are private collection companies who sign agreements to provide a service. In the present case, Service Bureaus would sign an agreement with the government to establish loan accounts, maintain contacts with the borrowers and administer the loan once the loan is in repayment.
Will the government sign agreements with Service Bureaus from the USA?
The proposed amendments to the Canada Student Financial Assistance Act clearly states that "The Minister may enter into an agreement with any corporation incorporated under the laws of Canada or a province and carrying on business in Canada". (art. 17, 6.2(1))
As long as a company is incorporated in Canada, has an office in Canada and carries business in Canada with Canadian employees, it can sign an agreement with the Government of Canada to become a Service Provider with the Canada Student Loans Program.
How will the Canada Student Loans be disbursed for the 2000/2001 school year?
The Government of Canada's number one priority regarding this matter is to ensure uninterrupted access to Canada Student Loans Program.
The government of Canada has negotiated an interim arrangement with a number of financial institutions to process loan documents and transfer funds to students.
How long will the interim contract with the bank be?
To ensure uninterrupted delivery of the Canada Student Loans Program the Government of Canada will issue a contract to be signed by interested financial institutions
effective August 1, 2000, for a duration of seven months. The Government of Canada has the option of extending this agreement to a total of 12 months.
What are the terms of the interim agreement with the banks?
Full details and terms of the agreement will be available before July 31, 2000.
I already have a Canada Student Loan. Will these changes mean that I will end up having more than one loan when I graduate?
Yes. If you receive a Canada Student Loan on or after August 1, 2000, it will have to be repaid to the Government of Canada. Your previous Canada Student Loans will remain with your financial institution.
When I start repaying my loan, do I still go to the financial institution? Whom do I pay?
For all the Canada Student Loans you received before August 1, 2000, you will continue to repay your financial institution. If you negotiate a Canada Student Loan on or after
August 1, 2000, you will have to repay the Government of Canada. In both cases, you will have to begin repayment six months after you have completed your full-time studies. If you are experiencing financial difficulties, you will be able to apply for
Interest Relief for both loans.
There may be different arrangements regarding how you repay your provincial student loans. Please contact your provincial student assistance office for further details.
Who do I contact when I have to start repaying my Canada Student Loans?
It is your responsibility to contact your financial institution within 6 months after you have completed your studies to establish your repayment schedule for any Canada Student Loans received before August 1, 2000. For loans cashed on or after
August 1, 2000, you will have to contact the Canada Student Loans Program within six months.
How will I know how much I owe for my loans?
It is anticipated that you will receive two consolidation agreements: one for any loan you received before August 1, 2000 and one for any loan you received on or
after August 1, 2000. These consolidation agreements will set out the amount you owe to the financial institution and the amount you owe to the Government of Canada, as well as the repayment schedules for each loan.
Will I have to do something different this year when I apply or pick-up my loan?
There will be no changes affecting how you apply for a Canada Student Loan. Applications are available from your educational institution or by contacting your provincial or territorial student assistance office. They will tell you where you should submit your application once it is completed.
If you qualify for a Canada Student Loan, you will receive a certificate of eligibility. You must have this form signed by an authorized officer at the school you are attending. You will then be able to use that certificate to obtain your loan money. Note that for some students, enrolment is confirmed electronically at the time the loan document is printed. For other students, this form must be signed. You should contact the financial aid officer
at your school for more details.
In the upcoming weeks an announcement will be made about where you will need to go to cash your loan once you have your Certificate of Eligibility.
Will I have to start repaying my previous Canada Student Loans now?
No, not if you are registered as a full-time student. You will have to start repaying all your Canada Student Loans once you have been out of school for six months. You must repay your loans even if you have not obtained your degree or found a job. You may, however, be eligible for repayment assistance if you are experiencing financial hardship.
If you return to full-time studies within six months of your last study period, you must submit a Confirmation of Enrolment form, (Schedule 2) to your financial institution whether or not you take out another Canada Student Loan, to ensure your previous loans remain in interest-free status.
Do I still have to confirm my enrolment?
Yes. If you already have a Canada Student Loan and are registered as a full-time student but do not need to apply for another loan, you must still submit a Confirmation of Enrolment form ( Schedule 2) to your financial institution. You must do this every year that you continue in school in order to keep your loan in interest-free status. If you already have a Canada Student Loan and you take out another loan on or after August 1, 2000, you will still need to submit a Confirmation of Enrolment form, (Schedule 2) to your financial institution. This will ensure your previous loans remain in interest-free status as long as you remain in school.
Will the changes affect my Canada Study Grant?
No. Provincial and Territorial student assistance offices issue the cheques for Canada Study Grants.
I have a loan but I am already repaying it - will this affect me?
No. The changes have no impact on students that are already in repayment. You will continue to deal with your financial institution unless otherwise announced.
I was on/am on Interest Relief - will I still get it? Will I have to re-apply to my bank?
As long as you qualify for Interest Relief you will continue to receive it. However, you do have to re-apply every six months. You can discuss the details with your financial institution.
Do I still make payments on my loan to my financial institution if they are not involved anymore?
Yes. The loan you negotiated was with your financial institution and you must continue to make payments to them unless otherwise announced.
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