A student loan goes through three stages.
- In study: You do not need to make payments while you are in school and your loan won’t accumulate any interest. It’s important that your enrolment is confirmed every year that you are in school to maintain interest-free status.
- Non-repayment period: When you leave school, your loan will be in the non-repayment period for six months. You’ll receive an information package explaining the details of your loan and the repayment schedule. You do not have to make any payments during this stage. However, if you want to start paying down your loan faster, you can do so. It’s important to remember that the Ontario portion of your student loan will incur interest during this stage.
- In repayment: Your loan will enter the repayment stage six months after you leave school. It is during this stage that you will need to make monthly payments.
Learn more about the stages of a student loan.
You can log into your National Student Loans Service Centre (NSLSC) account to find information on your student loan, customize your payment terms, and apply for repayment assistance. It’s important to never miss a payment because it can negatively affect your credit score.
Here’s everything you need to know about paying back OSAP and what happens during the repayment period. Watch this video from the NSLSC to learn more.
Interest Rates and Payments
While you are in school, your loan does not accumulate interest. When you leave post-secondary education, your student loan will then start accumulating interest. The interest rate on the Ontario portion of your student loan is prime rate + 1.0 percent. As of April 1, 2023, the federal portion of student loans will no longer accumulate interest.
You can calculate an estimate of what your monthly payments will be when you’re finished school using these tools:
Your repayment schedule will be based on a 9.5-year pay-back schedule. You can make additional payments at any time to help pay your loan down faster. If you need more time, you can extend it to 14.5 years. This will lower your monthly payments but increase the amount of interest your loan will accumulate. You can log into your NSLSC account to customize your repayment schedule.
There are many ways to make a payment. You can log into your NSLSC account to set up pre-authorized debit or make payments through:
- Online banking
- Telephone banking
- Monthly post-dated cheques
- Money orders/cashier’s cheques
- Bank drafts
You can also make a one-time lump sum payment.
I need help repaying my student loan, what should I do?
You can fill out a Repayment Assistance Plan (RAP) application through your NSLSC account. You can apply for repayment assistance at any time during the repayment period. You must reapply every six months to continue to be eligible for the plan.
Interest Relief: This stage is available for up to 60 months or until you have been out of post-secondary education for 10 years, whichever comes first.
- Your monthly affordable payment will first go toward paying down your loan principal
- If your payment is large enough, the remainder will go toward monthly interest
- The Government of Ontario covers all monthly interest that is not covered by your payment
If you are not required to make any payments at all during this stage, the Government of Ontario will cover your entire monthly interest charges and your loan principal would stay frozen.
Debt Reduction:
This stage comes after you’ve been in the interest relief stage for 60 months or you have been out of post-secondary education for 10 years, whichever comes first.
- You will make either no payments or a monthly affordable payment, depending on your income and family size
- Your monthly affordable payment, if any, will go first toward paying down your loan principal
- If your payment is large enough, the remainder will go toward paying monthly interest
Questions?
Our Financial Aid team is here to help!