NSLSC: Canada’s Student Loan Program

February 15, 2021
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NSLSC stands for National Student Loans Service Centre. The NSLSC manages federal loans as well as provincially-integrated loans for British Columbia, Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador.

The NSLSC is in charge of initiating most federal loans, and although those are the most popular choice, provincial funding is also worth considering. In this article we will cover everything you need to know if you're a student and considering to apply for a loan with them.

The National Student Loans Service Centre (NSLSC) issues a number of different loans with varying time frames, terms and interest rates. Depending on which province you belong to, you'll need that region's specific information to apply. In this article we'll cover what NSLSC is, the different loans that they issue, their varying interest rates and who is eligible for these loans, among other things.

What Is The NSLSC?

The NSLSC is the institution in charge of managing student loans, the NSLSC and the Ontario Student Assistance Program (OSAP) work together. The NSLSC provides the funds once your loan has been approved by the Ontario Student Assistance (OSAP). The repayment process starts once the person is done with their education and is no longer a full-time student. Only then is the former student expected to make payments to the NSLSC.

The Student Loans That NSLSC Issues

Depending on where you reside there are different types of loans you could apply for, here's a comprehensive list of what the NSLSC provides:

  • Canada Student Loans for Part-time And Full-Time Students.
  • Canada-Ontario Integrated Student Loans.
  • Canada-Saskatchewan Integrated Student Loans.
  • Canada-Newfoundland and Labrador Integrated Student Loans.
  • Canada-New Brunswick Integrated Student Loans.
  • Canada-British Columbia Integrated Student Loans.

Difference Between Federal And Provincial Loans

The difference between federal and provincial/state loans is quite simple, the federal loan is provided by the Canadian government (i.e Canada Student Loans program or CSLP) and the provincial/state loan is issued by the provincial government. Some states have their own separate student aid program and some states partly contribute to the loans that the government issues.

Integrated Student Loans

Usually, the loan that is issued comes 60% federal government and 40% from your provincial government. With integrated loans, your loan is consolidated to make a single student loan so that you will only have to make one payment each month. However this just for easier management, you'll still have to pay the amount that was lent to you by both the governments.

Eligibility

To qualify for an NSLSC loan you must check some boxes first, here's the list of things you need to have:

  • To qualify for the loan you must be a Canadian citizen, you will not qualify for the loan unless you have Canadian citizenship.
  • You must be a permanent resident of a province in Canada that provides Canada Student Loans, if you belong to a state/province that doesn't issue Canada Student Loans, you will not qualify for the loan.
  • To qualify you must demonstrate that you're in need of the loan.
  • You must take at least 60 percent of the full course load if you're a full-time student and at least 40 percent for students with a permanent disability. And 20 to 59 percent of a full course load if you are a part-time student.
  • You must be enrolling in or applying for a degree, diploma or certificate in a program offered by an approved post-secondary school institution that is at least 12 weeks in length.
  • You must continually show adequate academic results to continue receiving student loans/grants each year.
  • If you're 22 or older and applying for the loan, there will be a credit check (credit check is a detailed history of how you've been paying your bills) you must pass in order to qualify for the loan.
  • You must not have reached the maximum lifetime limit of funding or financial assistance.

Maximum Lifetime Limit For Student Loans

There are limits on the number of weeks a student can receive student aid. This also includes your time in school. The period during which you're a full-time student is referred to as the “interest-free period”. As its name suggests, during this period interest will not be added on to the amount that you'll later be expected to pay. However, once you reach the lifetime limit, interests start to accumulate. Six months after you graduate and finish your studies, you'll be expected to start repaying the loan. Below are the corresponding limits for both full and part-time.

The lifetime limit for students in non-doctoral studies is 340 weeks.

For students in doctoral studies – the lifetime limit is up to 400 weeks.

Lifetime limit for Students With Permanent Disability – 520 weeks.

NSLSC: Loan Stages

Once your loan has been approved, your loan will go through 3 stages, these are called respectively: In study, the non-repayment period and the repayment period.

In Study

This is the easy part. While still in school, you're not required to make any payments and your loan will not accrue interest during this time. It's important to confirm your enrollment every year so that you can maintain your interest-free status.

The Non-repayment Period

Also known as the grace period, the non-repayment period is the time-lapse during which you'll not be expected to make any payments on the loan. After you finish your studies, you'll usually have 6 months, except in the case of Prince Edward Island, where the grace period lasts 1 year. However, the interest could be charged to some portion of the loan depending on your province or territory of residence, to find out more about this you should contact your respective student aid office.


Note: No interest will be charged on Labrador, Canada Student Loans, British Columbia and Newfoundland and Canada portion of Integrated Student Loans during the six-month grace period (non-repayment period).

Repayment Period

Once the six-month non-repayment period is over, you'll be expected to start making regular loan payments.

Related: Check out our article on SPC Card, a loyalty card designed for students, that offers discounts ranging from 10% to 50%.  

National Student Loans Repayment

Students who are in debt can take advantage of the minimum 6-month grace period but there are also other ways to mitigate the debt. If you're unable to or have difficulty repaying your loan, you can apply to have the government of Canada and your provincial government help you.

There are a bunch of loan repayment options that can make it easier for people to repay student loans by establishing payments according to each person's financial situation. For example, by customizing your payment terms.

Repayment Assistance Plan

If accepted into the Repayment Assistance Plan (RAP), you will be qualified or eligible for a reduced or no monthly payment at all. Depending on your income, the monthly payment that you're expected to repay will be reduced or removed entirely if you're accepted into RAP.

Repayment Assistance Plan works in sessions that last six months. You will have to apply for RAP, once the six-month session or period ends.

The Repayment Assistance For Borrowers With A Permanent Disability (RAP-PD)

If you qualify for the Repayment Assistance Plan and have a permanent disability, you can benefit from the RAP-PD. With this program, you'll get the benefits of RAP and you may also get a reduced monthly payment, allowing you to pay the loan back at your own pace.

Severe Permanent Disability Benefit

If you have a Severe Permanent Disability that keeps you from full or part-time technical training or work, you may be eligible to have your debt cancelled entirely through the Severe Permanent Disability Benefit. Keep in mind that, according to the NSLSC policies this disability must prevent you from taking a job for the rest of your life.

Family Doctors And Nurses

If you are a nurse or medical practitioner, working as a family doctor or resident in family medicine in a remote or rural community, you can apply for assistance and have all or part of your student loan excused if you're eligible.

Over the span of 5 years, you can receive up to $40,000 in loan forgiveness if you're a family doctor or resident in family medicine and up to $20,000 if you're a nurse or nurse practitioner.

Canadian Forces Reservists

If you are a reservist in the Canadian Forces in a designated operation, you do not have to make payments on Canada Student Loans or provincial or territorial student loans.

Members of the military reserve forces or reservists in the Canadian Forces designated operation do not have to make payments on Canada Student Loans or territorial student loans.

Customize Payment Terms

If you're struggling financially and having difficulty paying back your loan, you can request to customize your payment terms and decrease your monthly payments. Similarly, if you want to pay off your loan faster, you can apply and increase your monthly payment.

Note that decreasing your monthly payment will increase the time it'll take to pay off your loan, and the longer it'll take to pay back, the more interest you'll have to pay in total.

National Student Loan Interest Rate

Federal loans issue an interest rate of 2.5% plus prime. “Plus Prime” refers to the average bank prime rate in Canada, which changes often, but is at 2.45% as of 31st March 2020, dropped from last year's 6.45%. Pretty good.

This means the interest rate can go up to 4.95%. For example, if you have a federal loan of $20,000, you'll have to pay an interest of $990 on your loan. And the repayment period starts six months after the borrower ceases to be a full-time student. This last part also includes changing your status from full to part-time student.

Newfoundland and Labrador, Quebec, and Manitoba Student Loans

When it comes to getting a loan, Newfoundland and Labrador, Quebec and Manitoba are the best provinces to apply for student financial aid because tuition rates in these states are the lowest in all of Canada.

  • Newfoundland and Labrador at an average of $2,885 per semester.
  • Quebec at $2,961 per semester.
  • Manitoba at a $4,501 per semester.

Newfoundland and Labrador offer non-repayable grants to permanent residents that are eligible. If you're eligible for the loan you will be given grants that can provide you with up to $100/week of study. This province has removed the option of provincial student loans entirely and instead offers grants. The lifetime limit of these grants ranges from 340-520 weeks. The lifetime limit depends on the degree of study chosen and whether or not the student has any registered disabilities.

Quebec is known for its impressively low-interest rate of 0.5% plus prime, resulting in a 2.95% interest rate overall, considering the current prime rate of 2.45%.

Manitoba If you're a student and a permanent resident of Manitoba, you're in luck. The interest rate in Manitoba is 0.0%. You won't have to pay any interest on your student loan.

ProvinceInterest RateAdditional FeaturesApply Now
Manitoba0.0%Zero-interest student loansApply Now
Quebec0.50% + PrimeLoans and grants for full and part-time studentsApply Now
Newfoundland and LabradorNot SpecifiedNon-refundable grants for approved studentsApply Now

Loans For Other Provinces

Ontario

Ontario Student Loans are jointly funded by both the Government of Ontario and the Canadian Government. The loan isn't supposed to replace your current financial resources, but it'll certainly make easier for you to cover your expenses. Ontario offers a relatively low interest rate of 1% plus prime, totalling to 3.45%, considering the current prime rate.

ProvinceInterest RateAdditional FeaturesApply Now
Ontario1.0% + PrimeNot SpecifiedApply Now

Alberta

Alberta Student Loans use CIBC’s (Canadian Imperial Bank of Commerce's) official prime rate for determining their interest rate. Here you can decide which interest rate you want to go with, you'd have two options: Floating Rate and Fixed Rate. The floating interest rate varies with the market and fixed doesn't because of this, the fixed interest rate is usually a little higher floating interest rate.

ProvinceInterest RateAdditional FeaturesApply Now
Alberta Floating: CIBC’s prime rate +1%.

Fixed: CIBC’s prime rate +2%.
A choice between fixed and floating/variable rateApply Now

British Columbia

British Columbia recently reduced interest rates on student loans to just the prime. This means that the interest rate on your loan will be equal to the prime rate at that time and could rise and fall with the prime rate but unlike the other states, if you live in British Columbia you won't have to pay any extra interest on top of that. For example, if the prime rate is 2.45% at the time, the interest rate on your loan will also be 2.45%.

ProvinceInterest RateAdditional FeaturesApply Now
British ColumbiaPrime Easy online application, special programs for students with dependentsApply Now

Related: Check out our article on The Best Credit Cards For University of British Columbia Students.

Saskatchewan

Saskatchewan offers an interest rate of 2.50% plus prime. In Saskatchewan, the NSLSC handles all the loan processes. Also, there's no provincial aid option, only federal.

Province Interest RateAdditional FeaturesApply Now
SaskatchewanPrime + 2.50% No provincial student aid option, federal onlyApply Now

Prince Edward Island

Prince Edward Island: If you're a resident of Prince Edward Island, you're in luck. Firstly the grace period in PEI is one-year, rather than the standard six-months, meaning when you graduate you will be given an additional extra year in which you will not be expected to make any payments. Plus Prince Edward Island has a debt reduction program that can remove up to $3,500 per academic year from your outstanding loan. In addition to that PEI also issues bursaries awarding between $4,400 – $8,800.

Nova Scotia

Nova Scotia is one of the provinces with the highest tuition rates, which makes it considerably hard for most students to pay for it comfortably without needing any help. The interest rate in Nova Scotia is 0.0%, meaning you will only have to pay the loan with no interest, which is great news considering the high tuition rates.

ProvinceInterest RateAdditional FeaturesApply Now
Nova Scotia0.0%Zero-interest for qualified borrowersApply Now
Prince Edward Island0.0% No application required for bursaries, just enrollmentApply Now
Nunavut1.0% below PrimeSpecial grants for lower-income households Apply Now
New Brunswick Floating rate: Prime plus 2.5%

Fixed-rate: Prime plus 5%.
Special Free Tuition plan Apply Now
Northwest Territories1.0% below Prime0.0% interest for those who live in NWT after schoolApply Now
YukonPrime + 2.50%Academic excellence offers further aidApply Now

How To Apply

  • Step 1: Firstly you'll have to fill out an application. You can do that online as well. The links to all provinces/territories are mentioned.
  • Step 2: After that, you'll have to wait for Notice of Assessment from your province. You'll receive the NOA through mail or email through which you'll be told if you qualify for the loan or now. If you qualify you'll also receive a Master Student Financial Assistance Agreement (MSFAA) if you haven't completed one already.
  • Step 3: Review and accept the MSFAA. Go through the MSFAA carefully. The MSFAA is a legal contract that will contain all the terms and conditions under which you will receive the loan and eventually pay it back. Once you're ready to accept it.
  • Step 4: Submit your loan documents. You can do that online through your NSLSC account if you have one and if you don't, no worries, click here to create one.
  • Step 5: Confirm your enrollment. Lastly, before you receive the loan, your school will have to confirm that you're enrolled at a post-secondary institution that is approved by the NSLSC.

COVID-19 And Student Loan Repayment in Canada

To support students during the COVID-19 outbreak, the Canadian government has suspended all student and apprentice loans until September 30, 2020. During this time you will not be expected to make any payments and no interest will accumulate on your outstanding loan. However, this only applies to federal loans, if your loan was lent to you by a provincial government, you will have to check with your provincial student loan provider whether repayments on the are required or not.

In Summary

The NSLSC is the site that you can visit to get all the information relevant to student loans in Canada. Considering that the post-secondary education can go as high as $70-80,000, it's often incredibly hard for families to pay it off comfortably without needing any assistance or help but luckily there are many options with reasonable interest rates and (if need be) customizable terms, that can help carry the weight.

Related: If you're looking for a loan and don't have the best credit score, you should check out our article on LendingMate. LendingMate offers loans up to $10,000 to students with little or now credit score.

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