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CELYN 
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Joined: 12/November/2004
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 Topic: ONTARIO DEBT REDUCTION IN REPAYMENT
Posted: 12/November/2004 at 1:17pm |
Hi,
I was looking for information about the debt reduction in repayment and saw some websites which mentioned the new changes. One change to the debt reduction in repayment is the ONTARIO DEBT REDUCTION IN REPAYMENT. One website mentioned the change will take place in November 2004. More information is available on the OSAP website also: http://osap.gov.on.ca/eng/not_secure/new.htm
From the information, this is in addition to the Canada Debt Reduction in Repayment, I think.
I have my loan with CIBC and applied for debt reduction in repayment in Sept. of this year. I was sent a letter and application mentioning it's for the CSL portion of the loan. The letter stated you only get one debt reduction in repayment. Later I was called by CIBC (around October) stating the changes to the loan in repayment plan. The lady mentioned the new changes is the first reduction is up to $10,000 or 50% of the principle. You now also get 2 more reductions, and other stipulations such as you can't get new loans until all previous loans are paid off, etc.
I was not told of the Ontario Debt Reduction in Repayment. I guess because this is relatively new. The date of the announcement on the OSAP website stated it as Oct. 29, 2004.
I'm writing this to let you all know about this new change. I was not aware of this until yesterday.
The following is found on this website: http://osap.gov.on.ca/eng/not_secure/DRR.htm
The Ontario government has developed a Debt Reduction in Repayment (DRR) program to provide assistance to borrowers who have exhausted interest relief and are experiencing exceptional long-term financial difficulties. Assistance is available to borrowers holding Ontario Student Loans only. For information on debt reduction on Canada Student Loans and/or Canada-Ontario Integrated Student Loans, contact the National Student Loans Service Centre or go to the CanLearn website at http://www.canlearn.ca.
You may qualify for up to three Ontario Debt Reduction in Repayment payments during your lifetime, up to the following limits:
- First payment of up to $4,300
- Second payment of up to $2,200
- Third payment of up to $2,200 "
P.S. I will follow up and let you know when my CSL debt reduction in repayment is approved since I've read on one of the thread someone asking if anyone who has a student loan with CIBC reveiving a debt reduction. I expect my CSL debt reduction to be approved by Dec. 2004. If anyone else has information, please update.
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CELYN
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Joined: 12/November/2004
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Posted: 18/November/2004 at 5:38pm |
Update:
I had spoken with Ambrose at CIBC National Student Centre this week and inquired about this Ontario Debt Reduction in Repayment. I asked if this is different from the Debt Reduction in Repayment I had sent in a while back. The other one looks like it's a CSL and he said it is.
He said the Ontario Debt Reduction in Repayment is new and CIBC National Student Centre has not received guidelines as how to proceed with this yet from the government.
He said to call back periodically and at the end of this month they will probably have it by then. I informed him of the application form and instructions available on OSAP website. I asked for the website URL and I gave it to him. I was told I could send print and send in the application if the website mentions the guidelines and documents required.
My suggestion to anyone who wants to send in an Ontario Debt Reduction in Repayment is to phone and ask before sending it in. This is due to the fact some might be holding a Canada-Ontario Integrated Student Loans and the debt reduction form - I believe - would be different.
celyn
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CELYN
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Posted: 18/November/2004 at 5:40pm |
Edit - "I asked for the website URL and I gave it to him."
Should be: "He asked for the website URL and I gave it to him."
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littleJ
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Joined: 24/November/2004
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Posted: 24/November/2004 at 6:15am |
Hi Celyn,
Just wondered how exactly you qualify for debit reduction? Do you have to be on Interest releif for so long before you can qualify, and also, if you have made payments to your loan can you still quallify for it?? Any info would help, im in a real bind right now.
My email is juliebaker@bmts.com
thanks.
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momof2
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Posted: 24/November/2004 at 6:52am |
littleJ
you have to have exhausted your interest relief and your loan has to be in good standing to qualify. they base it on your total household income, check the OSAP website for more info
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CELYN
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Posted: 25/November/2004 at 4:40pm |
little,
momof2 is correct. You have to have exhausted interest relief and your loans have to be in good standing in order to qualify for debt reduction. I believe the interest relief exhaustion period is 30 months.
I'm in Ontario so the information I have may not apply to you. But here's what I do know.
Yes, in order to qualify for debt reduction you have to be making payments. Either interest only payments or monthly payments.
For the CSL Debt Reduction in Repayment and the Ontarion Debt Reduction in Repayment you have to have used up all interest relief availablet to you.
Keep in mind, once you have applied (and approved?) for debt reduction, you cannot apply for any interest relief or student loans even if you return to school. Once all your student loans are paid up, then you can apply for new loans.
I was given a formula they use to calculate the CSL debt reduction but I'm not sure if it's a new one or old one. I was told by a CSR of new changes to the CSL Debt Reduction after I had sent in the form.
My situation is not very complicated (ie. loans are consolidated, not in default, etc). I've used up 54 months of CSL interest relief available to me. I'm on in interest only payments for now.
For the income part, they use both your spouse or common law income to determine the monthly income cutoff level.
The best thing is to call up the bank or National Student Loan Centre - whoever is holding your loans - and inquire. Also, check the OSAP website for more informatin. OSAP is for Ontario student loans.
If you need more information, I will email you. Let me know.
celyn
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CELYN
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Posted: 25/November/2004 at 4:41pm |
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Oh, if you're single then they only use your income.
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momof2
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Posted: 25/November/2004 at 4:56pm |
for ontario DRR here's the link for their income table...
http://osap.gov.on.va/eng/PDF/0405/Gross%20Income%20Table.pd f
for canada student loans i havent been able to dig up anything similar, but here's an excerpt from www.aved.gov.bc.ca/studentservices/student/finish/debt_red/f ed_debt.htm...
< name=>
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Debt Management Tools
Federal Debt Reduction
Debt reduction recognizes a student/borrowers' inability to make full payment on their outstanding student loans. Students who have exhausted interest relief under the Interest Relief Program and who have also been out of post-secondary studies for at least five years, may qualify for debt reduction, thereby reducing the Canada Student Loan principal to a more affordable level.
If annual payments, on average, exceed 15 percent of the family's income, the Canada Student Loan principal will be reduced. The maximum amount of assistance is the lesser of up to 50 percent of the loan amount, or up to $10,000. The loan amount includes combined outstanding federal and provincial student loans. |
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momof2
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Posted: 25/November/2004 at 4:59pm |
CELYN
how did you manage to get the bank to approve interest only payments ?? i deal with BNS and they never even presented this option to me - is this option available to everyone ??
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CELYN
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Posted: 25/November/2004 at 5:08pm |
momof2,
I was applying for CSL debt reduction. When I called and ask the CSR in charge of debt reduction I was told to call back and speak with any other CSR and ask for this since he only deals with debt reduction.
My loans are with CIBC National Student Loan and I'm in Ontario.
When I call and ask for interest only payments the CSR said it'll be put through and I will get the statement. I receive the interest only payment amount letter in the mail within 2 weeks as I recall.
I don't remember being asked how much income per month I have. But I guess they already had the approximate amount in their system based on fact I've been prescreened for the debt reduction form and the form is on its way to me.
I guess you would have to ask for it. If they allow you to make interest only payment it's for a 6 months period.
I don't know how many times they will allow renewal. I think I read in this form the maximum amount of times is 2. Or perhaps I've read it on OSAP website.
Call and ask them momof2.
celyn
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momof2
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Posted: 25/November/2004 at 5:18pm |
thanks for the info
i will talk to scotiabank and see if they also offer this option.
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
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Posted: 25/November/2004 at 5:26pm |
Moma2,
Are your loans in collection? Or are they current? If they are in collection, you will not be approved for interest-only in this event. I also recall you applying for reduction (DDR) at some point. Can you describe your situation so it can be better understood. DDR is another very large stigma.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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CELYN
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Posted: 25/November/2004 at 5:28pm |
momof2,
You're welcome. I've found quite a bit of useful information on this website and hope I could help others based on my experience.
celyn
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CELYN
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Posted: 25/November/2004 at 5:30pm |
Johnny is right. I think your loans have to be in good standing. Mine was when I called for interest only payments. Previous to my call I was on interest relief.
celyn
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momof2
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Posted: 25/November/2004 at 6:13pm |
unfortunatley i am currently in default but have not been contacted by any CA's nor have i been told that my loan has actually gone to collections. I'm going to try anyways, since they never advised my of this option I may be able to get my loan recalled, though its unlikely that i could pay the arrears at this point . If it were interest only i could keep at least my ontario loan out of collections but with my health problems i'm not holding my breath for anything good to happen to me. i'm only delaying the inevitable since i can't work and wont be able to repay the loans regardless
i have applied for DRR and was denied, but i am appealing the decision. i am also trying to get my student debt forgiven due to health reasons and starting the rollercoaster ride of trying to get accepted on medical disability. not the greatest place to be when you suffer from depression.
my story in short form:
graduated, exhausted my maximum IR, tried to revise my terms and couldnt as i was already at the max term for repayment, applied for DRR and was denied since my hubby makes what they consider too much money (though if we were bankrupt the superintendent of bankruptcy would think we couldnt afford my loan payments  ) ,health problems hit the fan, defaulted, and am waiting for the CAs to start calling. still havent heard a peep form them, though. am trying desperately to get some assistance wrt my health as i cannot even afford the medication my doc has prescribed for me to hopefully help my fibromyalgia and depression. can't have surgery for my carpal tunnel because we cant afford for hubby to take any time off work while i recover. am feeling very frustrated and worn out, my stress levels are through the roof to the point my doc has threatened to hospitalize me for a few days to ensure i'm getting enough rest. dont see how my situation is ever going to improve when my fibromyalgia and depression and chronic fatigue make it impossible to function on a daily basis.
i guess that wasnt very short. any suggestions ??
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Kashaf
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Joined: 28/December/2004
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Posted: 28/December/2004 at 11:55am |
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I have exhausted my first 30 Month period of interest relief. Now
I am on the extended Interest releif program. My Loan is in good
standings. I wanted to know whether I should apply for interest
relief or Debt Reduction.
The reason why I am asking is because I have $10,000 dollars that I can
put towards repayment of my loan. I have a total of $25,000 of
student loans (federal and an ontario student loan) . After
reading the postings on the forum I realized that if I can get a debt
reduction program I may be able to repay my loan in one shot. I
dont know if this plan can be executed. Also, I do not know how
much the debt will be reduced. Can someone please help me.
The Bank I deal with is CIBC
Thanks
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momof2
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Posted: 28/December/2004 at 12:07pm |
kashaf
i am pretty sure you have to exhaust your total of 54 months of interest relief before you can apply for debt reduction. call CIBC and ask about this. if you can put 10K down on your principal right now, you would likely cut your interest owing by quite a nice chunk. the bank may wonder why you need IR if you have 10K lying around, however.
depending on the actual balances on each loan, you may be able to pay off your ontario student loan with your bounty ( since the ontario loans are generally less than the canada ones). then you could still go through your IR for the canada (and later apply for debt reduction)and not have to worry about the other.
talk to the bank. don't mention the 10K, just ask about how debt reduction works and when you are eligible to apply. go from there.
let us know how things work out.
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CELYN
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Posted: 08/January/2005 at 3:15pm |
Update:
I have spoken with CIBC National Student Center, in December 2004, and was told my CSL Debt Reduction in Repayment application has been approved. It's approved by both the bank and the government. I don't see this reduction being applied to my total outstanding loan. I don't know how long it'll take for this to happen.
As for the Ontario Debt Reduction in Repayment program, I've sent it and asked for update and was told they can't do anything about it right now since they're still waiting for governemtn guidelines.
celyn
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kwelmm
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Posted: 08/January/2005 at 3:20pm |
Celyn---------
Good going!!!! That'll make things much more manageable for you I figure!!
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CELYN
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Posted: 08/January/2005 at 4:23pm |
kwelmn,
Thanks for the cheer. Yes, this will make my loans a little bit more manageable. 
But how can I go on paying when I'm still unemployed.
Oh well, I'm still happy about the reduction, only now anxiously waiting for the official letter of approval and seeing the amount taken off my loans total.
P.S. Correcting my typo in today's update "governemtn guidelines" = "government guidelines".
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ONTARIO DEBT REDUCTION IN REPAYMENT