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New Payment Assistance Plan Coming

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    Posted: 14/January/2009 at 9:04am
New Payment Assistance Plan Coming - from Canlearn Website

Student financial assistance - Repayment Assistance Plan


Effective fall 2009, a new student loan Repayment Assistance Plan (RAP) will be in place to make it easier for student loan borrowers to manage their debt by ensuring that they can afford their loan payments.

The Repayment Assistance Plan is an optional program for students facing difficulty in meeting their student loan payments. The Repayment Assistance Plan ensures that:

  • No borrower will be required to make a student loan payment above an affordable level.
  • No payment will be required from those with very low incomes.
  • No borrower will have a repayment period exceeding 15 years.
  • Eligibility criteria will be simple and standardized, making it easier for borrowers to understand and predict the requirements and obtain the support they need.

The Repayment Assistance Plan replaces the Interest Relief and Debt Reduction in Repayment programs. Current Interest Relief and Debt Reduction recipients will transition into the new Repayment Assistance Plan.

Under the Repayment Assistance Plan, the Government of Canada will agree not to collect the difference between what a borrower can afford to pay and the borrower’s normal monthly loan payment.

For the first five years of repayment, eligible borrowers will make either no payments or affordable payments based on their income towards their loan. These affordable payments will never exceed 20% of their income. If borrowers are still in difficulty after five years on RAP, more generous assistance will become available. Borrowers will continue to make their affordable payments, which will be applied towards the principal of their loan first, while the Government will make the remainder of the payment. In this way the entire loan will be repaid within 15 years. Throughout this period, borrowers will face the same application process and eligibility criteria and will make affordable payments based on the same principles, so the process will be seamless from start to finish.

Human Resources and Social Development Canada is currently developing the policies to determine how full-time and part-time loans will interact with respect to the Repayment Assistance Plan.

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Mark O'Meara

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 14/January/2009 at 1:45pm
This topic is an announcement only... A new forum for discussion of the RAP program has been created for further discussion and announcements.
 
The details of this program are still forthcoming - I'll keep searching for new info as it comes available.  At least they appear to be trying to do something to help. 
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Mark O'Meara

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 02/April/2009 at 9:32am
OK.... its April...Students are graduating this month... where are the details of what help will be available to them?   None.... how can these graduates plan for paying back their loans if they dont know any details about the new RAP program...
 
Also, the canlearn site says they will use Gross Income... and last years salary.....
How will people who've lost their jobs or had reduced hours apply if they use the previous year's salary?
 
New Program same mistakes....      
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 02/April/2009 at 9:34am
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 29/April/2009 at 9:50am

Dear Mr. O'Meara:

 

 

 

I am writing with regard to your electronic correspondence of April 2, 2009, in which you posed a number of questions about the Repayment Assistance Plan (RAP).

Here's a reply to a letter I sent... 

 

I am aware that you disagree with the Program's use of the borrower's gross income in determining eligibility for the RAP.  That said, I assure you that the eligibility formula takes a measure of expenditures, including estimated taxes, into consideration when establishing the borrower's affordable payment. 

 

In terms income used to determine eligibility, the borrower signs an attestation for their expected income for the next six months and the borrower may be asked to substantiate this by providing further documentation.  This would allow the assessment to account for significant differences, such as loss of employment.

 

Lastly, the 15 year repayment period will apply to all eligible borrowers whose loans are in good standing.  You may be interested to learn that an on-line Repayment Assistance Estimator is now available at www.canlearn.ca <http://www.canlearn.ca/>  which enables users to determine the likelihood of their eligibility for the new RAP.  Information about the RAP is posted on the site as it becomes available.  I encourage you to visit the CanLearn regularly. 

 

Thank you for writing.

 

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