What is Education Funding?

EDUCATION FUNDING is a financial aid program that makes it easy for students and families to attend college. Each Canadian province has its own unique terminology that is used for this government funding.

There are two kinds of funding that are given to people who qualify:

  • Grants: Money you do not need to repay
  • A student loan: Money you need to repay

Funding is available for both full-time and part-time post-secondary students, and it is based on a number of factors; which includes your family income. Some students may get their tuition covered by education funding through the designated province that they have been residing for the past 12 months. For the loan offer, there are programs that can help you repay your student loan once you’re through with school.

The money used in this program is jointly provided for by the provincial and federal government.

WHAT EXACTLY DOES EDUCATION FUNDING COVER?

They cover your college costs, such as:

  • Tuition
  • Books, equipment and supplies
  • Mandatory student fees a school may charge
  • Living expenses (full-time students only)
  • Child care (for students with children)

Who can get education funding?

Education Funding is open to those who are:

  • Canadian citizens
  • Permanent residents, or
  • Protected persons

Approved schools

All IDCI associate schools are government approved schools that offer education funding to multi-cultural communities.

How much you can get

The amount of money you can get depends on your:

  • Education expenses – the amount of money you need for tuition, books, childcare, personal living expenses, supplies, and equipment (this is available for full-time students only),
  • Personal financial situation – how much you and your family are expected to contribute, based on income, family size and other factors.

If you receive social assistance, you need to let us know, so we can coordinate with your caseworker about your educational plans for going back to college, and receiving education funding.

What you need to repay

You need to repay your Student loan.

  • Student loans – This needs to be returned to the government 6 months after you graduate with reasonable interest.
  • Grant or bursary- This is free money that you don’t need to pay back (applicable for people who qualify).
  • Overpayments –You have to return the overpayment that the government has given you and you will re-calculate your education funding once again after graduation. Your income will determine how much grant or student loan that you can enjoy.

NO LOAN PAYMENTS FOR FIRST SIX MONTHS AFTER GRADUATION

No payments are required for six months after your last confirmed study period ends. This is called your six-month grace period. Your study period is confirmed if your application for one of the following programs is approved and your school confirms your enrolment:

  • Education funding for Full-Time Students, or
  • Continuation of Interest-Free Status

During your six-month grace period:

  • No interest is charged on the provincial portion of your loans
  • Interest is charged on the Canadian government portion of your loans
  • No payments are required

Extending your grace period: You can apply to extend your grace payment period for an additional six months if you:

  • Own or co-own a new business in Canada, or
  • Work for or volunteer with a not-for-profit organization

Interest rate on Education funding loans

The interest rates on the provincial and Canadian portion of your student loans are different: (You must remember that every province is different depending on your personal situation and this is subject to change without prior notice.)

  • Provincial portion: prime interest rate + 1%
  • Canadian portion: prime interest rate + 2.5%

The interest rate on your first payment date is used to determine the monthly payment for your loan. If the interest rates change, your monthly payment remains the same. However, the amount applied to your loan balance (“principal”) will change. For example, if interest rates go down, more of your monthly payment will be applied to the principal.

Getting your payment information

During your six-month grace period, you’ll get a package in the mail from the National Student Loans Service Centre (NSLSC) that includes:

  • How much you owe
  • Your total number of payments
  • The date of your first payment
  • The interest rates used to calculate your payment

Get repayment assistance

Apply to the Repayment Assistance Plan if you cannot make these monthly payments. If your family income is low, you can apply to make reduced monthly loan payments – or if you still didn’t find a job and you are in a challenging situation, you can request for a repayment assistance plan so that NO monthly payments will be deducted from your account. You can apply for the Repayment Assistance Plan by filling out an application:

  • Online using your NSLSC account
  • Completing a paper application

If you would like to extend it for another six months after the initial application, you must re-apply to the Repayment Assistance Plan every six months.

How it works
They calculate the new amount of your payment by considering your:

  • Family income
  • Family size
  • Outstanding student debt

If your application is approved, the provincial and federal governments will be making payments for your loans while you are in a challenging situation, just to help you out. Your payments will grow gradually as your income grows – but it is never more than 20% of your family income.

If you have a severe permanent disability

You can apply for the Severe Permanent Disability Benefit if you can’t work or go to school due to the severity of your disability. Contact IDCI to help you and for more information and to request an application.

Get new repayment terms

You can ask the NSLSC to extend your repayment period from 9 ½ to 14 ½ years. By adding five years to your repayment period, the amount of your monthly payments will come down. Log in to the NSLSC and select - customize your repayment terms.

If you do not repay your loans

If you don't make your loan payments, you will be in default. Being in default means:

  • Your debt will be turned over to a collection agency
  • You will be reported to a credit bureau
  • You could be ineligible for further government funding or sponsoring under CIC until the default is cleared
  • Your ability to get a car loan, mortgage or credit card can be affected
  • Your income tax refund and HST rebate can be withheld
  • Interest will continue to build up on the unpaid balance of your loan

Your student debt will only be erased when you have paid it off in full.

IF YOU DECLARE BANKRUPTCY AFTER TAKING A STUDENT LOAN.

You still have to pay your student loan. This means that you cannot avoid it at all and you must continue to make a regular monthly payment until you have fully repaid the provincial and federal government of Canada.