Illustration: Deanna Krueger

A practical how-to-guide for paying back your OSAP

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By Urbi Khan

The impending thought of repaying your OSAP may always be lingering in the back of your mind, especially when you’re finishing up your last couple of years of university or if graduation is right around the corner.

Although the course of repaying your OSAP seems like a tricky path, planning things out in advance will help you in the long run. So, we’ve decided to break down some facts as to how you can go about paying back your OSAP loans.

When do you start repaying?

After you graduate, you have a six-month grace period to repay your loans. During this grace period, you will not be charged interest in the Ontario portion of your loans but you will be charged in the Canada portion—some of your loan is given to you by the provincial government and some is given from the federal government.

As of 2018, students can now wait until they have a minimum salary of $35,000 to repay the provincial portion of their loans. Previously, the minimum salary was $25,000.

Where do you pay?

OSAP is not a financial institution, it’s a student aid program. You pay your OSAP fees directly to the National Student Loans Service Centre (NSLSC). When it’s time to start repaying your OSAP, NSLSC will send you an intimidating looking notice in a legal sized envelope by mail. The notice will detail how much you owe, how much interest will be applied to your loans, how much and when the money will be withdrawn from your bank account. Monthly payments will be withdrawn from your bank through automatic withdrawals or by cheque, online banking and telephone banking. Make sure you have created an online NSLSC account so you can stay in touch to rectify any problems you may face and always make sure that personal information is updated.

Need assistance?

If you are in need of assistance, you can apply for the Repayment Assistance Plan (RAP) through the NSLSC. By applying for the RAP, you may qualify for a reduced monthly payment or depending on your circumstances, no monthly payment.

What happens if you don’t pay your loans?

Claiming bankruptcy will not let you opt out of repaying your OSAP loans. However, there is a seven-year rule. The rule entails that if you file for bankruptcy after seven-years to the date you stop being a full-time student, you will be released from the obligation of the repayment your OSAP loans.

Overall, paying back your OSAP should go as planned if you plan ahead and have savings in place. Start saving up from summer jobs.

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