If you’ve been wondering about your OSAP repayment, or want to know what’s in store before you apply, here are a few things you should know.
1. Interest rates
The interest rates on your first payment date are used to figure out the monthly payment for your loan. The formula used is (Ontario = prime rate + 1%, Canada = prime rate + 2.5%).
Your monthly payment will stay the same even if interest rates change. However, the “principal,” which is defined as the amount applied to your loan balance, will change.
2. When you have to start paying it back
You have a grace period of six months after you graduate OR leave your full-time studies before you must start repaying your loan.
During this grace period you will NOT be charged interest on the Ontario portion of your loans. It is important to remember that you WILL be charged for interest on the Canada portion of your loans.
You can extend your grace period by another six months if you own or co-own a new business in Ontario, or if you work for or volunteer with a not-for-profit organization.
3. How to pay back your loan
You can make payments at any time in order to repay your loan faster. Keep in mind that you make your loan payments to the National Student Loans Service Centre (NSLSC) and NOT to OSAP directly.
4. If you need repayment assistance
If you are having trouble with repayment, don’t panic. You may be eligible for repayment assistance.
For example, if you have a severe permanent disability and you are unable to attend work or school, you can apply for the Severe Permanent Disability Benefit. You can contact the NSLSC for more details.
The Repayment Assistance plan allows you to lower your monthly loan payments for six months at a time. The new amount of your payment is calculated by considering your family income, family size, and outstanding OSAP loan.
If your application for repayment assistance is approved, you and both the provincial and federal governments will be making payments on your loans. Your payments will grow gradually as your income grows but will never be more than 20% of your family income.
You can use the Repayment Assistance Estimator to see if you could be eligible for repayment assistance.
5. How long it will take to repay your loan
Your payments are based on a 9 ½ year pay-back schedule. This pay-back schedule is the average amount of time it takes to pay back OSAP student loans.
You also have the ability lower your monthly payments by extending your repayment period from 9 ½ up to 14 ½ years.
6. Payment calculator
The OSAP website provides a calculator to help you figure out what your monthly loan payments will be when you leave school.
For more information on repaying your OSAP loans, check out the OSAP website.