Maintain interest-free status


If you are enrolled in an approved full-time study program you will not have to make payments on any outstanding student loans.

What is interest-free status?

Interest begins to accrue on your student loan the day after your interest-free period ends. Payments are not mandatory until you've been out of school for 6 months. This is known as your non-repayment period, or "grace period".

If you return to school with a full-time student loan at a designated post-secondary institution before your grace period ends, the interest that had been building since your last study end-date will be eliminated and you will be in interest-free status for your new study term.

Being in interest-free status means you are in a 'funded term' whether you have new loans or not, so if you withdraw or have an unsuccessful term, it may affect your eligibility for further assistance.

Note: Secondary level courses (high school) may not be used towards the full-time status requirement in order to maintain interest-free status.

How do I maintain interest-free status?

There are two ways to put outstanding student loans into interest-free status :

  1. 1 Returning student receiving further student loans:
    If you qualify for and receive new loan funding, it will automatically put previous Canada (CSL) and B.C. (BCLS) loan balances into interest-free status. Separate confirmation of enrolment for interest-free is not required. The period of interest-free status will start at the beginning of the confirmed period for which the loans are issued, and will continue up to and including your study period end date on your application, unless you withdraw from full-time studies. If you have outstanding interest owing, in most cases you will be required to pay the interest before your loan will be put into interest-free status.
  2. 2 Returning student not receiving further student loans:
    One interest-free application is required to place both your Canada student loan portion and B.C. student loan portion of the Canada-B.C. integrated student loan into interest-free status.

    You can submit an application online or submit a paper Schedule 2 form to the National Student Loans Service Centre (NSLSC).

    It is important to submit your interest-free application as soon as you return to studies to ensure your interest-free starts as of your study start date. If you have outstanding interest owing, in most cases you will be required to pay the interest before your loan will be put into interest-free status.

Exceptions

Except in circumstances (a) and (c) below, interest-free status will not be backdated to the study start date if the confirmation of enrolment (COE) is received after the study start date. If there is outstanding interest owing, you will be required to pay the outstanding interest, or you may, by request, add up to 3 months of interest onto the principal amount of the outstanding loan balance, prior to the approval of interest-free status (see items "b" and "c" below).

  • (a) Continuation: If you return to full-time studies before your six month grace period ends, and the COE for interest-free status is received before your grace period ends, the interest that has accrued since the last study end date will not be payable. You will be in interest-free status as of your new study start date, up to and including your new study end date.
  • (b) Late Continuation: If you return to full-time studies before your six month grace period ends but the COE for interest-free status is received after your six month grace period ends, the interest that accrued during your grace period will be added onto the principal of the loan. Any interest that has accrued after your six month grace period up to the date the complete and accurate COE is received at NSLSC must be paid, or you may, by request, have up to 3 months of interest added onto the principal of your loan, prior to the approval of the interest-free status. In such case, you will be in interest-free status as of the date the complete and accurate COE is received at the NSLSC, up to and including your new study end date.
  • (c) Reinstatement: If you return to full-time studies after your six month grace period ends, any interest that has accrued after your grace period up to your new study start date must be paid, or you may, by request, have up to 3 months of interest added onto the principal of your loan, prior to the approval of the interest-free status. In such case, you will be in interest-free status as of your new study start date, up to and including your new study end date.

You are not eligible for interest-free status if:

  1. You are enrolled in full-time studies but also have full-time employment during your study period
  2. You submit notification of interest-free status after your study period end date
  3. You owe outstanding interest
  4. You do not meet the Canada Student Loan Program and Canada Student Financial Assistance Regulations (SOR/95-329) requirements
  5. You are restricted by StudentAid BC as a result of an audit
  6. You have reached the lifetime maximum weeks for interest-free status

Note: All 'funded terms' are included in the calculation for lifetime maximum. This includes interest-free periods of which no student loan funding was issued.

Interest-free on part-time time loans
To put part-time Canada student loans in interest-free status, complete a paper Schedule 2 form and submit it directly to the NSLSC.

Interest-free on loans prior to August 1, 2000
If you have B.C. student loans prior to August 1, 2000, complete a paper Schedule 2 form and submit it directly to the Financial Institution holding your loan.

What is the lifetime maximum for interest-free status?

The lifetime maximum weeks for interest-free status are:

  • 340 weeks for non-doctoral
  • 400 weeks for doctoral
  • 520 weeks for persons with permanent disability

Once the maximum number of weeks is reached, interest on your Canada-B.C. integrated student loan begins to accumulate; however, if you remain in continuous full-time studies, you can apply for payment deferral. During this period, you are not required to begin repayment until the completion of your studies, as long as confirmation of enrolment is received and approved by the NSLSC. All interest that has accumulated, unless paid, will be added to the principal amount of your outstanding loan balance. You will be required to start making payments six months after the completion of your full-time studies.

Your maximum weeks of allowable student financial assistance includes weeks you are in interest-free status.