How to Repay Your Ontario Student Assistance Program Debt
Repaying Ontario Student Assistance Program Debt
After graduating from college, you’re probably riding high.
And deservedly so!
You’ve paid for that degree in sleepless nights, nerve-wracking exams and latte-fuelled all-nighters.
But now that it’s all over, your thoughts are likely firmly set on the future.
Where will you choose to put the knowledge and skills you’ve gained in study to work in practice?
Whatever path your career may lead you down, now is also the time to start planning for a financially secure future.
And a big part of that is learning to manage your debts.
The biggest of which will undoubtedly be your student loan.
In this post we’ll look at the practicalities of repaying your Ontario Student Assistance Program (OSAP).
What is the Ontario Student Assistance Program?
OSAP is a financial aid program available to all Ontario residents who hope to enrich their knowledge and careers by studying at college or university.
All Canadian Citizens, permanent residents and protected persons are eligible for OSAP, which is composed of both grants and loans.
While the grants do not need to be repaid, the loans most certainly do.
If you have recently graduated, OSAP was likely invaluable in helping you to take care of your vital living expenses as well as the books, equipment and accoutrements needed for your studies.
But now that your student years are behind you, you can expect to have to start repaying your loans within 6 months.
How to repay your OSAP Loan: Perils and practicalities
While you’re studying, it’s easy to lose sight of your student debt.
After all, you’ve got a degree to earn.
Worrying about your future finances is a concern that gets put straight on the “laterbase”.
However, when you graduate, you need to take a proactive approach to repaying your OSAP loan.
Following a 6 month grace period after graduation you will be expected to start making repayments.
At some point within this time, you will receive a package from the National Student Loans Service Centre.
This will explain how much you owe, when your first payment is due and what interest rates will be applied.
The Ontario portion of your loan will charged at the prime rate of interest plus 1 percent, while the national portion will be the prime rate of interest plus 2.5 percent.
There is no interest charged during the grace period.
While this package may not exactly be welcome on your doormat, it is vital in ensuring that you know how much you need to budget for repayments.
Budgeting is a really useful habit to get into as early as possible.
It can help you to take control of your finances, ensure that you continue to live within your means and prevent your debts from spiralling out of control.
Do I still need to start repaying my loan if I haven’t found work yet?
It’s an unfortunate truth that many graduates find out a little too late.
The job market can be an unfriendly place for recent graduates.
You may have trouble finding a graduate level position straight away… or even finding any work at all.
While this is frustrating, the unfortunate truth is that you will still be expected to start repaying your loan, even if you are not earning a graduate salary.
However, if you are not in a position to be able to repay your OSAP loan, you may be eligible for repayment assistance.
You can apply for this through your National Student Loans Service Centre account.
However, you will be expected to re-apply every six months if further assistance is needed.
Keep in mind that interest will still continue to accumulate on unpaid portions of your loan.
What happens if I don’t pay my OSAP loan instalments?
Unfortunately, if you default on your loan instalments, you will experience a range of negative consequences.
Your credit rating will be negatively impacted, making it harder to get personal loans, credit cards, car credit or a mortgage in the future.
The debt may also be turned over to a debt collection agency who may take the debt to court.
But don’t worry, there is help and support out there if you’re struggling to repay your debts.
Debts dragging you down? We’re here to help!
We can help recent graduates with a range of debt management solutions to help make their OSAP debt (and other forms of credit) more manageable.
If you’re not sure how to repay your Ontario Student Assistance Program we can provide practical advice that will help you to take control of your debts rather than letting them control you.
Get in touch with us today on (877)879-4770! Since 1999 we’ve helped over 200,000 Canadians from all walks to life to get the fresh financial start they need.