As you near the end of your studies, there’s quite a few things to think about: what career you plan on getting into, where you want to live next, and, for many, how you plan on dealing with your student loans. In this article we’re looking to ease some of your stress by providing you all the information you’ll need to create a clear plan to tackle your student loans.
1. Viewing your loan statement
If you haven’t been able to check yet, or it’s been a while since the last time you got around to it, it’s pretty easy to track how much you’ve received in total and what remains to be paid. Every province’s student loans are accessible through the National Student Loan Service Centre’s (NSLSC) website. The process is fairly straightforward for creating your account and accessing it. When you first log in, you’ll be presented with the amount that you owe. Clicking on the name of the loan (ex. Canada-Ontario Integrated Student Loan for those in Ontario) will lead you to a page with more details, including what portion is owed to the federal and provincial governments, when your study period ends (this will be extended if it’s not your last year), and how much you’ll be expected to pay monthly once your 6-month grace period expires. Clicking “View Loan Statement” will take you to a page providing you both with your loan number, which will be important for later, and a history of every grant, loan, and payment within the past 18 months.
2. Understanding the 6-month grace period
Once you finish your program, you’re given a 6-month grace period where you are not expected to make any payments to your student loan account. The Period of Study End Date begins on the last day of your last semester of school. Note that, while you don’t have to make any payments yet, the provincial portion of your loan may still accrue interest. During periods when you’re not studying, such as summer and co-op terms, it’s a good idea to try to pay off as much of your loan as you can as it helps you avoid interest later on and, obviously, reduces your total bill once you finish your program.
3. Repaying your loans
The average repayment time for student loans is 114 months (just under 10 years) if you start paying once the grace period ends. A quick calculation for your monthly payment is taking your final loan amount and divide it by 100. For example, a $20,000 loan would come out to about $170 a month for 10 years (not including interest). For a more detailed calculation of your loan repayment, use The Federal government Loan Repayment Estimator to give you an idea of what your payments will be like. You can also change the date that your student loan payments come out for better financial planning and budgeting purposes. Pro Tip: Paying back your loan faster will drastically reduce the amount of interest you end up paying in the long-run. You can make additional lump sum payments to your student loan via online banking. Simply add NSLSC as a payee and use your student loan number as the account number. This can help repay your debt faster while keeping your monthly payments the same.
Should you end up having difficulties with the 10-year repayment plan, the government allows requests to have the period extended up to 180 months, or 15 years. More info on the program can be found here.
With this information on hand, hopefully you’ll find it easier to navigate the student loan application and repayment process. For more information about managing your student loan, we invite you to participate in the RBC Workshop on April 13th.