Emergency Debt Relief for Students
Updated: Mar 26, 2020
Canadian students with federal and provincial debt will be granted a 6 month payment hold period
Federal Student Debt Relief
During the period of March 30 to September 30, 2020, with regards to federal student debt:
No interest is payable by a borrower (the student) on a guaranteed student loan; and
No amount on account of principal and interest in respect of the guaranteed student loan is required to be paid by the borrower (the student).
Yesterday, the House of Commons passed emergency legislation, which includes amendments to the Canada Student Financial Assistance Act. The effect of this change is that Canadian students with federal debt will be granted a 6 month payment hold period from March 30, 2020 until September 30, 2020. Here's a copy of the section right out of the legislation:
Suspension of interest and payments
9.3 During the period that begins on March 30, 2020 and ends on September 30, 2020,
(a) no interest is payable by a borrower on a student loan prescribed by regulations made under paragraph 15(1)(j); and
(b) no amount on account of principal and interest in respect of a student loan prescribed by regulations made under paragraph 15(1)(j) is required to be paid by the borrower.
The federal legislation passed the House of Commons on March 24, and was ratified by the Senate on March 25.
The emergency legislation tabled by the federal government yesterday also includes the creation of a new Canada Emergency Response Benefit, which is a $2,000 benefit that applies to Canadians who have experienced an income loss due to COVID-19. Click here to see our other article for more information on the Canada Emergency Response Benefit.
Provincial Student Debt Relief
In its budget released on March 25, 2020 the Provincial Government indicated it would be "temporarily deferring loan payments and interest accrual for six months for Ontario Student Assistance Program (OSAP) borrowers to ease the financial burden on students during the COVID-19 outbreak."
When this six month temporary deferral will occur has not yet been released, although it is possible it will coincide with the federal deferral dates from March 30 - September 30.
The budget still requires approval from Queen's Park before taking effect.