National Student Loan Repayment Assistance Options
The federal government has created a number of options to help students who are struggling to repay their student loans. Here are the two programs that are available:
Term Revision
This option is similar to extending your student loan amortization in that it allows you to tweak your repayment plan if you are having trouble making your monthly payments. The typical amortization period for national student loans is 9.5 years. You can however make arrangements directly with the NSLSC to extend your amortization period up to 14.5 years, effectively reducing the amount of your monthly payment. Under the term revision program you also have the option to temporarily reduce your monthly payments. This means that you can reduce the amount that you pay each month for a short period of time and your amortization period will be adjusted automatically.
Repayment Assistance Plan
This option is a two stage process designed to help individuals who are unable to maintain their monthly student loan payments. The idea is that NSLSC and integrated student loans will not have a repayment term that exceeds 15 years, and no one should pay more than 20% of their monthly income towards their student loan. You must submit a formal application to be considered for this program. If you are eligible, then under stage one of the program you will continue to make an affordable payment each month (no more than 20% of your monthly income), and during this time period the government will pay the interest on your student loan. If after five years you are still struggling you may be eligible for stage two of the program. In this stage you will continue to make an affordable payment but the government will pay the difference between the affordable payment and the required payment to ensure that your loan has been paid in full within 15 years. To learn about this program or to apply for assistance, click here.