Interest-free student loan grace period comes to Ontario - Macleans.ca
 

Interest-free student loan grace period comes to Ontario

Province overhauls OSAP


 

Beginning this year, Ontario graduates will have six interest-free months to start paying back their student loans after they complete their program, the province announced Monday.

The change is part of an overhaul of the Ontario Student Assistance Program (OSAP) that also promises to reduce the number of forms applicants have to fill out, and lower how much time students spend in line ups to get their loans. When students apply for OSAP, they will also be automatically considered for Student Access Guarantee funding.

According to a government media release, additional support will be provided for increased assistance for tuition, living costs, books, supplies and equipment, as well as for students with families. Students will also be able to retain more earnings from part-time work and a new grant for part-time students was also announced. The province says $81 million in new funding has been earmarked for student assistance.

The Canadian Federation of Students released a statement applauding the introduction of an interest-free repayment period, but argued that due to rising tuition, students will continue to face growing debt. “With these changes to OSAP, students graduating this December will have six worry-free months to find a job and start their careers, but current and future students can expect to struggle with more debt as rising tuition fees and loan amounts threaten to make their post-graduate burden significantly heavier,” the statement read.


 
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Interest-free student loan grace period comes to Ontario

  1. Has it not always been 6 months interest free?
    I have never completed a form for the student access grant, these were automatic?
    I am confused by this news release..

  2. There has long been a grace period for the federal portion of student loans. These changes would apply to the provincial portion in Ontario.

  3. This is stupid. Thanks for making forms shorter… how very Tony Clement of you. Ha!
    This does nothing to help the student. For shame!

  4. Would have loved to have had that grace period after my schooling ended in the spring. Amazing how much interest can accumulate in just 6 months on $15,000.

  5. The 6 month “grace period” is not interest free (federally and in other provinces), it is simply a time in which repayment is not yet required. Many students are confused about this and it should be interest free across the board in my humble opinion – either that or stop calling it a “grace period”. I hope others follow OSAP’s lead on this!

  6. Jeepers, the headline is incredibly misleading, this isn’t an interest free loan, loans will still be at the same rate they were at and still payable over 10 years, all they’re doing is adding a 6 month interest free period. I was really excited when I saw this heaadline on Twitter, but Maclean’s is just being goofy again, bummer.

    You know, lending tens of thousands of dollars to kids from low income families at prime +1/2/3 isn’t done much outside of Canada. In the US it’s two points below the going rate, in Australia it is a tax obligation rather than a debt, indexed to CPI. In the Philippines it is capped at 6%. Interest rates in the UK have historically been a lot lower than Canada: http://en.wikipedia.org/wiki/Student_loans_in_the_United_Kingdom#Interest_rates . In short, Canadian students have the worst deal of any student loan scheme in the world, it is killing us as a society, and I say that as a guy who typically Conservative.

    Boot the kids out of school who shouldn’t be there, introduce entrance exams so we get the best and brightest, and re-target money currently wasted on marignal Leisure Studies types towards fewer, better students, then we can afford to give them a break on student loans.

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  8. Another misleading contribution…
    the “grace period” is not a new initiative. Here’s a news flash…the majority of new grads with student loans won’t get a decent job for six months; therefore, gaining no ground on their debt before interest rates kick in.

    How about providing some additional funding for students that are now required to do grad school to get a half-decent job so eventually they can pay off their $30,000 undergrad debt? Get your shovel out students and keep on digging…

  9. Hey, you fixed the sketchy headline! Cool!