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Repayment assistance for student loan borrowers

The federal government has released a few additional details on the post-secondary education spending initiatives that were first announced in the 2008 budget. The release does not appear to have anything new on the Canada Student Grants; however, the details on the new Repayment Assistance Plan are news (to me at least):

In the 2009-2010 academic year, a new student loan Repayment Assistance Plan will be in place to make it easier for student loan borrowers to manage their debt by ensuring that they can afford their loan payments.

The Repayment Assistance Plan is an optional program for students facing difficulty in meeting their student loan payments including those with permanent disabilities. This new Plan will ensure that student loan payments will be affordable, that individuals with very low incomes will not be required to make payments and that the eligibility criteria will be easier to understand in order to obtain the support they need.

Loan payments will be based on the borrower’s income and debt levels. No more than 20 per cent of a borrower’s income would go towards the payment of the loan. Furthermore, no borrower will have a repayment period of more than 15 years.

The Repayment Assistance Plan replaces the Interest Relief and Debt Reduction in Repayment programs. Current Interest Relief and Debt Reduction recipients will transition into the new Repayment Assistance Plan.

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