O. Reg. 334/10: Ontario Student Loans made before August 1, 2001


Published: 2010-09-03

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ontario regulation 334/10

made under the

Ministry of Training, Colleges and Universities Act

Made: September 1, 2010
Filed: September 3, 2010
Published on e-Laws: September 7, 2010
Printed in The Ontario Gazette: September 18, 2010


Amending Reg. 774 of R.R.O. 1990

(Ontario Student Loans made before August 1, 2001)

1. Section 9.1 of Regulation 774 of the Revised Regulations of Ontario, 1990 is revoked.

2. (1) Subsections 9.2 (1) to (7) of the Regulation are revoked.

(2) Subsection 9.2 (7.1) of the Regulation is revoked.

(3) Subsection 9.2 (8) of the Regulation is revoked.

3. Sections 9.3 and 9.4 of the Regulation are revoked.

4. (1) Clauses 10 (5) (b) and (c) of the Regulation are revoked and the following substituted:

(b) refuse the borrower any repayment assistance under sections 12 to 12.12; or

(c) deny the borrower a reduction in the amount of principal outstanding under the consolidated student loan agreement under section 9.1 or 9.2.

(2) Subsection 10 (5) of the Regulation is amended by adding “or” at the end of clause (a), by striking out “or” at the end of clause (b) and by revoking clause (c).

5. Sections 12, 12.1, 12.2, 13, 13.1 and 13.2 of the Regulation are revoked and the following substituted:

Repayment Assistance Plan

Definitions

12. In this section and in sections 12.1 to 13, 

“federal student loan” means a loan made by the Government of Canada under the Canada Student Financial Assistance Act (Canada) or the Canada Student Loans Act (Canada);

“monthly affordable payment” means the amount that a borrower can reasonably afford to pay on all of his or her federal and provincial student loans on a monthly basis, as determined under section 12.5;

“monthly required payment” means the amount that a borrower would be required to pay on all of his or her federal and provincial student loans on a monthly basis, as determined under section 12.6;

“permanent disability” means a functional limitation caused by a physical or mental impairment that,

(a) restricts the ability of the person to perform the daily activities necessary to participate in studies at a postsecondary school level or in the labour force, and

(b) is expected to remain with the person for the duration of the person’s life;

“provincial student loan” means a student loan made under this Regulation or a loan made to a student for educational purposes by the government of a province other than Ontario or by the government of a territory of Canada;

“qualifying student” means a student or a borrower deemed to be a student under section 11 or 11.1.

Repayment assistance

12.1 (1) A borrower under a consolidated student loan agreement who is having difficulty paying amounts on principal and interest under the agreement may apply for repayment assistance in accordance with section 12.3.

(2) The repayment assistance available under this Regulation includes the following two forms of assistance:

1. A reduction in the borrower’s monthly payments on the student loans.

2. Assistance from the Minister in paying off the borrower’s outstanding student loans by making monthly payments on the loans.

(3) The amount of assistance provided by the Minister shall be determined so that,

(a) in the case of a person receiving repayment assistance other than a person described in clause (b), the recipient’s student loans are repaid in full within 15 years from the day the recipient last was a qualifying student; and

(b) in the case of a person with a permanent disability who is receiving repayment assistance and who, in an application for repayment assistance, discloses his or her disability, the recipient’s student loans are paid in full within 10 years from the day he or she last was a qualifying student.

(4) The assistance provided by the Minister to the borrower, whether by means of amounts paid to the bank on behalf of the borrower or by any other means, shall be deemed to be a grant made to the borrower under section 5 of the Act.

Two stages of repayment assistance

12.2 (1) There are two stages of repayment assistance provided under this Regulation:

1. Stage 1, known as the interest relief stage.  During this stage, the monthly assistance provided by the Minister shall consist solely of amounts payable on account of interest owing on the outstanding student loans.

2. Stage 2, known as the debt reduction stage.  During this stage, the monthly assistance provided by the Minister shall include such amounts payable on account of principal and interest owing on the outstanding student loans as are required so as to ensure that the student loans are repaid in full within the time period specified in subsection 12.1 (3).

(2) Subject to subsection (4), the two stages of repayment assistance are consecutive and a borrower must receive the interest relief stage of repayment assistance for the full period of time for which it is available under subsection (3) before he or she is entitled to receive the debt reduction stage of repayment assistance.

(3) A borrower may receive repayment assistance at the interest relief stage for a period of up to 60 months, subject to sections 12.11 and 12.12.

(4) A borrower who meets the eligibility requirements specified in subsection 12.4 (1) and in either paragraph 2 or 3 of subsection 12.4 (3) is eligible for repayment assistance at the debt reduction stage without having received the interest relief stage of repayment assistance for the full 60 months referred to in subsection (3).

Application and approval process

12.3 (1) A borrower who wishes to receive repayment assistance shall submit an application for the assistance to the bank to which amounts are owed under the consolidated student loan agreement.

(2) The application shall be in the form approved by the Minister and shall provide the bank with information relating to the applicant’s family status, number of family members and family income, and such other information as may be required to determine eligibility for the repayment assistance.

(3) If the bank determines that the applicant meets the eligibility requirements under sections 12.4, 12.5 and 12.6, the applicant shall be entitled to receive repayment assistance for a period of six months.

(4) If a borrower wishes to continue to receive repayment assistance immediately after the expiry of a repayment assistance period, he or she shall submit an application for the assistance to the bank no later than 30 days after the end of the six month period.

(5) Subsections (2), (3) and (4) apply with necessary modifications to every successive application for repayment assistance made under subsection (1) until the borrower’s student loans are repaid in full.

Eligibility requirements

12.4 (1) A borrower must meet the following requirements in order to be eligible for repayment assistance under this Regulation:

1. The borrower resides in Canada.

2. The borrower has submitted an application to the bank in accordance with section 12.3.

3. The borrower has entered into a consolidated student loan agreement.

4. The borrower is not ineligible under section 12.10 after failing to make the monthly payments in a previous repayment assistance period.

5. The borrower’s monthly affordable payment is less than his or her monthly required payment.

6. The borrower satisfies the eligibility requirements for the interest relief stage of repayment assistance described in subsection (2) or for the debt reduction stage of repayment assistance described in subsection (3).

(2) A borrower must meet all of the following requirements in order to be eligible for the interest relief stage of repayment assistance:

1. Since the borrower last was a qualifying student, he or she,

i. has not received any repayment assistance, or

ii. has received repayment assistance at the interest relief stage for a total period of time of less than 60 months.

2. Less than 10 years has elapsed since the borrower last was a qualifying student.

3. The borrower does not disclose a permanent disability in his or her application for repayment assistance.

(3) A borrower must meet at least one of the following requirements in order to be eligible for the debt reduction stage of repayment assistance:

1. Since the borrower last was a qualifying student, he or she has received repayment assistance at the interest relief stage for 60 months.

2. Ten years or more has elapsed since the borrower last was a qualifying student.

3. The borrower has a permanent disability and discloses, in an application for repayment assistance, his or her disability.

(4) Despite anything in this section, a borrower who meets the eligibility requirements in this section shall not be eligible for repayment assistance if the Minister,

(a) denies repayment assistance in accordance with subsection 10 (5); or

(b) has determined that the borrower is ineligible for repayment assistance for a period of time under subsection 13.3 (2).

Determination of monthly affordable payment

12.5 (1) For the purpose of determining whether a borrower meets the eligibility requirements of paragraph 5 of subsection 12.4 (1), the borrower’s monthly affordable payment shall be determined in accordance with this section, having regard to the number of persons in his or her family and to his or her family income.

(2) If a borrower’s monthly family income is equal to or less than the threshold amount set out in Column 2 to the Table to this subsection, opposite the number of members in the borrower’s family, the borrower’s monthly affordable payment shall be a nil amount.

Table
Threshold amount for Family Income

 


Column 1


Column 2




Number of Family Members


Threshold Amount




1


$1,684




2


$2,631




3


$3,399




4


$4,009




5 or more


$4,569




(3) If a borrower’s monthly family income is greater than the threshold amount set out in Column 2 to the Table to subsection (2), opposite the number of members in the borrower’s family, the amount of the borrower’s monthly affordable payment shall be equal to the lesser of,

(a) 20 per cent of the person’s monthly family income; and

(b) the portion of the person’s monthly family income obtained by multiplying that income by the following formula:



where,

A is the borrower’s family income,

B is the appropriate threshold amount set out in Column 2 to the Table to subsection (2) for a family with the number of members in the borrower’s family,

C is the monthly increment for a family with the number of members in the borrower’s family, as set out in the Table to this subsection.

Table
Monthly Increments

 


Column 1


Column 2




Number of Family Members


Monthly increment




1


$250




2


$350




3


$425




4


$500




5 or more


$575




(4) If the borrower has a spouse who has received federal or provincial student loans and has begun repayment of those loans as required under the Act or under the laws of the appropriate jurisdiction, the borrower’s monthly affordable payment as determined under subsection (3) shall be adjusted in accordance with the following formula:



where,

A is the borrower’s monthly affordable payment as determined under subsection (3),

B is the borrower’s total outstanding federal and provincial student loans,

C is the sum of the borrower’s total outstanding federal and provincial student loans and the spouse’s total outstanding federal and provincial student loans that are in repayment.

(5) In this section,

“family” means the borrower, his or her spouse, if any, and any person who is wholly dependent on either of them;

“family income” means the borrower’s gross income and that of his or her spouse, if any, from all sources less, in the case of a borrower with a permanent disability, any expenses related to the disability that are not covered by public health care or private insurance.

Determination of monthly required payment

12.6 (1) For the purpose of determining whether a borrower meets the eligibility requirements of paragraph 5 of subsection 12.4 (1), the borrower’s monthly required payment shall be equal to the monthly payment obtained by amortizing the amount of principal on all of his or her federal and provincial student loans outstanding at the time of the application for repayment assistance over the appropriate period of time determined under subsection (2) and using the interest rate determined under subsection (3).

(2) The amortization period used to determine a borrower’s monthly required payment shall be the greater of six months and one of the following periods of time:

1. In the case of a borrower who is applying for repayment assistance at the interest relief stage, the number of months obtained by,

i. subtracting the number of months since the borrower last was a qualifying student from 120 months, and

ii. adding the number of months that the borrower has previously received repayment assistance at the interest relief stage since the borrower last was a qualifying student, if any, to the difference obtained under subparagraph i.

2. In the case of a borrower applying for repayment assistance at the debt reduction stage, other than a person referred to in paragraph 3, the number of months obtained by subtracting the number of months since the date the borrower last was a qualifying student from 180 months.

3. In the case of a borrower with a permanent disability applying for repayment assistance at the debt reduction stage, the number of months obtained by subtracting the number of months since the date the borrower last was a qualifying student from 120 months.

(3) The rate of interest used to determine a borrower’s monthly required payment shall be equal to the average of the interest rates applicable to all of the borrower’s federal and provincial student loans, such average to be weighted based on the proportion of the borrower’s outstanding principal in each jurisdiction to the total amount of the borrower’s outstanding federal and provincial student loans.

Repayment assistance period

12.7 (1) If a borrower is granted repayment assistance, the six-month repayment assistance period shall commence at the beginning of the month in which the application for repayment assistance is submitted to the bank to which amounts are owed under the consolidated student loan agreement.

(2) Despite subsection (1), a bank may, at the request of an applicant, backdate the commencement of the repayment assistance period if the applicant has failed to pay the principal amount and any interest on his or her outstanding student loans during the months previous to his or her application for repayment assistance.

(3) The bank shall not backdate the commencement of the repayment assistance period by more than six months.

Suspension of repayment terms in agreement

12.8 (1) If a borrower is granted repayment assistance, then during the repayment assistance period,

(a) the terms of the repayment of the student loan set out in the borrower’s consolidated student loan agreement are suspended and of no effect; and

(b) instead of the payments required under the consolidated student loan agreement, payments shall be made each month on the borrower’s outstanding student loans by the borrower and the Minister in an amount equal to all or part of the Ontario portion of the borrower’s monthly required payment, as determined in accordance with section 12.9.

(2) At the end of the repayment assistance period, the suspension of repayment terms in the consolidated student loan agreement between the borrower and the bank in clause (1) (a) is lifted, subject to such amendments to the consolidated student loan agreement as may be agreed to by the parties.

(3) Subsection (2) does not apply if the borrower is granted a subsequent six month period of repayment assistance immediately upon the expiry of a previous repayment assistance period and the suspension of repayment terms is consequently extended.

(4) In this section and in section 12.9,

“Ontario portion” means, in relation to the monthly required payment or the monthly affordable payment, the portion of the payment proportional to the portion of all of the borrower’s federal and provincial student loans that is equal to the student loans issued under this Regulation.

Monthly payments during repayment assistance

12.9 (1) If a borrower is granted repayment assistance at the interest relief stage, the part of the Ontario portion of the borrower’s monthly required payment that is equal to the sum of the following amounts shall be paid each month on the borrower’s outstanding student loans:

1. The borrower shall pay to the bank the Ontario portion of his or her monthly affordable payment.

2. The Minister shall pay to the bank any interest payable as part of the Ontario portion of the borrower’s monthly required payment that is not paid by the borrower under paragraph 1.

(2) For greater certainty, during the interest relief stage of repayment assistance, any part of the Ontario portion of a borrower’s monthly required payment that is attributable to principal and not covered by the borrower’s payment under paragraph 1 of subsection (1) is not payable to the bank.

(3) If a borrower is granted repayment assistance at the debt reduction stage, all of the Ontario portion of the borrower’s monthly required payment shall be paid each month on the borrower’s outstanding student loans as follows:

1. The borrower shall pay to the bank the Ontario portion of his or her monthly affordable payment.

2. The Minister shall pay to the bank any part of the Ontario portion of the borrower’s monthly required payment, whether attributable to interest alone or to both principal and interest, that is not paid by the borrower under paragraph 1.

(4) A monthly payment made by the borrower under this section shall be paid to the bank each month at the same time as the monthly amounts otherwise payable under the consolidated student loan agreement would have been paid.

(5) Despite subsection 9 (3), a monthly payment made by the borrower under this section shall be applied by the bank against the borrower’s outstanding student loans as follows:

1. The full amount of the payment shall be applied first against the part of the Ontario portion of the monthly required payment that would be payable on the outstanding principal.

2. If the amount of the payment exceeds the amount of principal payable as part of the Ontario portion of the monthly required payment, the excess amount shall be applied against the interest payable as part of the Ontario portion of the monthly required payment.

(6) Despite anything in subsections (1) and (3), the Minister is not required to pay an amount under this section in respect of a month during a repayment assistance period if the borrower fails to make a payment as required under this section in respect of that month.

(7) If there is a conflict between a provision of a consolidated student loan agreement and this section, this section prevails.

Failure to make payments

12.10 (1) If a borrower fails to make one or more monthly payments that he or she is required to make during a repayment assistance period to a bank, the borrower shall pay all missed payments to the bank on or before 30 days after the end of the repayment assistance period.

(2) A borrower who fails to pay to the bank all the missed monthly payments as required under subsection (1) shall no longer be eligible for repayment assistance under this Regulation unless after the failure the borrower,

(a) pays all arrears of interest owing under the consolidated student loan agreement;

(b) makes at least six consecutive monthly payments under the consolidated student loan agreement; and

(c) is otherwise eligible for repayment assistance under section 12.4.

Return to school

12.11 If a borrower receives repayment assistance under this Regulation and subsequently returns to school and becomes a qualifying student once again, the repayment assistance received before the return to school shall not be considered for purposes of determining eligibility for any further repayment assistance that the borrower may apply to receive after completing the further period of study.

Transitional provisions

12.12 (1) This section applies to any application for repayment assistance under this Regulation made by a person whose payment obligations under a consolidated student loan agreement were suspended for a period of six months on one or more occasions under old section 12 or 12.1.

(2) In this section,

“new section” means a section in this Regulation as it reads on and after November 1, 2010;

“old section” means a section in this Regulation as it read on October 31, 2010.

(3) A person described in subsection (1) is eligible for repayment assistance under this Regulation if he or she meets the eligibility requirements under new sections 12.4, 12.5 and 12.6, subject to the following rules that apply for purposes of determining whether the person meets the eligibility requirements:

1. Any month during which the person’s payment obligations were suspended under old section 12 or 12.1 since the person last was a qualifying student is deemed to be a month during which the person received repayment assistance at the interest relief stage under the amended Regulation.

2. Any month during which the person’s payment obligations were suspended under old section 12 or 12.1 before the person last was a qualifying student is not relevant for the purposes of determining eligibility for repayment assistance under this Regulation.

Severe Permanent Disability Benefit

Severe permanent disability benefit

13. (1) In this section,

“severe permanent disability” means a permanent disability as defined under section 12 that is so severe that,

(a) it not only restricts but prevents a borrower from performing the daily activities necessary to participate in studies at a postsecondary school level and in the labour force; and

(b) the degree of functional limitation described in clause (a) is expected to remain with the person for the duration of their life.

(2) A person who has a severe permanent disability is entitled to have the outstanding amount on his or her student loans forgiven if he or she meets the following eligibility requirements:

1. The person is a Canadian citizen or is a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada).

2. The person resides in Canada.

3. The person has submitted an application to the Minister for the severe permanent disability benefit.

4. The person satisfies the Minister that, by reason of his or her severe permanent disability, the person is unable to repay the student loan and will never be able to do so.

(3) If a student loan issued under this Regulation is forgiven under this section, the Minister shall pay to the bank the full amount (principal and interest) outstanding on the loan.

6. (1) Paragraphs 2, 3 and 4 of subsection 13.3 (2) of the Regulation are revoked and the following substituted:

2. Repayment assistance under sections 12 to 12.12.

3. Severe permanent disability benefits under section 13.

(2) Subclause 13.3 (5) (b) (iii) of the Regulation is amended by striking out “section 9.1, 9.2 or 9.4” at the end and substituting “section 9.1 or 9.2”.

(3) Subclause 13.3 (5) (b) (iii) of the Regulation, as amended by subsection (2), is revoked and the following substituted:

(iii) The amount of any reduction of the amount of principal outstanding under a consolidated student loan agreement granted to the borrower under section 9.1 or 9.2, as those sections read on July 30, 2011.

(4) Clause 13.3 (5) (b) of the Regulation is amended by adding the following subclauses:

(iii.1) The amount of any assistance provided by the Minister as part of any repayment assistance granted to the borrower under sections 12 to 12.12.

(iii.2) The amount of any severe permanent disability benefit granted to the borrower under section 13.

(iii.3) The amount of any reduction of the amount of principal outstanding under a consolidated student loan agreement granted to the borrower under section 9.4, as that section read on October 31, 2010.

(5) Subclause 13.3 (5) (b) (iv) of the Regulation is amended by striking out “section 12, 12.1 or 12.2” and substituting “section 12, 12.1 or 12.2, as those sections read on October 31, 2010”.

(6) Subclause 13.3 (5) (b) (v) of the Regulation is amended by striking out “section 13.2” and substituting “section 13.2, as that section read on October 31, 2010”.

(7) Section 13.3 of the Regulation is amended by adding the following subsections:

(9) If the Minister makes a determination before November 1, 2010 that a borrower is ineligible for a specified period for any of the types of relief from repayment obligations under a consolidated student loan agreement referred to in paragraph 2 or 3 of subsection (2), as those paragraphs read on October 31, 2010, and if the specified ineligibility period is still in effect on November 1, 2010, then the borrower is deemed to be ineligible for repayment assistance under sections 12 to 12.12 for the remainder of the ineligibility period.

(10) If the Minister makes a determination before November 1, 2010 that a borrower is ineligible for a specified period for the relief from repayment obligations under a consolidated student loan agreement referred to in paragraph 4 of subsection (2), as that paragraph read on October 31, 2010, and if the specified ineligibility period is still in effect on November 1, 2010, then the borrower is deemed to be ineligible for the severe permanent disability benefit under section 13 for the remainder of the ineligibility period.

7. Subsection 16 (7) of the Regulation is revoked.

8. Subsection 25 (1) of the Regulation is amended by striking out “Student Support Branch” and substituting “Student Financial Assistance Branch”.

9. (1) Subject to subsection (2), this Regulation comes into force on the later of November 1, 2010 and the day it is filed.

(2) The following provisions come into force on July 31, 2011:

1. Section 1.

2. Subsections 2 (1) and (3).

3. Subsection 4 (2).

4. Subsection 6 (4).