Canada Student Loans Regulations (SOR/93-392)

Payment on Death or Disappearance

• 24 (1) Where the lender is entitled to payment pursuant to section 12 of the Act, the lender shall provide to the Minister, as the case may be,

  • (a) evidence of the death of the borrower; or

  • (b) evidence of the circumstances under which the borrower disappeared.

• (2) For the purposes of subsection 12(1) of the Act, the amount that the Minister shall pay to a lender in respect of a guaranteed student loan shall be the amount of the outstanding balance of principal and accrued interest payable by the borrower on the day of the borrower's death.

• (3) For the purposes of subsections 12(2) and (3) of the Act, the amount that the Minister shall pay to a lender in respect of a guaranteed student loan on any day after a borrower’s death or disappearance that the Minister may fix shall be equal to the amount of the outstanding balance of principal and accrued interest payable by the borrower on that day.

• (4) Where the rights of a lender against a borrower are terminated pursuant to section 12 of the Act, any security taken by the lender from the borrower with respect to the guaranteed student loan shall be transferred to the estate of the borrower.

Payment on Severe Permanent Disability

25 For the purposes of subsection 13(1) of the Act, severe permanent disability means any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment — or a functional limitation — that prevents a person from performing the daily activities necessary to participate in the labour force in a manner that is substantially gainful, as defined in section 68.1 of the Canada Pension Plan Regulations, and is expected to remain with the person for their expected life. 

26 For the purposes of subsection 13(1) of the Act, the prescribed information is

• (a) a statement signed by a responsible officer of a lender to which the borrower is indebted under the guaranteed student loan, that certifies the amount of principal outstanding on the loan at the time the statement is made, the rate of interest payable on the loan and the date from which such interest is accruing on the loan;

• (b) a statement signed by a qualified medical practitioner that the borrower suffers from a severe permanent disability; and

• (c) a statement signed by or on behalf of the borrower setting out the borrower’s income.

27 If, pursuant to subsection 13(1) of the Act, the Minister is satisfied that a borrower, by reason of a severe permanent disability, is or will never be able to repay a guaranteed student loan, the Minister shall notify

• (a) the borrower; and

• (b) any lender whose rights against the borrower terminate pursuant to that subsection.

Claim for Loss

• 28 (1) A claim by a lender against the Minister in respect of the amount of any loss sustained as a result of a guaranteed student loan shall be made

  • (a) where the rights of a lender against a borrower are terminated pursuant to section 12 of the Act, as soon as evidence of the death or disappearance of the borrower is obtained by the lender;

  • (b) where the rights of the lender against a borrower are terminated pursuant to section 13 of the Act, forthwith on receipt of a notice issued to the lender under paragraph 27(b);

  • (c) subject to subsections (2) and (3), if the borrower is in default in the payment of an instalment, fails to enter into a consolidated guaranteed student loan agreement as required by subsection 7(1) or (2) or fails to comply with subsection 24(3) of the Canada Student Financial Assistance Regulations, within the period beginning on the day that is three months after the day on which the default or failure began and ending 180 days after the day on which the default or failure began; and

  • (d) where the borrower makes a consumer proposal, files an assignment for the benefit of creditors or otherwise becomes subject to the Bankruptcy and Insolvency Act or any regulations made thereunder or any provincial law relating to the orderly payment of debts, within the period beginning on the day on which the consumer proposal is filed or the day on which the borrower files the assignment or otherwise becomes subject to such law, whichever is earliest, and ending 180 days after that day.

• (2) A lender may make a claim for loss after the period referred to in paragraph (1)(c) but, where it does so, the Minister shall not pay any uncollected earned interest that accrues after that period unless, before the expiration of that period, the lender has requested from the Minister and the Minister has authorized an extension of the time during which the lender is permitted to make a claim for loss.

• (3) The maximum extension of a period in respect of which the Minister may make an authorization at one time pursuant to subsection (2) is 180 days.

• (4) The amount of loss sustained by a lender as a result of a guaranteed student loan shall be determined by calculating the aggregate of

  • (a) the unpaid balance of the principal amount of the loan,

  • (b) the uncollected earned interest on the loan as of

    • (i) the day of the death of the borrower, where the rights of the lender against the borrower are terminated under subsection 12(1) of the Act,

    • (ii) such day after the death or disappearance of the borrower as the Minister may fix pursuant to subsection 12(2) of the Act, where the rights of the lender against the borrower are terminated under that subsection,

    • (iii) the day that is 20 days after the day on which a notice referred to in section 27 is sent to the lender, where the rights of the lender against the borrower are terminated under section 13 of the Act,

    • (iv) the day that is 30 days after the beginning of the period referred to in paragraph (1)(d), in the case of a claim made as a result of the circumstances referred to in that paragraph, or

    • (v) the day that is

      • (A) where a lender makes a claim for loss after the period referred to in paragraph (1)(c), 180 days after the day on which the borrower is in default in the payment of an instalment or fails to enter into a consolidated guaranteed student loan agreement, or is the day that is the last day of the extension authorized pursuant to subsection (2), and

      • (B) where a lender makes a claim for loss before the end of the period referred to in paragraph (1)(c), the day on which payment is approved by the Minister,

  • (c) any uncollected and assessed legal fees and disbursements actually incurred by the lender in relation to litigation concerning the collection or protection of the interests of the Minister, in respect of the loan, but not including legal fees and disbursements incurred for the purposes of obtaining a rectification of a guaranteed student loan agreement, and

  • (d) other reasonable disbursements actually incurred by the lender in collecting or endeavouring to collect the outstanding loan or in protecting the interests of the Minister.

  • (e) [Repealed, SOR/95-331, s. 14]

• (5) A claim for loss made in accordance with subsection (1) or 28.1(1) must be substantiated by all of the original documentation held by the lender in respect of the loan, including calculations or recalculations requested by the Minister in accordance with subsection 28.1(2), if any. If the claim for loss is not substantiated in that way, the amount calculated under subsection (4) or subsection 28.1(2) may be reduced by an amount equal to the interest accruing on the loan during the period

  • (a) where the Minister makes a request to the lender for calculations or recalculations in accordance with subsection 28.1(2), beginning on the date of that request and ending on the day on which the Minister receives those calculations or recalculations; and

  • (b) in any other case, beginning on the day on which the claim for loss was received by the Minister and ending on the day on which the Minister receives the required documents.

• 28.1 (1) If a claim for loss is not payable by the Minister pursuant to section 7 of the Act but an event described in subsection 28(1) has occurred, the amount of the loss payable pursuant to section 7.1 of the Act shall, subject to this section and section 28.2, be determined in accordance with subsection 28(4) where, in any consolidated guaranteed student loan agreement or any other guaranteed student loan agreement entered into under these Regulations,

  • (a) the rate of interest provided in the agreement,

    • (i) for the period described in subsection 14(1) or (2) or subsection 16.3(1) or (2), as the case may be, and for the class of loans identified therein, exceeds the maximum annual rate of interest prescribed by that subsection that was in effect during that period, or

    • (ii) for the period described in subsection 15(1) or (2), as the case may be, and for the class of loans identified therein, exceeds the maximum annual rate of interest prescribed by that subsection that was in effect on the day on which the agreement was entered into;

  • (b) the principal amount provided in the guaranteed student loan agreement does not equal the principal amount determined in accordance with the Act and any regulations made thereunder; or

  • (c) the amount of the instalments to be made by the borrower provided in the agreement would either result in an overpayment or not pay the loan in full by the terms thereof.

• (2) Where subsection (1) applies, the lender shall complete any calculations or recalculations under this section that are requested by the Minister.

• (3) For the purposes of subsection (1), the unpaid balance of the principal amount of the loan referred to in paragraph 28(4)(a) is the lesser of

  • (a) the unpaid balance of the principal amount of the loan calculated as if the event referred to in subsection (1) had not occurred, and

  • (b) the unpaid balance of the principal amount of the loan calculated in accordance with the guaranteed student loan agreement.

• (4) For the purposes of subsection (1), the rate of interest required for the calculation set out in paragraph 28(4)(b) shall be the lesser of

  • (a) the rate of interest provided in the guaranteed student loan agreement, and

  • (b) the rate of interest determined in accordance with subsection 15(1) or (2), as the case may be, in effect on the day on which the guaranteed student loan agreement was entered into.

• (5) The Minister shall not make a payment under section 7.1 of the Act unless the absolute value of the difference between the amount determined in accordance with paragraph (3)(b) and the amount determined in accordance with paragraph (3)(a) is less than or equal to $250.

• 28.11 (1) If a lender has two or more claims for loss each of which is a claim for loss that could be made in accordance with section 28 or 28.1, instead of making the claims individually, the lender may group the claims together and submit them to the Minister in an electronic format acceptable to the Minister.

• (2) If the claims are submitted in that way, the documentation required under subsection 28(5) to substantiate the claims is not required to be submitted with the claims.

• (3) After receiving the claims, the Minister shall compare the information contained in the claims with the information in the Minister's files.

• (4) The Minister may decide not to accept a claim that cannot be verified by that comparison. If a claim is not accepted, the Minister shall notify the lender that the claim has not been accepted and shall tell the lender why the claim has not been accepted.

• (5) After setting aside the claims that are not accepted, the Minister may pay the lender the remaining claims. The payment is to be considered an advance payment, subject to being adjusted after those remaining claims are audited.

• (6) The Minister shall choose a sample of those remaining claims and shall request the lender to provide the Minister with the documentation required under subsection 28(5) to substantiate the claims in the sample. In that request, the Minister shall set out the time within which the documentation shall be provided.

• (7) If the documentation required to substantiate a claim is not provided to the Minister within the requested time, the Minister may decide not to accept the claim.

• (8) If a claim in the sample is not substantiated by the documentation that is provided to the Minister or if a claim fails to meet any other requirement of these Regulations, the Minister may decide not to accept the claim.

• (9) If the Minister is of the opinion that too many of the claims in the sample are not substantiated by the documentation that is provided to the Minister or fail to meet any other requirement of these Regulations, the Minister may decide not to accept any of the claims that were the subject of the lender's request for payment.

• (10) If the Minister decides under subsection (7), (8) or (9) not to accept a claim, the Minister shall notify the lender that the claim has not been accepted and shall tell the lender why the claim has not been accepted. On the day that the notification is sent to the lender, the advance payment made by the Minister to the lender in respect of the claim becomes a debt due to Her Majesty.

• (11) After the audit is concluded, if the Minister finds that an amount remains owing to the lender in respect of the claims that have been accepted, the Minister may pay that amount to the lender. If, on the other hand, the Minister finds that the advance payment made to the lender in respect of the claims that have been accepted is more than the amount to which the lender was entitled in respect of those claims, the Minister shall notify the lender that the advance payment in respect of those claims was excessive and shall tell the lender why it was excessive. On the day that the notification is sent to the lender, the amount of the excess becomes a debt due to Her Majesty.

• 28.12 (1) If the Minister decides under subsection 28.11(4) not to accept a claim for loss, the claim may be resubmitted to the Minister in accordance with subsection 28(1) or 28.1(1) or section 28.11.

• (2) If the Minister decides under subsection 28.11(7), (8) or (9) not to accept a claim for loss, the claim may be resubmitted to the Minister only in accordance with subsection 28(1) or 28.1(1).

28.13 The Minister may at any time request a lender to produce the original documents for any claim for loss filed by the lender.

28.14 [Repealed, SOR/2005-152, s. 2]

• 28.2 (1) Notwithstanding anything in section 28, 28.1 or 28.11, the Minister shall not make a payment under section 7 or 7.1 of the Act if, on or before the applicable day referred to in subsection (2),

  • (a) the borrower has been released from the debt obligation, or any part thereof, resulting from the borrower's guaranteed student loan; or

  • (b) the borrower has a legal defence to an action, whether or not an action has been commenced, on the debt obligation, or any part thereof, resulting from the borrower's guaranteed student loan, or Her Majesty's ability to recover has otherwise been jeopardized.

• (2) For the purposes of subsection (1), the applicable day is

  • (a) the day on which the lender submits its claim for loss under section 28, 28.1 or 28.11, if no previous claim for loss has been submitted; or

  • (b) the day on which the lender submits its claim for loss under section 28.1 or 28.11, if the lender has previously submitted a claim for loss under section 28 before the coming into force of this section and that claim has been rejected by the Minister.

Recoveries

• 29 (1) Where the Minister makes a payment to a lender pursuant to section 7 of the Act in respect of any guaranteed student loan, the lender shall, on behalf of Her Majesty, take such reasonable steps as the Minister may require to collect due payments of principal and interest, to realize on any security and to otherwise effect collection of the loan.

• (2) The Minister may retain the services of any person or organization to take appropriate action on behalf of Her Majesty to collect due payments of principal and interest, to realize on any security and to otherwise effect collection of the loan.

• (3) Any amount collected on behalf of Her Majesty shall be remitted to the Minister.

• (4) The Minister may pay to a lender, pursuant to section 8 of the Act, an amount equal to 20 per cent of any amount collected by the lender on behalf of Her Majesty from a borrower.