Short Title

1 These Regulations may be cited as the Canada Student Loans Regulations.

Interpretation

• 2 (1) In the Act and these Regulations,

  family income

  family income means the aggregate income of the borrower and the spouse or common-law partner of the borrower, including income from employment, social programs, investments and monetary gifts; (revenu familial)

  full-time student

  full-time student means a person

  • (a) who, during a confirmed period within a period of studies, is enrolled in courses that constitute

    • (i) at least 40 per cent and less than 60 per cent of a course load recognized by the specified educational institution as constituting a full course load, in the case of a person who has a permanent disability and elects to be considered as a full-time student, or

    • (ii) at least 60 per cent of a course load recognized by the specified educational institution as constituting a full course load, in any other case,

  • (b) whose primary occupation during the confirmed periods within that period of studies is the pursuit of studies in those courses, and

  • (c) who complies with the requirements of subsection 3(1); (étudiant à temps plein)

  part-time student

  part-time student means a person who, during a confirmed period within a period of studies, is enrolled in courses that constitute at least 20 per cent and less than 60 per cent of a course load recognized by the specified educational institution as constituting a full course load and, where that person has a permanent disability and is enrolled in at least 40 per cent of such a full course load, that person has elected to be considered as a part-time student; (étudiant à temps partiel)

  permanent disability

  permanent disability means a functional limitation caused by a physical or mental impairment that restricts the ability of a person to perform the daily activities necessary to participate in studies at a post-secondary school level or the labour force and is expected to remain with the person for the person's expected life; (invalidité permanente)

  responsible officer of a lender

  responsible officer of a lender means

  • (a) the manager or assistant manager of the lender or a branch thereof,

  • (b) the person for the time being acting as the manager or assistant manager of the lender or a branch thereof,

  • (c) the credit committee of the lender or a branch thereof, or

  • (d) such other person as may be authorized by the lender or a branch thereof to supervise the making of loans. (responsable de l'organisme prêteur)

• (2) In these Regulations,

  Act

  Act means the Canada Student Loans Act; (Loi)

  common-law partner

  common-law partner in relation to a borrower, means a person who is cohabiting with a borrower in a conjugal relationship, having so cohabited for a period of at least one year; (conjoint de fait)

  confirmation of enrolment

  confirmation of enrolment means a prescribed form, which may or may not form part of a certificate of eligibility, and where it does not, includes the borrower's social insurance number; (confirmation d'inscription)

  confirmed period

  confirmed period means a period of studies, or part thereof, that is at least six consecutive weeks and that

  • (a) in the case of a confirmation of enrolment forming part of a certificate of eligibility issued under the Canada Student Financial Assistance Act, begins on the first day of the month indicated by the specified educational institution and ends on the last day of the last month of the period of studies indicated by the appropriate authority,

  • (b) in the case of a confirmation of enrolment forming part of a certificate of eligibility issued under the Act, begins on the day on which that confirmation of enrolment is signed by the specified educational institution and ends on the last day of the last month of the period of studies indicated by the appropriate authority, and

  • (c) in the case of a confirmation of enrolment not forming part of a certificate of eligibility, begins on the first day of the month indicated by, and ends on the last day of the month indicated by, the specified educational institution; (période confirmée)

  consolidated guaranteed student loan agreement

  consolidated guaranteed student loan agreement means a contract that is entered into between a borrower who has ceased to be a full-time student pursuant to section 4.1 and the lender to whom the borrower is indebted under any outstanding guaranteed student loan agreements entered into as a full-time student, and

  • (a) that is in the prescribed form,

  • (b) that includes the borrower's social insurance number,

  • (c) in which the principal amount is the aggregate of the outstanding principal amounts under those agreements,

  • (d) that replaces those agreements, and

  • (e) that includes the provisions in respect of repayment of the principal amount of the loan and interest payable thereunder; (contrat de prêt garanti consolidé)

  course

  course means formal instruction or training that constitutes, or is determined by a specified educational institution to be equivalent to, an essential element of a program of studies at a post-secondary school level at that specified educational institution but does not include any formal instruction or practical training required for acceptance in a professional corporation or for the practice of any trade or profession, unless that formal instruction or practical training is necessary to obtain a degree, certificate or diploma from that specified educational institution; (cours)

  full-time guaranteed loan

  full-time guaranteed loan means a guaranteed student loan made to a full-time student; (prêt garanti à temps plein)

  guaranteed student loan agreement

  guaranteed student loan agreement means an agreement entered into in accordance with the Act and these Regulations and includes a consolidated guaranteed student loan agreement; (contrat de prêt garanti)

  loan agreement

  loan agreement has the same meaning as under the Canada Student Financial Assistance Regulations; (contrat de prêt)

  officer of the specified educational institution

  officer of the specified educational institution means a person authorized by a specified educational institution to sign confirmations of enrolment on behalf of the institution and who

  • (a) is the registrar of that institution or a person authorized by the registrar to act on behalf of the registrar,

  • (b) is a student aid officer in that institution, or

  • (c) has the de facto capacity of the registrar of or a student aid officer in that institution; (agent de l'établissement d'enseignement agréé)

  part-time guaranteed loan

  part-time guaranteed loan means a guaranteed student loan made to a part-time student; (prêt garanti à temps partiel)

  part-time guaranteed loan agreement

  part-time guaranteed loan agreement means, in respect of a part-time guaranteed loan, a contract entered into between a part-time student and a lender; (contrat de prêt garanti à temps partiel)

  risk-shared loan

  risk-shared loan has the same meaning as in the Canada Student Financial Assistance Regulations; (prêt à risque partagé)

  risk-shared loan agreement

  risk-shared loan agreement has the same meaning as in the Canada Student Financial Assistance Regulations; (contrat de prêt à risque partagé)

  spouse

  spouse[Repealed, SOR/2001-231, s. 1]

  student loan

  student loan has the same meaning as under the Canada Student Financial Assistance Regulations. (prêt d'études)

Continuation and Reinstatement

• 3 (1) Subject to section 9, a borrower shall, in order to continue to be or again become a full-time student,

  • (a) obtain, on a confirmation of enrolment, the signature of an officer of the specified educational institution at which the borrower is enrolled or the signature of the appropriate authority for the province in which that institution is located, where that institution has authorized that authority to act as an agent of that institution for such a purpose and has notified the Minister of that authorization;

  • (b) sign the consent and certification portion, which includes a statement to the effect that the borrower ratifies any guaranteed student loans made to the borrower while a minor, of the confirmation of enrolment;

  • (c) within 30 days after the signing of the confirmation of enrolment but before the end of the confirmed period, submit the confirmation of enrolment to the branch of the lender that holds the borrower's outstanding guaranteed student loans;

  • (d) pay to the lender any interest accrued to the day before the beginning of the confirmed period, where more than six months have elapsed between the day on which a borrower ceased to be a full-time student pursuant to section 4.1 and the beginning of the current confirmed period; and

  • (e) where the borrower submits the confirmation of enrolment later than six months after the day the borrower ceased to be a full-time student pursuant to section 4.1 but before the last day of the confirmed period that started within the six-month period, either

    • (i) pay to the lender any interest accrued from the day on which the borrower ceased to be a full-time student, or

    • (ii) enter into a consolidated guaranteed student loan agreement in which the unpaid accrued interest referred to in subparagraph (i) is added to the principal amount.

• (2) Where the borrower referred to in subsection (1) meets the requirements set out in that subsection,

  • (a) the borrower again becomes a full-time student on the day on which the borrower meets those requirements, where paragraph (1)(d) or (e) applies in respect of the borrower; and

  • (b) the borrower continues to be a full-time student on and after the day following the day on which the borrower would otherwise have ceased to be a full-time student, in any other case.

• (3) Where a borrower continues to be or again becomes a full-time student in accordance with subsection (2), the lender shall suspend the obligations of the borrower with respect to principal and interest

  • (a) subject to subsections 4(1) and (3) of the Act and section 15, in respect of any guaranteed student loan made and consolidated before August 1, 1993, for the period beginning on the applicable day referred to in subsection (2) and ending on the last day of the sixth month after the month in which the borrower again ceases to be a full-time student; and

  • (b) subject to subsections 4(2) and (4) of the Act and sections 14 and 15, in respect of any guaranteed student loan made before, on or after August 1, 1993 and consolidated after that date, for the period beginning on the applicable day referred to in subsection (2) and ending on the last day of the month in which the borrower again ceases to be a full-time student.

4 [Repealed, SOR/96-369, s. 2]

Ceasing to Be a Full-time Student

• 4.1 (1) Subject to paragraph 3(2)(b), a borrower ceases to be a full-time student on the earliest of

  • (a) the last day of the last confirmed period,

  • (b) the last day of the month in which the borrower no longer meets the applicable minimum percentage referred to in the definition "full-time student" in subsection 2(1), and

  • (c) the day on which the borrower's interest-free period is terminated in accordance with subsection 9(4).

• (2) Despite subsection (1), a borrower who is a member of the reserve force and who interrupts their program of studies to serve on a designated operation ceases to be a full-time student on the last day of the month in which their service on the designated operation ends. However, if, as a result of the date on which their service on the designated operation ends, the borrower is unable to continue in a program of studies within six months after that date, the Minister may, on application, delay by up to six months the date on which the borrower ceases to be a full-time student.

• (3) A borrower referred to in subsection (2) must, no later than 30 days after receipt of their posting message provided by the Department of National Defence unless circumstances beyond the control of the borrower necessitate a longer period, notify the Minister in the prescribed form that they will be serving on the designated operation and provide the Minister with

  • (a) their social insurance number;

  • (b) a list of their outstanding student loans, guaranteed student loans, provincial student loans with lenders and other provincial student loans;

  • (c) a copy of the posting message; and

  • (d) at the request of the Minister, any information that is necessary to enable the Minister to assess whether the borrower meets the requirements of subsection (2).

• (4) If a borrower referred to in subsection (2) is unable to continue full-time in a program of studies as a result of an injury or disease that was attributable to or was incurred during the designated operation or the aggravation of an injury or disease, if the aggravation was attributable to or was incurred during the designated operation, the borrower ceases to be a full-time student on the earlier of the day

  • (a) on which the Minister determines that the injury or disease, or the aggravation of the injury or disease, no longer precludes the borrower from returning to a program of studies; and

  • (b) that is 2 years after the day on which the borrower’s service on the designated operation ended.

• (5) The following definitions apply in this section:

  designated operation

  designated operation means an operation that is designated under paragraph 247.5(1)(a) of the Canada Labour Code; (opération désignée)

  reserve force

  reserve force has the same meaning as in subsection 2(1) of the National Defence Act. (force de réserve)

4.2 to 6 [Repealed, SOR/96-369, s. 4]

Consolidation

• 7 (1) Subject to subsection (2), the borrower of a full-time guaranteed loan shall, before the first day of the seventh month after the month in which the borrower ceases to be a full-time student, enter into a consolidated guaranteed student loan agreement with the lender to which the borrower is indebted.

• (2) Where a borrower who has entered into a consolidated guaranteed student loan agreement again becomes a full-time student and the borrower's obligations are suspended in accordance with subsection 3(3), the borrower shall, whether or not an additional full-time guaranteed loan is made to the borrower, before the first day of the seventh month after the month in which the borrower again ceases to be a full-time student, enter into a new consolidated guaranteed student loan agreement with the lender in place of the former consolidated guaranteed student loan agreement.

• (3) A consolidated guaranteed student loan agreement entered into in accordance with subsection (1) or (2) shall set out, in accordance with section 8, the principal amount of the loan and the period and frequency of the payments to be made to discharge that amount and the interest thereon calculated at the rate determined in accordance with sections 14 and 15 or sections 16.2 to 16.4, as the case may be.

• (4) Repayment provisions included in a consolidated guaranteed student loan agreement entered into in accordance with subsection (1) or (2) shall be consistent with the lender's standard practices in relation to unsecured consumer loans and shall take into account the borrower's capacity to pay instalments as they become due.

Guaranteed Student Loan Agreements and Alterations

• 8 (1) Every guaranteed student loan shall be repaid by instalments that

  • (a) repay, in accordance with subsection (3), the principal with interest, at the rate determined in accordance with sections 14 and 15 or sections 16.2 to 16.4, as the case may be; and

  • (b) are payable at least once every three months.

• (2) All instalments made pursuant to subsection (1) shall be applied first against the interest accrued to the date of payment and then to the principal outstanding.

• (3) Subject to subsection 19(2), the period of repayment,

  • (a) in respect of a full-time guaranteed loan, shall commence on the first day of the seventh month after the month in which the borrower ceases to be a full-time student; and

  • (b) in respect of a part-time guaranteed loan,

    • (i) shall commence on the day on which the borrower receives a disbursement under the loan agreement, and

    • (ii) shall not exceed 24 months.

• (4) Where a lender has reason to believe that a borrower is or will be unable to comply with the repayment provisions of a guaranteed student loan agreement, the lender shall, before the day on which the outstanding balance of the principal amount of the loan and any accrued interest becomes payable in accordance with paragraph 9(1)(a) or (b), offer to alter, with the consent of the borrower and in writing, the provisions of the agreement that relate to the period in which the loan is to be repaid and the frequency and the amount of the instalments.

• (5) Where an alteration is made to a guaranteed student loan agreement as a result of an offer to alter made pursuant to subsection (4) and the altered guaranteed student loan agreement remains in compliance with the Act and these Regulations, the alteration does not discharge the liability of the Minister to the lender under the Act.

• (6) [Repealed, SOR/96-369, s. 7]

• (7) The first of the instalments referred to in subsection (1) shall be payable by the borrower not earlier than

  • (a) in the case of a full-time guaranteed loan, the last day of the seventh month after the month in which the borrower ceases to be a full-time student; and

  • (b) in the case of a part-time guaranteed loan, one month after the day on which the borrower receives a disbursement under the loan agreement.

• (8) [Repealed, SOR/96-369, s. 7]

• (9) Nothing in these Regulations prevents the lender and the borrower of a part-time guaranteed loan from agreeing at any time to a repayment period that is shorter than the period specified in paragraph (3)(b).

• (10) Nothing in these Regulations prevents the borrower from paying, at any time to the lender, any amount of indebtedness with respect to a guaranteed student loan in addition to an instalment.

• (11) Any amount paid by or on behalf of the borrower pursuant to subsection (10) shall be applied first pro rata against interest accrued on the borrower's full-time guaranteed loans and risk-shared loans made to the borrower as a full-time student, then pro rata against the principal amount of those loans.

• (12) Where part or all of a payment referred to in subsection (11) is applied against the principal amount of a borrower's guaranteed student loans, it shall be applied first against the principal amount of guaranteed student loans to which subsection 4(1) or (3) of the Act applies and then against the principal amount of guaranteed student loans to which subsection 4(2) or (4) of the Act applies.

• 9 (1) Subject to subsection (8), the outstanding principal and any accrued interest in respect of a guaranteed student loan become payable

  • (a) where the borrower fails to enter into a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2) and the borrower does not fulfil the requirements of subsection 3(1) before a judgment is obtained against the borrower and such that the confirmed period on the confirmation of enrolment referred to in paragraph 3(1)(a) begins on or before the last day of the six-month period after the month in which the borrower ceased to be a full-time student, on the day following the last day of that six-month period;

  • (b) where the borrower fails to make a payment pursuant to the borrower's guaranteed student loan agreement or these Regulations and the borrower does not fulfil the requirements of subsection 3(1) before a judgment is obtained against the borrower and such that the confirmed period on the confirmation of enrolment referred to in paragraph 3(1)(a) begins on or before the day that is two months after the day of that failure, on the day following the last day of that two-month period;

  • (c) where the borrower makes an assignment under the Bankruptcy and Insolvency Act that is filed and not cancelled, is deemed under that Act to have made an assignment, or is the subject of a receiving order, on the earlier of the day on which a receiving order is made or the assignment is filed with the official receiver;

  • (d) if the borrower makes a proposal under Division I of Part III of the Bankruptcy and Insolvency Act that is approved by a court under that Act, on the day on which the proposal is approved;

  • (e) if the borrower makes a consumer proposal under Division II of Part III of the Bankruptcy and Insolvency Act that is approved or deemed approved by a court under that Act, on the day on which the consumer proposal is approved or deemed approved;

  • (f) if the borrower applies for a consolidation order under Part X of the Bankruptcy and Insolvency Act that includes a guaranteed student loan or a student loan, on the day on which the order is issued;

  • (g) where the borrower seeks relief under a provincial law relating to the orderly payment of debts, on the day on which the document seeking relief is filed;

  • (h) where the borrower is, by reason of the borrower's conduct in obtaining or repaying a guaranteed student loan or student loan, found guilty of an offence under any Act of Parliament, on the day of the finding of guilt;

  • (i) where the borrower fails to comply with paragraph 21.1(1)(c), on the last day of the period referred to in that paragraph;

  • (j) in the case provided in subsection 11(1), on the day on which the borrower ceases to be a full-time student pursuant to section 4.1; or

  • (k) if the borrower has been granted a reduction of the principal amount of a student loan or guaranteed student loan under section 42.1 of the Canada Student Financial Assistance Regulations, or of a risk-shared loan or a guaranteed student loan that entitled the borrower's lender to a gratuitous payment under section 30.1 of these Regulations or under section 42 of the Canada Student Financial Assistance Regulations, on the day on which the reduction is granted.

• (2) Where the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable pursuant to paragraph (1)(a) or (b), the lender may, without discharging the liability of the Minister to the lender under the Act,

  • (a) offer to alter, with the consent of the borrower and in writing, in accordance with subsection 8(4), any guaranteed student loan agreement or proposed guaranteed student loan agreement to facilitate the discharge by the borrower of the borrower's obligations; or

  • (b) effect collection of the outstanding balance of the principal amount of the guaranteed student loan and any accrued interest that is payable.

• (3) Subject to subsection (6), where the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable pursuant to paragraph (1)(a) or (b) and a claim for loss is paid to the lender by the Minister, the Minister shall, effective on the day of that payment,

  • (a) [Repealed, SOR/96-369, s. 8]

  • (b) refuse to grant an interest-free period in respect of all of the borrower's outstanding full-time guaranteed loans;

  • (c) terminate an interest-free period in respect of all of the borrower's outstanding full-time guaranteed loans; and

  • (d) refuse to grant the borrower a special interest-free period.

• (4) Subject to subsection (8), when the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable under any of paragraphs (1)(c) to (k), the Minister shall, effective on the day referred to in that paragraph, terminate an interest-free period in respect of all of the borrower's outstanding full-time guaranteed loans.

• (5) When the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable under paragraph (1)(h), (i) or (k), the Minister shall, in addition to the measures taken under subsections (3) and (4), terminate a special interest-free period granted to the borrower and refuse to grant another special interest-free period.

• (6) Where an event referred to in paragraph (1)(a) or (b) occurs in respect of a borrower's full-time guaranteed loan and, subsequent to that event, the borrower erroneously receives a certificate of eligibility under the Canada Student Financial Assistance Act and at least one disbursement on the basis of that certificate, the measure referred to in paragraph (3)(c) shall take effect on the last day of the period of studies for which that certificate was issued.

• (7) If an event referred to in any of paragraphs (1)(c) to (g) occurs, in respect of either a student loan or a guaranteed student loan made to a borrower as a full-time student, before the last day of the last confirmed period of the program of studies in which the borrower is enrolled at the time the event occurs, the borrower is entitled, if otherwise eligible, to a new student loan or an interest-free period for that program of studies.

• (8) If the borrower receives a new student loan or an interest-free period to which the borrower is entitled under subsection (7), the measures referred to in subsections (1) and (4) and subsection 15(2) of the Canada Student Financial Assistance Regulations take effect on the earliest of

  • (a) the last day of the last confirmed period of the program of studies in which the borrower was enrolled at the time the event occurred,

  • (b) the day that is three years after the occurrence of the event or, if that day occurs during a confirmed period, the last day of that period, and

  • (c) the last day of the month in which the borrower no longer meets the applicable minimum percentage referred to in the definition "full-time student" in subsection 2(1) of the Canada Student Financial Assistance Regulations.

Removal of Restrictions

• 10 (1) A borrower who has been the subject of a measure taken in accordance with subsection 9(3), (4) or (5) is entitled to an interest-free period or a special interest-free period if, on or after the earlier of the day referred to in paragraph 9(1)(a), (b) or (i) and the day on which the measure was taken,

  • (a) the borrower has fulfilled the requirements of section 16 of the Canada Student Financial Assistance Regulations in respect of the borrower's student loans, if any;

  • (b) an event referred to in paragraph 9(1)(h), (j) or (k) has not occurred in respect of the borrower's guaranteed student loans;

  • (c) a judgment has not been obtained against the borrower in respect of those loans; and

  • (d) the borrower has, in respect of the guaranteed student loan agreements, paid the interest accrued to a day and fulfilled the terms of a repayment arrangement entered into with the lender or with the Minister, as the case may be, that is no more onerous to the borrower than six consecutive payments subsequent to that day that are made in accordance with those agreements.

• (2) Where a borrower is subject to a measure taken in accordance with subsection 9(4) due to the occurrence of an event referred to in any of paragraphs 9(1)(c) to (g), the borrower has the rights referred to in subsection (1) if

  • (a) the borrower has fulfilled the requirements of section 16 of the Canada Student Financial Assistance Regulations in respect of the borrower's student loans, if any;

  • (b) an event referred to in paragraph 9(1)(h), (j) or (k) has not occurred in respect of the borrower's guaranteed student loans;

  • (c) the borrower has complied with paragraph (1)(d), in the case where the consumer proposal has been annulled or deemed annulled or the provincial law relating to the orderly payment of debts no longer applies to the borrower for a reason other than that the borrower's full compliance with that law and an event referred to in paragraph 9(1)(c), (d) or (f) has not occurred;

  • (d) in any case other than that referred to in paragraph (c), the borrower has not been released of the borrower's student loans and guaranteed student loans; and

  • (e) a judgment has not been obtained against the borrower in respect of those loans.

• (3) Where a borrower is subject to a measure under subsection 9(4) or (5) due to the occurrence of the event referred to in paragraph 9(1)(k), the borrower has the rights referred to in subsection (1) if the borrower has paid the outstanding balance of the guaranteed student loans.

Maximum Periods of Studies

• 11 (1) The principal amount of a full-time guaranteed loan, and any interest thereon, commence to be payable by the borrower on the last day of the seventh month after the month in which the borrower ceased to be a full-time student pursuant to section 4.1, where the number of periods of studies, calculated in weeks, on the applicable day referred to in that section and in accordance with subsection (2), exceeds 520 weeks.

• (2) For the purposes of subsection (1), the number of weeks is the aggregate of the number of weeks corresponding to the borrower’s confirmed periods as a full-time student, or the equivalent, under the Act and the Canada Student Financial Assistance Act, less the number of weeks determined by the Minister for which the specified educational institution has provided that the borrower, despite subsection 4.1(2), was no longer a full-time student.

Administration of Guaranteed Student Loans

• 12 (1) A borrower shall attend any meeting called to discuss the borrower's guaranteed student loan, where requested to do so by the lender or Her Majesty or her agents.

• (2) A borrower shall authorize the lender to exchange with consumer credit grantors, credit bureaus and credit reporting agencies information in relation to all guaranteed student loans of the borrower, in accordance with any laws applicable to unsecured loans to which the Act does not apply and which are in effect in a province in which the guaranteed student loan agreement is made, or in a province in which a lender to which the loan agreement is assigned is situated.

• (3) Lenders, appropriate authorities, specified educational institutions and the Minister shall collect, use and disclose any information and records necessary for the purposes of carrying out their powers and duties in accordance with the Act, these Regulations, the Canada Student Financial Assistance Act and any regulations made thereunder, and for the purposes of the administration and enforcement of those Acts and Regulations.

Applicable Interest Rates

Interest Rates Applicable to Lenders that are not Lenders Under the Canada Student Financial Assistance Act

12.1 Sections 13 to 16 apply in respect of guaranteed student loans that are held by a lender that is not also a lender as defined under the Canada Student Financial Assistance Act.

• 13 (1) For the purposes of this section and sections 14 and 16, the Class "A" rate of interest in effect on any day is the aggregate of one per cent and the rate fixed by the Minister for each loan year by calculating, immediately preceding the commencement of that loan year, the simple arithmetic mean of the mid-market yields at the close of business on Wednesday in respect of the six months immediately preceding the commencement of that loan year on all Government of Canada bonds payable in Canadian currency and due to mature in one to five years, as computed and provided by the Bank of Canada, rounded to the nearest one-eighth of one per cent.

• (2) For the purposes of section 15, the Class "B" rate of interest in effect on any day is the aggregate of one per cent and the rate fixed by the Minister for each loan year by calculating, immediately preceding the commencement of that loan year, the simple arithmetic mean of the mid-market yields at the close of business on Wednesday in respect of the six months immediately preceding the commencement of that loan year on all Government of Canada bonds payable in Canadian currency and due to mature in five to ten years as computed and provided by the Bank of Canada, rounded to the nearest one-eighth of one per cent.

• (3) The Minister shall forthwith notify the lenders, in such manner as the Minister sees fit, of the Class "A" and "B" rates of interest for a loan year as determined pursuant to subsections (1) and (2) and shall publish those rates of interest in the Canada Gazette.

• (4) Subject to subsection 14(4), subparagraph 20(3)(a)(ii), clause 21.1(2)(c)(i)(B) and subsection 21.1(3), the annual rate of interest applicable in any period for which the borrower or the Minister is liable to pay interest to a lender on a guaranteed student loan shall be calculated using simple interest.

• (5) and (6) [Repealed, SOR/95-331, s. 7]

• 14 (1) Whether or not the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), the annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subsection 4(2) or (4) of the Act applies is the Class "A" rate of interest in effect on that day, and is applicable for the period

  • (a) commencing on the first day of the month after the month in which the borrower ceased to be a full-time student, and

  • (b) ending on the earlier of

    • (i) the last day of the sixth month after the month in which the borrower ceased to be a full-time student, and

    • (ii) the day before the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2).

• (2) The annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subparagraph (1)(b)(ii) applies, is the rate of interest determined in accordance with subsection 15(1), and is applicable for the period

  • (a) commencing on the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), and

  • (b) ending on the last day of the sixth month after the month in which the borrower ceased to be a full-time student.

• (3) Subject to subsection (4), the aggregate amount of the interest accrued pursuant to subsections (1) and (2) shall become payable on the last day of the seventh month after the month in which the borrower ceased to be a full-time student.

• (4) Unless the borrower agrees to pay the aggregate amount of the interest accrued pursuant to subsections (1) and (2) on or before the day specified in subsection (3) together with the borrower's first instalment referred to in paragraph 8(7)(a), that interest shall be added to the principal amount of the full-time guaranteed loan on the first day of the seventh month after the month in which the borrower ceased to be a full-time student, and thereafter shall be treated as prescribed by subsection 15(1).

• (5) Nothing in this section shall be construed as preventing the lender and the borrower from agreeing to an annual rate of interest that is lower than the rate prescribed by subsections (1) and (2).

• 15 (1) The annual rate of interest payable by a borrower to a lender on all of the borrower's full-time guaranteed loans, including any interest added to the principal amount of all such loans pursuant to subsection 14(4), for the period commencing on the first day of the seventh month after the month in which the borrower ceased to be a full-time student, is the weighted average, rounded to the nearest one-eighth of one per cent, of

  • (a) the rate set out in the former consolidated guaranteed student loan agreement, where a guaranteed student loan agreement has been previously consolidated,

  • (b) such rate per annum as the lender and the borrower agree to on the day the lender and the borrower enter into a consolidated guaranteed student loan agreement, not greater than the Class "B" rate of interest in effect on that day, where an outstanding guaranteed student loan agreement has been entered into and has not been previously consolidated, and

  • (c) subject to paragraph (a), the Class "B" rate of interest in effect on the first day of the seventh month after the month in which the borrower ceased to be a full-time student, where there is an outstanding guaranteed student loan agreement and the borrower fails to enter into a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2).

• (2) The annual rate of interest payable by a borrower to a lender on a part-time guaranteed loan, for the period commencing on the day specified in subparagraph 8(3)(b)(i), is such rate per annum as the lender and the borrower agree to, which rate shall not be greater than the Class "B" rate of interest in effect on the day on which the lender and the borrower enter into the part-time guaranteed loan agreement.

• (3) Nothing in this section shall be construed as preventing the lender and the borrower from agreeing to an annual rate of interest that is lower than the maximum rate of interest prescribed by subsection (1) or (2).

16 The annual rate of interest payable by the Minister to a lender pursuant to section 6 of the Act on any day is the Class "A" rate of interest in effect on that day.

Interest Rates Applicable to Lenders under the Canada Student Financial Assistance Act

16.1 Sections 16.2 to 16.5 apply in respect of guaranteed student loans that are held by a lender that is also a lender as defined under the Canada Student Financial Assistance Act.

• 16.2 (1) For the purposes of this section and sections 16.3 to 16.5, the prime rate of interest means the rate of interest expressed as a rate per annum announced by the lender from time to time as the lender's reference rate of interest and used by the lender to determine interest rates charged for Canadian dollar demand commercial loans made by the lender in Canada.

• (2) For the purposes of sections 16.3 and 16.4, the maximum floating rate of interest shall be the prime rate of interest plus 250 basis points.

• (3) For the purposes of section 16.4, the maximum fixed rate of interest is the annual rate of interest set and earmarked by the lender in the ordinary course of business from time to time as the lender's prevailing unsecured consumer loan rate for the same repayment term as that agreed to by the borrower and the lender, not exceeding the prime rate of interest plus 500 basis points.

• 16.3 (1) Whether or not the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), the annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subsection 4(2) or (4) of the Act applies is the maximum floating rate of interest in effect on that day, and is applicable for the period

  • (a) commencing on the first day of the month after the month in which the borrower ceased to be a full-time student, and

  • (b) ending on the earlier of

    • (i) the last day of the sixth month after the month in which the borrower ceased to be a full-time student, and

    • (ii) the day before the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2).

• (2) The annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subparagraph (1)(b)(ii) applies is the rate of interest determined in accordance with subsection 16.4(1), and is applicable for the period

  • (a) commencing on the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), and

  • (b) ending on the last day of the sixth month after the month in which the borrower ceased to be a full-time student.

• (3) Subject to subsection (4), the aggregate amount of the interest accrued pursuant to subsections (1) and (2) shall become payable on the last day of the seventh month after the month in which the borrower ceased to be a full-time student.

• (4) Unless the borrower agrees to pay the full amount of the interest accrued pursuant to subsection (1) together with the borrower's first instalment referred to in paragraph 8(7)(a), that interest shall be added to the principal amount of the full-time guaranteed loan

  • (a) where the borrower enters into a consolidated guaranteed student loan agreement within the period referred to in subsection 7(1) or (2), on the day on which that agreement is entered into, and thereafter shall be treated as prescribed by section 16.4; or

  • (b) where the borrower fails to enter into a consolidated guaranteed student loan agreement within the period referred to in subsection 7(1) or (2), on the day after the end of that period, and thereafter shall be treated as prescribed by section 16.4.

• (5) Nothing in this section shall be construed as preventing the lender and the borrower from agreeing to an annual rate of interest that is lower than the rate prescribed by subsection (1) or (2).

• 16.4 (1) The annual rate of interest payable by a borrower to a lender on all of the borrower's full-time guaranteed loans, including any interest added to the principal amount of all such loans pursuant to subsection 16.3(4), for the period beginning on the first day of the seventh month after the month in which the borrower ceased to be a full-time student, is

  • (a) such rate per annum as the lender and the borrower agree to on the day on which the lender and the borrower enter into a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2), not greater than the maximum floating rate of interest in effect on that day, where the borrower chooses a floating rate of interest upon consolidation;

  • (b) such rate per annum as the lender and the borrower agree to on the day on which the lender and the borrower enter into a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2), not greater than the maximum fixed rate of interest in effect on that day, where the borrower chooses a fixed rate of interest upon consolidation; or

  • (c) the maximum floating rate of interest in effect on the first day of the seventh month after the month in which the borrower ceased to be a full-time student, where the borrower has an outstanding guaranteed student loan agreement and the borrower fails to enter into a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2).

• (1.1) Notwithstanding subsections (1) and 16.3(2), where a borrower enters into a consolidated guaranteed student loan agreement after the period referred to in subsection 7(1) or (2) or where the borrower and lender agree to revise the repayment provisions of a consolidated guaranteed student loan agreement entered into pursuant to subsection 7(1) or (2), the annual rate of interest payable by the borrower to a lender on all of the borrower's full-time guaranteed loans is

  • (a) such rate per annum as the lender and the borrower agree to on the day on which the lender and the borrower enter into a consolidated guaranteed student loan agreement or a revised consolidated guaranteed student loan agreement, not greater than the maximum floating rate of interest in effect on that day, where the borrower chooses a floating rate of interest; or

  • (b) such rate per annum as the lender and the borrower agree to on the day on which the lender and the borrower enter into a consolidated guaranteed student loan agreement or a revised consolidated guaranteed student loan agreement, not greater than the maximum fixed rate of interest in effect on that day, where the borrower chooses a fixed rate of interest.

• (2) The annual rate of interest payable by a borrower to a lender on a part-time guaranteed loan, for the period commencing on the day specified in subparagraph 8(3)(b)(i), is such rate per annum as the lender and the borrower agree to, not greater than the maximum floating rate of interest.

• (3) Nothing in this section shall be construed as preventing the lender and the borrower from agreeing to an annual rate of interest that is lower than the rate prescribed by subsection (1), (1.1) or (2).

16.5 The annual rate of interest payable by the Minister to a lender pursuant to section 6 of the Act on any day is the prime rate of interest in effect on that day.

Special Interest-Free Period

16.6 Sections 17 to 21.2 do not apply to a borrower who is indebted to the Minister under a direct loan made under the Canada Student Financial Assistance Regulations.

17 Subject to section 9, the Minister may grant a special interest-free period to a borrower if

• (a) the borrower resides in Canada;

• (b) the borrower has signed, in respect of

  • (i) full-time guaranteed loans, a consolidated guaranteed student loan agreement in accordance with subsection 7(1) or (2), and

  • (ii) part-time guaranteed loans, a part-time guaranteed loan agreement;

• (c) all of the risk-shared loan agreements and guaranteed student loan agreements referred to in paragraph (b) are held by a lender, or, in the case where an event referred to in any of paragraphs 9(1)(c) to (g) has occurred, by the Minister or a lender;

• (d) the borrower submits a duly completed application, in the prescribed form, for a special interest-free period in respect of all of that borrower's loans referred to in paragraph (b); and

• (e) the borrower’s monthly family income is equal to or less than the applicable amount indicated in Schedule 1 to the Canada Student Financial Assistance Regulations, taking into consideration

  • (i) the number of persons comprising the borrower, the borrower's spouse or common-law partner and their dependants, and

  • (ii) the total amount of all monthly instalments required from the borrower and, if applicable, the borrower's spouse or common-law partner, in accordance with their outstanding guaranteed loan agreements and loan agreements.

• (f) [Repealed, SOR/96-369, s. 16]

• 18 (1) [Repealed, SOR/2004-121, s. 6]

• (2) Subject to subsection (2.01), the aggregate of the special interest-free periods — including any special interest-free period in respect of which section 21.1 does not apply that has been granted to a borrower and for which the Minister paid interest under the Act or the Canada Student Financial Assistance Act or any regulations made under those Acts — shall not exceed 30 months.

• (2.01) If a borrower has already been granted 30 months of special interest-free periods, the Minister may, subject to subsection (2.02), grant the borrower further special interest-free periods if

  • (a) in the case of a guaranteed student loan with a repayment period of 15 years or more, the borrower is unable to make the instalment payments due; or

  • (b) in the case of a guaranteed student loan with a repayment period of less than 15 years, the borrower would not be able to make the instalment payments due even if the repayment period were extended to 15 years.

• (2.02) The Minister shall not grant a further special interest-free period if 60 months have elapsed since the day on which a borrower ceased to be a full-time student or a part-time student, as that day was identified in the borrower's first application for a special interest-free period.

• (2.1) For the purposes of subsections (2) to (2.02),

  • (a) where the aggregate of all special interest-free periods granted to the borrower under the Act and these Regulations before August 1, 1995 does not equal a complete number of months, the Minister shall not count the fraction of a month; and

  • (b) where the borrower's special interest-free period ends due to a circumstance referred to in paragraph 21.2(1)(a) or (c) or is terminated pursuant to section 21.1, the Minister shall count as a full month any part of a month for which the Minister paid interest to the lender due to that special interest-free period.

• (3) and (4) [Repealed, SOR/98-403, s. 2]

• 19 (1) A lender that holds a borrower's guaranteed student loan agreements may, pursuant to a prior written authorization from the Minister, exercise the powers and duties described in subsections 9(3) and (5) and section 17.

• (2) Where a lender is authorized in accordance with subsection (1), the Minister shall provide the lender such information as is necessary to enable the lender to act pursuant to that subsection.

• 20 (1) Where an application is made for a special interest-free period

  • (a) the lender, if authorized in accordance with subsection 19(1), shall, forthwith after making a decision in respect of the application, give notice of the decision to the borrower and the Minister; or

  • (b) the Minister, if a lender is not authorized in accordance with subsection 19(1), or if the borrower meets the criteria set out in subsection 21(1), shall, forthwith after making a decision in respect of the application, give notice of the decision to the borrower and to the lender that holds that borrower's guaranteed student loans.

• (2) The notice referred to in subsection (1) shall set out

  • (a) the day on which the special interest-free period begins, which day shall not be before the latest of

    • (i) the first day of the sixth month preceding the month in which the borrower applies for that special interest-free period,

    • (ii) in the case of a full-time guaranteed loan, the first day of the seventh month after the month in which the borrower ceased to be a full-time student under section 4.1,

    • (ii.1) in the case of a part-time guaranteed loan, the first day of the month following the month in which the borrower received that loan under the part-time guaranteed loan agreement, and

    • (iii) the first day of the month in which the borrower meets the criterion set out in paragraph 17(e);

  • (b) the day on which that special interest-free period ends which is the earlier of the day that is six months after the day determined in accordance with paragraph (a) and the first day of the month in which the borrower ceases to meet the conditions referred to in paragraph 17(e); and

  • (c) that the decision to grant the special interest-free period is subject to the condition set out in subsection (3).

• (3) A decision to grant a special interest-free period is subject to the condition that, where any accrued interest in respect of a guaranteed student loan remains unpaid on the day determined in accordance with paragraph (2)(a), the borrower shall, before the day determined in accordance with paragraph (2)(b),

  • (a) if the borrower has unpaid accrued interest under a consolidated guaranteed student loan agreement, pay to the lender or the Minister, as the case may be, all of that unpaid accrued interest;

  • (a.1) if the borrower has not previously done so, enter into a revised consolidated guaranteed student loan agreement, effective on the day determined in accordance with paragraph (2)(a), in which the unpaid interest accrued during the three-month period immediately before that day is added to the principal amount of the borrower's guaranteed student loan;

  • (a.2) pay to the lender or the Minister, as the case may be, any unpaid interest accrued before the three-month period referred to in paragraph (a.1); and

  • (b) if the borrower has unpaid interest accrued pursuant to a part-time guaranteed loan agreement, pay to the lender that unpaid accrued interest.

• 21 (1) The Minister shall reconsider a borrower's application for a special interest-free period if

  • (a) the borrower's application has been rejected for the sole reason that the borrower did not meet the criterion set out in paragraph 17(e);

  • (b) the borrower makes a request to the Minister in writing for that reconsideration; and

  • (c) the borrower provides documentary evidence that unforeseen and unavoidable circumstances beyond the control of the borrower and, if applicable, the borrower's spouse or common-law partner, have caused the borrower to incur exceptional expenses.

• (2) Where the Minister reconsiders an application in accordance with subsection (1), the Minister, after taking into consideration the value of the expenses referred to in paragraph (1)(c) and the monthly instalments referred to in subparagraph 17(e)(ii), shall make a decision and provide notice in accordance with section 20.

• 21.1 (1) Where the Minister determines that a special interest-free period was granted because of an error made by the borrower in applying for the special interest-free period or that the borrower's income no longer meets the criterion set out in paragraph 17(e),

  • (a) the Minister shall provide, to the borrower and the lender, a notice of that determination, specifying

    • (i) the date of the notice, and

    • (ii) the day on which the special interest-free period is terminated;

  • (b) forthwith after receiving the notice referred to in paragraph (a), the lender shall repay to the Minister any amount of interest paid by the Minister in respect of the period beginning on the day on which the special interest-free period is terminated; and

  • (c) the borrower shall, within 30 days after the date of the notice referred to in subparagraph (a)(i),

    • (i) in respect of the borrower's consolidated guaranteed student loan agreement, if any,

      • (A) pay to the lender any accrued interest payable, including any amount repaid by the lender in accordance with paragraph (b), or

      • (B) enter into a revised consolidated guaranteed student loan agreement in which the unpaid accrued interest on the day on which the borrower and the lender enter into that agreement, including any amount repaid by the lender in accordance with paragraph (b), is added to the principal amount of the borrower's guaranteed student loan, and

    • (ii) in respect of the borrower's part-time guaranteed loan agreement, pay to the lender any accrued interest payable, including any amount repaid by the lender in accordance with paragraph (b).

• (2) Where the borrower fails to comply with subparagraph (1)(c)(i), any unpaid accrued interest on the day that is 30 days after the date of the notice referred to in subparagraph (1)(a)(i), including any amount repaid by the lender in accordance with paragraph (1)(b), shall be added to the principal amount of the borrower's guaranteed student loan on the day following that day.

• 21.2 (1) Subject to subsection (2), where a special interest-free period has been granted to a borrower, the provisions of any guaranteed student loan agreement that was in effect between the borrower and the lender on the day on which the borrower applied for the special interest-free period shall be suspended until the earliest of

  • (a) the day on which the special interest-free period is terminated in accordance with section 9,

  • (b) the end of the special interest-free period, and

  • (c) in respect of the borrower's consolidated guaranteed student loan agreement, if any, the day on which the borrower again becomes a full-time student in accordance with subsection 4(2).

• (2) Where a special interest-free period has been granted to a borrower,

  • (a) subject to paragraph 21.1(2)(c), no interest and no amount on account of interest is payable by the borrower on the borrower's guaranteed student loans during or in respect of the special interest-free period;

  • (b) the Minister shall pay to the lender, in respect of the special interest-free period, interest at the annual rate determined in accordance with section 15 or 16.4, as the case may be;

  • (c) the first payment to be made by the borrower after the end of the special interest-free period shall be made one month after the end of that period; and

  • (d) the period of repayment of a part-time guaranteed loan may be extended beyond the applicable period determined under paragraph 8(3)(b) by a period not longer than the special interest-free period and, notwithstanding paragraph 7(e) of the Act, such extension does not discharge the Minister of liability under section 7 of the Act.

Misrepresentation

22 Where an appropriate authority or a lender has reason to believe that an application for a guaranteed student loan or for a certificate of eligibility or other document in respect of a guaranteed student loan contains a false statement or misrepresentation, the appropriate authority or lender shall forthwith report to the Minister any information in support of its belief.

Transfer or Assignment

• 23 (1) In this section and section 23.1,

  assignee lender

  assignee lender means a lender to which a borrower's outstanding guaranteed student loan agreements are assigned in accordance with this section; (prêteur cessionnaire)

  assignor lender

  assignor lender means a lender that assigns a borrower's outstanding guaranteed student loan agreements in accordance with this section. (prêteur cédant)

• (2) Subject to section 23.1, a borrower may request the assignment of all of the borrower's outstanding guaranteed student loan agreements if the following conditions are met:

  • (a) the borrower completes the prescribed form to request an assignment of guaranteed student loan agreements;

  • (b) the borrower submits the completed form to the assignor lender; and

  • (c) the assignee lender accepts the agreements to be assigned.

• (3) Where subsection (2) is complied with, the assignor lender shall sign the assignment agreement and forthwith send to the assignee lender the borrower's guaranteed student loan agreements and all other documentation in respect of those agreements.

• (4) Subject to subsection 23.1(3), on receipt of the agreements and other documentation referred to in subsection (3) and on verification that subsection 23.1(1) has been complied with, the assignee lender shall pay to the assignor lender an amount equal to the aggregate of the outstanding balance of the principal of the guaranteed student loans as of the day of the payment and any unpaid interest accrued on those loans to that day.

• (5) An assignment made in accordance with this section shall take effect on the day before the day of the payment referred to in subsection (4).

• (6) If the assignor lender cannot produce all or part of a document required by subsection (3) to be sent to the assignee lender, the assignor lender shall complete a summary of the disbursements that have been made under the borrower's guaranteed student loan agreements and shall send the summary to the assignee lender.

• (7) The summary must be completed in prescribed form and must include a statement of accounts.

• (8) The assignee lender shall ask the borrower to acknowledge the total value of the borrower's outstanding loan liability by signing the summary.

• (9) After the summary has been signed by the borrower, the summary shall, for the purposes of these Regulations, be treated as if it were the missing document or the missing part of the document.

• 23.1 (1) No assignment of guaranteed student loan agreements shall be made unless the borrower has

  • (a) complied with paragraphs 3(1)(d) and (e), if applicable to the borrower; or

  • (b) paid to the assignor lender all instalments required from the borrower in accordance with the borrower's guaranteed student loan agreements to the date of the request to assign, where none of the provisions referred to in paragraph (a) apply to the borrower.

• (2) Where a borrower has both outstanding guaranteed student loan agreements for which the Minister has not paid a claim for loss and outstanding risk-shared loan agreements, those agreements must be held by the same lender.

• (3) A lender that is not a lender under the Canada Student Financial Assistance Act may refuse to accept an assignment of a borrower's guaranteed loan agreements.

23.2 [Repealed, SOR/96-369, s. 24]

• 23.3 (1) For the purposes of this section,

  transferee branch

  transferee branch means a branch of the lender that holds a borrower's guaranteed student loan agreements that agrees to accept the borrower's outstanding guaranteed student loan agreements that are transferred in accordance with this section; (destinataire du transfert)

  transferor branch

  transferor branch means a branch of the lender that transfers a borrower's outstanding guaranteed student loan agreements in accordance with this section. (auteur du transfert)

• (2) A borrower may request the transfer of all of that borrower's outstanding guaranteed student loan agreements by

  • (a) completing the prescribed form to request a transfer of guaranteed student loan agreements; and

  • (b) submitting the completed form to the transferor branch.

• (3) Subject to subsection (5), if subsection (2) is complied with, the transferor branch shall without delay send to the transferee branch the signed originals of the borrower's guaranteed student loan agreements together with all other documentation in respect of those agreements.

• (4) The lender shall send to the borrower notice of completion of the transfer.

• (5) No transfer shall be made pursuant to this section unless the borrower has

  • (a) complied with paragraphs 3(1)(d) and (e), if applicable to the borrower; or

  • (b) paid to the transferor branch all instalments required from the borrower in accordance with the borrower's guaranteed student loan agreements to the date of the request to transfer, where none of the provisions referred to in paragraph (a) apply to the borrower.

23.4 A branch of a lender shall not, on its own initiative, transfer a borrower's outstanding guaranteed student loan agreements unless written notice of the transfer has been provided to the borrower.

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 subsection 12(2) of the Act, the amount that the Minister shall pay to a lender in respect of a guaranteed student loan on such day after a borrower's death or disappearance as the Minister may fix shall be 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 Permanent Disability

25 [Repealed, SOR/95-331, s. 13]

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 duly qualified medical practitioner that the borrower suffers from a permanent disability; and

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

27 Where, pursuant to subsection 13(1) of the Act, the Minister is satisfied that a borrower, by reason of permanent disability, is or will be unable to repay a guaranteed student loan without exceptional hardship, 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), where 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 paragraph 21.1(1)(c), 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.

Subrogation

• 30 (1) Notwithstanding subsections 28(2) and (5), where, under the Act or these Regulations, the Minister pays to a lender the amount of loss sustained by the lender as a result of a guaranteed student loan, Her Majesty is subrogated in and to all the rights of the lender in respect of the guaranteed student loan and, without limiting the generality of the foregoing, all rights and powers of the lender in respect of

  • (a) the guaranteed student loan,

  • (b) any judgment obtained by the lender in respect of the loan, and

  • (c) any security held by the lender for the repayment of the loan,

  are vested in Her Majesty and Her Majesty is entitled to exercise all the rights, powers and privileges that the lender had or may exercise in respect of the loan, judgment or security, including the right to commence or continue any action or proceeding, to execute any release, transfer, sale or assignment, or in any way collect, realize or enforce the loan, judgment or security.

• (2) Where the Minister pays a claim for loss pursuant to section 7.1 of the Act, the Minister shall be subrogated in and to all the rights of the lender in accordance with subsection (1) to the extent of the amount of the payment made to the lender under that section, including interest accrued and accruing from the applicable day referred to in paragraph 28(4)(b) at the rate of interest determined in accordance with subsection 28.1(4) and the amounts determined in accordance with paragraphs 28(4)(c) and (d).

Gratuitous Payments

• 30.1 (1) Subject to subsection 42.1 of the Canada Student Financial Assistance Regulations, if, on the application of a borrower, a lender has reduced, on a pro rata basis, the amount of the outstanding principal of all of the borrower's guaranteed student loans, the lender is entitled to a gratuitous payment by the Minister in respect of the reduction in an amount calculated in accordance with this section if, at the time the application for reduction was made,

  • (a) the borrower was not subject to a measure taken under subsections 9(3), (4) or (5) due to the occurrence of an event referred to in paragraph 9(1)(a), (b), (h) or (i);

  • (b) the borrower had ceased to be a full-time or part-time student at least 60 months before making the application;

  • (b.1) in respect of a borrower who had previously been granted a reduction in the principal amount of a student loan or a guaranteed student loan under section 42.1 of the Canada Student Financial Assistance Regulations, or a risk-shared loan or a guaranteed student loan that entitled the borrower's lender to a gratuitous payment under this section or section 42 of the Canada Student Financial Assistance Regulations,

    • (i) at least 12 months had elapsed since the day on which that previous reduction had been granted,

    • (ii) the borrower had ceased to be a full-time or part-time student at least 60 months before making the application,

    • (iii) the monthly payment made by the borrower after the last reduction in the principal amount of the student loan or guaranteed student loan was at least $25 unless the Minister concludes that the borrower, under a repayment arrangement entered into with the Minister or the lender, made a monthly payment of less than $25 on the basis that the borrower could not pay that amount owing to the borrower's family income, and

    • (iv) since the previous reduction was granted, an event referred to in paragraph 9(1)(a), (b), (h) or (i) has not occurred in respect of the borrower's student loans or guaranteed student loans;

  • (c) the borrower had been granted all of the special interest- free periods that may be granted;

  • (d) the borrower had not been granted more than two reductions in the principal amount of

    • (i) a guaranteed student loan or a risk-shared loan that entitled the lender to a gratuitous payment under this section or section 42 of the Canada Student Financial Assistance Regulations, or

    • (ii) a student loan or a guaranteed student loan under section 42.1 of the Canada Student Financial Assistance Regulations;

  • (e) the monthly payment on the guaranteed student loans was greater than the payment amount corresponding to the borrower's monthly family income as indicated in Schedule 2 to the Canada Student Financial Assistance Regulations; and

  • (f) the borrower resided in Canada.

• (2) Subject to subsection (4), the amount of the gratuitous payment shall be determined in accordance with the following formula, rounded to the nearest dollar:

  A × [1-(B/C)]

  where

  A

  is the principal amount owing in respect of the guaranteed student loans;

  B

  is the monthly payment corresponding to the borrower’s monthly family income — minus any monthly payment required for student loans or guaranteed student loans of the borrower's spouse or common-law partner — as indicated in Schedule 2 to the Canada Student Financial Assistance Regulations; and

  C

  is, in respect of a first reduction, the monthly payment due on the guaranteed student loans if the repayment period was 15 years.

• (3) In determining the amount of the gratuitous payment in respect of a second or third reduction, the monthly payment due on the loans as this amount is calculated in C of the formula set out in subsection (2) is based on the portion of the 15 year period remaining after the previous reduction.

• (4) The gratuitous payment shall not exceed

  • (a) $10,000, in the case of a first reduction in the principal amount of a student loan or a guaranteed student loan;

  • (b) $10,000, in the case of a second reduction in the principal amount of a student loan or a guaranteed student loan; or

  • (c) $6,000, in the case of a third reduction in the principal amount of a student loan or a guaranteed student loan.

• (5) [Repealed, SOR/2004-121, s. 8]

• (6) The Minister, on being notified of the reduction by the lender in the prescribed form, shall pay to the lender the amount of the gratuitous payment that has been calculated in accordance with this section.

Reconsideration

• 30.2 (1) The Minister may, on the request of the borrower, make a gratuitous payment to a lender when the criterion set out in paragraph 30.1(1)(e) has not been met if the Minister determines, based on documentary evidence provided by the borrower, that

  • (a) unforeseen and unavoidable circumstances beyond the control of the borrower or their spouse or common-law partner have led to the borrower incurring extraordinary expenses; and

  • (b) the borrower is able to make the instalments on the reduced debt.

• (2) The Minister shall provide a notice of the determination to the lender and the borrower.

31 and 32 [Repealed, SOR/96-369, s. 27]

Reports to the Minister

• 33 (1) Every lender shall furnish to the Minister

  • (a) within the 30 days next following the last day of March and the last day of July of each year, a report showing the total of all guaranteed student loans made by the lender that are outstanding at the end of those months; and

  • (b) as frequently as the Minister may require, copies of all documents relating to outstanding guaranteed student loans made by the lender.

• (2) The Minister may require an appropriate authority for a province to provide a copy of any document that was issued by or on behalf of that appropriate authority in connection with a guaranteed student loan.

• (3) The Minister may require an appropriate authority for a province, to account to the Minister, during July of each year, in a manner satisfactory to the Minister, for the number of certificates of eligibility that were issued by it during the previous loan year.

• (4) The Minister may require a lender or an appropriate authority for a province to furnish the Minister with any relevant information respecting guaranteed student loans authorized by the appropriate authority.