Canada Student Loans Regulations

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).