Canada Student Loans Regulations

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.