Canada Student Loans Regulations

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.