Canada Student Loans Regulations (SOR/93-392)

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.