Canada Student Financial Assistance Regulations

22.1 (1) Where an application is made for a special interest-free period in respect of a direct loan or a direct loan in combination with a risk-shared loan or a guaranteed student loan, the Minister shall, forthwith after making a decision in respect of the application, give notice of the decision

• (a) to the borrower when the application is made in respect of a direct loan, or

• (b) to the borrower and the lender when the application is made in respect of a direct loan in combination with a risk-shared loan or a guaranteed student loan.

(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 student loan made to a borrower as a full-time student, the first day of the seventh month after the month in which the borrower ceased to be a full-time student pursuant to section 8,

  • (ii.1) in the case of a student loan made to a borrower as a part-time student, the first day of the month following the month in which the borrower received that loan under the student loan agreement or direct student loan agreement, as the case may be, and

  • (iii) the first day of the month in which the borrower meets the criterion set out in paragraph 19(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 condition referred to in paragraph 19(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 the direct loan, the risk-shared loan or the guaranteed student loan remains unpaid on the day determined in accordance with paragraph (2)(a), the borrower shall, on or before the day determined in accordance with paragraph (2)(b),

• (a) if the borrower has unpaid accrued interest under a consolidated direct loan agreement, pay to the Minister all of that unpaid accrued interest;

• (a.1) if the borrower has not previously done so, enter into a revised consolidated direct 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 direct loan;

• (a.2) pay to the Minister 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 direct student loan agreement, pay to the Minister that unpaid accrued interest;

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

• (c.1) if the borrower has not previously done so, enter into a revised consolidated risk-shared 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 risk-shared loan;

• (c.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 (c.1); and

• (d) if the borrower has unpaid interest accrued pursuant to a student loan agreement, pay to the lender that unpaid accrued interest;

• (e) 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,

• (e.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;

• (e.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 (e.1); and

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