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Newfoundland and Labrador
Regulation 2004


NEWFOUNDLAND AND LABRADOR REGULATION 29/04

NEWFOUNDLAND AND LABRADOR
REGULATION 29/04

Student Financial Assistance Regulations (Amendment)
under the
Student Financial Assistance Act
(O.C. 2004-175)

(Filed April 5, 2004)

Under the authority of section 16 of the Student Financial Assistance Act, the Lieutenant-Governor in Council makes the following regulations.

Dated at St. John’s, March 30, 2004.

Robert C. Thompson
Clerk of the Executive Council

REGULATIONS

Analysis


        1.   S.2 Amdt.
Definitions

        2.   S.2.1 Added
Application

        3.   S.5 R&S
5.     Granting of student
        loan
5.1   Loan disbursement
5.2   Interest free status
5.3   Rules respecting
        interest free status
5.4   Notification
5.5   Required provisions
5.6   Amendment to prevent
        default
5.7   Student loan default
5.8   Consolidation and
        repayment
5.9   Obligation to pay
        interest
5.10 Application to
        pre-April, 2004 loans
5.11 Revision of terms

        4.   Ss.6 to 8 Amdt.
6.     Debt reduction grants
7.     Debt reduction
        calculations
8.     Loan remission

        5.   S.9 Amdt.
Early childhood education grants

        6.   S.10 Amdt.
Interest relief

        7.   S.12 Amdt.
Loan forgiveness due to disability

        8.   Sch. R&S

        9.   Commencement


NLR 105/03

        1. (1) Section 2 of the Student Financial Assistance Regulations is amended by adding immediately after paragraph (a) the following:

          (a.1)  "consolidated loan agreement" means an agreement entered into between a lender and a borrower to establish the terms and conditions of the repayment of the borrower's student loan;

             (2)  Paragraph 2(c) of the regulations is repealed.

             (3)  Section 2 of the regulations is amended by deleting the word "and" at the end of paragraph (g) and by adding immediately after paragraph (g) the following:

          (g.1)  "prime rate" means the variable reference rate of interest as calculated monthly by Canada’s Minister of Human Resources and Skills Development based upon the variable reference rates of interest declared by the largest 5 Canadian financial institutions as their rate for Canadian dollar consumer demand loans and the prime rate will be calculated by ignoring both the highest and the lowest of those 5 rates and taking the average of the remaining 3 rates;

             (4)  Section 2 of the regulations is amended by deleting the period at the end of paragraph (h) and substituting a semi-colon and the word "and" and by adding immediately after paragraph (h) the following:

              (i)  "service provider" means a person who has entered into an agreement with the minister or the corporation to provide services with respect to the disbursement, administration, management and recovery of student loans.

 

        2. The regulations are amended by adding immediately after section 2 the following:

Application

      2.1 These regulations apply to all student loans unless otherwise is expressly stated.

 

        3. Section 5 of the regulations is repealed and the following substituted:

Granting of student loan

        5. (1) A person to whom a certificate of eligibility has been issued shall

             (a)  have an appropriate official of the educational institution where that person is enrolled, confirm that person’s enrolment as a full time student on the certificate of eligibility;

             (b)  sign a student loan agreement in which he or she agrees to repay his or her student loan in accordance with the terms and conditions of that agreement and these regulations;

             (c)  sign those consents, authorizations and certificates that the minister may require; and

             (d)  submit the completed certificate of eligibility to the corporation or service provider within 30 days of the educational institution confirming full time enrolment and before the last day of the month of his or her period of study end date.

             (2)  Where a person complies with subsection (1), the corporation shall issue a student loan to that person in the amount set out in the certificate of eligibility.

Loan disbursement

      5.1 (1) The corporation or service provider shall not disburse a student loan before the borrower’s period of study start date or after the last day of the month of the borrower’s period of study end date.

             (2)  The corporation or service provider may, with the written approval of the minister, disburse a student loan that does not comply with subsection (1).

Interest free status

      5.2 (1) Where a student loan is issued to a borrower, that student loan has interest free status during the period

             (a)  commencing on the period of study start date indicated on the borrower’s certificate of eligibility; and

             (b)  ending on the last day of the month of the borrower’s period of study end date as indicated on his or her certificate of eligibility.

             (2)  If a student loan has an interest free status in accordance with these regulations, interest shall not accrue on that student loan during the period that the student loan has interest free status.

             (3)  A borrower who is not issued a student loan for a current period of study and

             (a)  who is enrolled in at least 60% of a full course load; or

             (b)  meets the requirements of subsection 3(4) of the Student Financial Assistance Administration Regulations,

may apply to the minister for interest free status on his or her student loan.

             (4)  An application under subsection (3) must include or be accompanied by the information that the minister may require.

             (5)  Where the minister receives an application under subsection (3), and is satisfied that the borrower has complied with these regulations, the minister may grant interest free status to the borrower’s student loan.

Rules respecting interest free status

      5.3 (1) If the period of study end date shown on a borrower’s application under subsection 5.2(3) changes to another date, his or her student loan interest free status ends on the last day of the month of the new period of study end date.

             (2)  Notwithstanding subsections 5.2(2) and (3) a borrower is not entitled to interest free status on his or her student loan if that borrower is in arrears on payments on his or her student loan.

             (3)  The minister may terminate an interest free status where

             (a)  the borrower to whom that status applies or his or her spouse, parent or sponsor has provided false or misleading information to the minister; or

             (b)  the borrower fails to comply with a provision of the Act or regulations made under the Act.

             (4)  Notwithstanding that the last day of the month of the period of study end date as stated on a certificate of eligibility or application made under subsection 5.2(3) has been reached, the student loan to which it applies retains its interest free status during the period between the previous period of study end date and the last day of the month of the next period of study end date as shown on the borrower’s current certificate of eligibility or application if

             (a)  the period between the last day of the month of the previous period of study end date and next period of study start date as shown on that borrower’s current certificate of eligibility or application is less than 6 months; and

             (b)  that borrower delivers the current certificate of eligibility or application made under subsection 5.2(3) to the minister within the 6 month period referred to in paragraph (a).

Notification

      5.4 A borrower shall  promptly notify the lender or service provider of any change in his or her

             (a)  marital or family status;

             (b)  status as a full time student at an educational institution;

             (c)  education costs for a period of study, and

             (d)  financial resources

that occurs during the period of study for which the student loan referred to in the student loan agreement is made.

Required provisions

      5.5 A student loan agreement made on or after April 1, 2004 shall include provisions that state the following:

             (a)  any refund of fees paid to an educational institution by the borrower from financial assistance provided under the Act shall be paid by the educational institution to the borrower’s lender for credit against a student loan received under the Act by the borrower;

             (b)  the borrower shall ratify all student loans made to him or her while he or she was a minor;

             (c)  interest on a student loan is payable before and after a default, acceleration or judgement with respect to that student loan; and

             (d)  the borrower shall pay all legal fees incurred by the lender to collect the student loan.

Amendment to prevent default

      5.6 A lender and a borrower may amend their consolidated loan agreement if the borrower notifies the lender that the terms of the agreement are such that he or she will be in default and if the lender considers that an amendment to the agreement will enable the borrower to meet his or her obligations under the agreement.

Student loan default

      5.7 (1) A borrower is in default of his or her obligation to repay a student loan if he or she refuses to repay all or a part of that loan or if he or she does not make a regularly scheduled payment and the failure to make the required payment continues for 2 months.

             (2)  Where a borrower is in default of his or her obligation to repay a student loan, the loan is due and payable on the date that is the earlier of the following dates:

             (a)  if the default occurs because the borrower refuses to repay all or a part of his or her student loan, on the first day that is at least 30 days after that refusal where a payment due on that student loan is at least 90 days in arrears; or

             (b)  if the default occurs because the borrower does not make a regularly scheduled payment to repay his or her student loan, on the day after the date on which a regularly scheduled payment has been outstanding for 2 consecutive months; or

             (c)  the date on which the borrower becomes subject to or takes advantage of a law relating to bankruptcy or insolvency.

Consolidation and repayment

      5.8 (1) A borrower who enters into one or more student loan agreements shall enter into a consolidated loan agreement with the lender after the borrower ceases to be a full time student.

             (2)  A consolidated loan agreement shall include the amount and duration of the payments to be made to discharge the principal amount of all outstanding student loans and the interest on the outstanding balance from time to time.

             (3)  If a borrower does not enter into a consolidated loan agreement within 6 months after ceasing to be a full time student, he or she shall be considered to have entered into a consolidated loan agreement and the lender shall establish the amount and duration of the payments to be made to discharge the principal amount of all outstanding student loans of that borrower and the interest on the outstanding balance from time to time unless the borrower subsequently enters into a consolidated loan agreement.

Obligation to pay interest

      5.9 (1) The interest rate in effect on any day on a student loan owned by the corporation shall be,

             (a)  the prime rate on that day plus 2.5 % yearly; or

             (b)  after consolidation of a student loan under section 5.8 and where requested by the borrower, the prime rate upon the date that the borrower made the request, plus 5% yearly.

             (2)  The interest rate on any day on a student loan not owned by the corporation shall be in accordance with the student loan agreement relating to that student loan.

             (3)  Interest on a student loan shall accrue commencing on the first day of the month following the last day on which the borrower under that student loan ceases to be a full time student.

             (4)  After consolidation of a student loan, interest on that loan shall accrue daily and shall be calculated monthly.

             (5)  Interest accruing on a student loan for 6 months immediately after interest commencement under subsection (3) shall accrue daily and be payable on the first day of the seventh month after interest commencement and where the interest amount is not paid as required, that amount shall be capitalized and form part of the principal owed on that student loan.

Application to pre-April, 2004 loans

   5.10 Section 5.8 and subsection 5.9(1) shall only apply to a student loan owned by the corporation that has not been consolidated or entered into repayment status before April 1, 2004, notwithstanding that contrary terms and conditions of a student loan agreement apply to that loan immediately before that date.

Revision of terms

   5.11 (1) Where, on April 1, 2004, a student loan owned by the corporation is in repayment status, the following terms and conditions shall be considered to apply to the student loan agreement applicable to that loan, notwithstanding contrary terms and conditions of that agreement immediately before April 1, 2004:

             (a)  interest payable shall be calculated based on the prime rate as defined in these regulations;

             (b)  the amortization period shall be adjusted as required to ensure that a borrower’s total monthly payment to repay his or her student loan and his or her direct loan under the federal Act is not greater than the sum of his or her monthly student loan payment and federal direct loan payment immediately before April 1, 2004;

             (c)  where a student loan has, immediately before April 1, 2004, a fixed interest rate and the borrower’s direct loan under the federal Act has a floating rate, the interest rate applicable to the student loan shall be a floating rate that is the prime rate plus 2.5% yearly;

             (d)  where a borrower has a student loan with a fixed interest rate and a direct loan under the federal Act with a fixed interest rate that is lower than the fixed interest rate applicable to his or her student loan, the interest rate on his or her student loan shall be reduced to match the fixed interest rate applicable to the borrower’s direct loan under the federal Act;

             (e)  the allocation and application of payments between a student loan and a direct loan under the federal Act shall be as agreed upon among the minister, the corporation and the Government of Canada; and

              (f)  monthly payments on a student loan shall be due and payable on the last day of each month.

             (2)  Paragraphs (1)(b) to (e) shall apply to a borrower’s student loan if that borrower has a direct loan under the federal Act.

             (3)  In this section, "direct loan" has the same meaning as under the federal Act.

             (4)  Subsections (1) and (2) shall cease to apply where a borrower enters into an agreement to revise the terms and conditions of his or her student loan agreement or consolidated loan agreement.

 

        4. Sections 6, 7 and 8 of the regulations are amended by adding immediately before the word "loan" wherever it occurs, the word "student".

 

        5. Subsections 9(1), (2) and (3) of the regulations are amended by adding immediately before the words "loan" and "loans" the word "student".

 

        6. (1) Subsection 10(1) of the regulations is amended by adding immediately before the word "loan" the word "student".

             (2)  Subsection 10(2) of the regulations is amended by deleting the word "consider" and substituting the words "include a consideration of".

             (3)  Subsections 10(3) and (4) of the regulations are amended by adding immediately before the word "loan" wherever it occurs, the word "student".

             (4)  Section 10 of the regulations is amended by adding immediately after subsection (4) the following:

             (5)  If a borrower fails to pay interest on a student loan, the minister may, as a condition of providing interest relief or other financial assistance, require the borrower to

             (a)  pay all or a part of the accrued interest owing on that student loan; or

             (b)  capitalize all or a part of the accrued interest owing on that student loan and that capitalized accrued interest shall form a part of the principal owed on that student loan.

             (6)  Where the minister grants interest relief under this section, the first payment on principal and interest owed on a student loan that the borrower must make is due within one month after the end of the interest relief period.

             (7)  The minister may terminate interest relief that he or she has granted where

             (a)  the borrower has provided false or misleading information to the minister; or

             (b)  the borrower fails to comply with a provision of the Act, regulations made under the Act or the borrower’s student loan agreement.

             (8)  Where, on April 1, 2004, a borrower’s loan under the federal Act is in interest relief status under that Act, an application shall be considered to have been made under subsection (1) with respect to that borrower’s student loan.

 

        7. Subsection 12(1) of the regulations is repealed and the following substituted:

Loan forgiveness due to disability

      12. (1) A borrower may apply to the minister to have his or her student loan removed from active recovery because he or she has a permanent disability that was acquired on the earlier of

             (a)  the date the borrower enters repayment status on his or her student loan; or

             (b)  the first day of the seventh month after his or her period of study end date.

 

        8. The Schedule to the regulations is repealed and the following substituted:

Schedule

Total Monthly Payments

(Please see below)

MONTHLY FAMILY INCOME (in dollars)

Number of Persons Comprising Borrower, Borrower's Spouse or Common-law Partner and Their Dependants

1

2

3

4

5

6

7

8

9

10

0 -  35

1,604

2,506

3,237

3,818

4,351

4,842

5,281

5,651

5,954

6,184

35.01 -  70

1,635

2,550

3,277

3,860

4,395

4,888

5,329

5,700

6,006

6,237

70.01 - 105

1,671

2,593

3,316

3,901

4,440

4,933

5,378

5,749

6,057

6,290

105.01 - 140

1,707

2,638

3,355

3,943

4,483

4,980

5,426

5,800

6,108

6,344

140.01 -  175

1,743

2,672

3,395

3,984

4,527

5,027

5,475

5,851

6,162

6,398

175.01 - 210

1,782

2,705

3,436

4,025

4,571

5,074

5,525

5,902

6,215

6,453

210.01 - 245

1,821

2,740

3,474

4,067

4,616

5,121

5,574

5,964

6,269

6,507

245.01 - 280

1,858

2,778

3,515

4,109

4,661

5,168

5,623

6,016

6,322

6,563

280.01 - 315

1,898

2,817

3,557

4,152

4,706

5,215

5,672

6,066

6,377

6,618

315.01 - 350

1,937

2,855

3,597

4,195

4,750

5,261

5,721

6,117

6,431

6,674

350.01 - 385

1,976

2,894

3,640

4,239

4,796

5,308

5,772

6,167

6,486

6,730

385.01 - 420

2,015

2,932

3,683

4,283

4,842

5,356

5,823

6,218

6,540

6,785

420.01 - 455

2,055

2,970

3,726

4,326

4,888

5,404

5,874

6,270

6,595

6,842

455.01 - 490

2,096

3,009

3,768

4,370

4,932

5,452

5,927

6,322

6,649

6,899

490.01 - 525

2,139

3,048

3,811

4,413

4,978

5,500

5,979

6,377

6,705

6,955

525.01 - 560

2,180

3,086

3,854

4,458

5,025

5,549

6,031

6,431

6,760

7,012

560.01 - 595

2,223

3,124

3,897

4,502

5,072

5,598

6,082

6,486

6,816

7,070

595.01 - 630

2,265

3,161

3,939

4,545

5,119

5,648

6,135

6,540

6,871

7,128

630.01 - 665

2,308

3,200

3,983

4,589

5,167

5,697

6,187

6,595

6,928

7,185

665.01 - 700

2,351

3,239

4,025

4,634

5,213

5,748

6,240

6,649

6,985

7,244

700.01 - 735

2,395

3,279

4,068

4,678

5,261

5,798

6,294

6,705

7,041

7,303

735.01 - 770

2,441

3,318

4,110

4,723

5,309

5,848

6,347

6,760

7,099

7,362

770.01 - 805

2,486

3,357

4,154

4,768

5,357

5,899

6,400

6,816

7,157

7,421

805.01 - 840

2,533

3,396

4,197

4,813

5,405

5,950

6,454

6,871

7,215

7,481

840.01 - 875

2,580

3,436

4,239

4,859

5,453

6,003

6,507

6,927

7,272

7,541

875.01 - 910

2,628

3,475

4,283

4,905

5,502

6,054

6,562

6,984

7,331

7,601

910.01 - 945

2,661

3,515

4,325

4,951

5,551

6,106

6,616

7,040

7,390

7,661

945.01 - 980

2,692

3,556

4,368

4,998

5,600

6,160

6,671

7,097

7,449

7,722

980.01 - 1015

2,725

3,597

4,410

5,043

5,651

6,213

6,725

7,154

7,508

7,783

1015.01 - 1050

2,763

3,637

4,454

5,090

5,701

6,268

6,781

7,210

7,568

7,844

1050.01 - 1085

2,801

3,679

4,496

5,136

5,750

6,322

6,836

7,268

7,628

7,906

1085.01 - 1120

2,839

3,720

4,539

5,184

5,800

6,377

6,892

7,326

7,688

7,968

1120.01 - 1155

2,878

3,763

4,582

5,232

5,851

6,431

6,948

7,385

7,749

8,030

1155.01 - 1190

2,916

3,805

4,625

5,280

5,902

6,486

7,003

7,444

7,810

8,103

1190.01 - 1225

2,954

3,847

4,667

5,328

5,954

6,540

7,059

7,502

7,871

8,165

1225.01 - 1260

2,992

3,886

4,710

5,376

6,006

6,596

7,114

7,562

7,932

8,228

1260.01 - 1295

3,030

3,925

4,753

5,424

6,058

6,651

7,171

7,622

7,993

8,292

1295.01 - 1330

3,069

3,967

4,796

5,472

6,111

6,707

7,228

7,682

8,055

8,355

1330.01 - 1365

3,109

4,009

4,839

5,520

6,163

6,763

7,284

7,742

8,117

8,419

1365.01 - 1400

3,148

4,052

4,882

5,568

6,215

6,820

7,341

7,802

8,179

8,483

Commencement

        9. These regulations shall be considered to have come into force on April 1, 2004.