Student Loan Key Terms

Delinquency/Default – You are considered a loan delinquent if you fail to make loan payments when they’re due. Extended loan delinquency eventually leads to loan default, in which you fail to repay your loan according to the agreed upon terms. Student loan delinquency and default can very negatively influence your credit score and credit history (affecting your ability to take out any other loans or types of credit in the future).

Entitlement – The amount of money you’re approved to receive as decided by the Government (when applying for a government student loan). Your entitlement is based on the information you provide on your loan application as well as information from the post-secondary school you’ll be attending and select verified third parties (like the CRA [Canada Revenue Agency]).

Fixed Rate – If you have a fixed interest rate on your loan, it means that it doesn’t fluctuate as time goes on (remaining stationary rather than going up or down). It allows you to accurately know how much you’re going to owe in the future.

Government Loan – if you apply for government funding in Canada, it’s composed of money from both the federal and provincial level (in most provinces). The money you end up paying back is the initial amount you borrowed plus any accrued interest.

The interest that adds up while you’re still in school (and for the first six months after graduation) is paid for by the government. This is called a grace period. Once that’s over (typically in November, if a student has graduated during the spring prior) you have to pay back the actual loan amount as well as the interest.

Each province has a different name for their system:

Ontario – OSAP (Ontario Student Assistance Program)

Saskatchewan – Saskatchewan Student Loans

British Columbia – StudentAid BC

New Brunswick – New Brunswick Student Financial Services

Newfoundland and Labrador – Newfoundland and Labrador Student Financial Services

Alberta – Student Aid Alberta

Nova Scotia – Nova Scotia Student Assistance

Manitoba – Manitoba Student Aid

Prince Edward Island – Prince Edward Island Student Financial Services

The Yukon – The Yukon doesn’t offer a territorial student loan program (but you still pay back any government loans you take out to the NSLSC)
Quebec, the Northwest Territories, and Nunavut don’t participate in the Canada Student Loans Program. Instead, Quebec’s system is called the Aide financiere aux etudes and those in the Northwest Territories apply for NWT Student Financial Assistance.

NSLSC – short for the National Student Loans Service Centre. They administer the student loans funded by the federal and/or provincial governments participating in the Canada Student Loans Program. They arrange for loans and grants to be deposited into your account, keep track of loan debt and repayment schedules, and are the ones to contact should you need assistance paying back your loan.

Prime Rate – the prime rate is the best and lowest interest rate available. With most government student loans, repayment is based on a mixture of the prime rate and either a fixed or variable/floating rate.

Principal – The outstanding balance of your loan without taking interest and other fees into consideration (though of course, they still have to be paid).

Repayment Assistance Plan (RAP) – This is one of the services offered by the NSLSC to help you manage your debt by lowering your monthly payments. Depending on your situation, you may not even have to make any payments. The plan lasts for six months, and you must apply for it yourself (the service is not automatic).

Revision of Terms – This is another service offered by the NSLSC to help you manage your debt. You can ask to change the terms of your loan depending on your situation (either by extending the terms of your loan temporarily or permanently, temporarily only making interest payments, or even paying more a month so you can pay your loan off faster). Visit the NSLSC site for more detailed information.

Variable or Floating rate – the opposite of a fixed interest rate. A variable or floating interest rate will fluctuate depending on the economy. It can be beneficial if it drops lower than the fixed rate, but it can also leave you paying through the nose if it goes up.