Students

Osap tips/advice/questions

Deal Addict
Feb 26, 2006
2044 posts
307 upvotes

Osap tips/advice/questions

Thanks to RandomSanity in another thread, its been brought to our attention that OSAP is changing their ways of repayment assistance.

Interest relief and Debt Reduction will be replaced with Repayment Assistance Plan (RAP)

You can read more about it here:
http://www.canlearn.ca/eng/after/repaym ... /rpp.shtml

Positives is that the program overall is more fair to everyone, basically everyone pays what they can afford. But on the same token, you gotta pay what they think is affordable (20% of income), no more not paying for 6 months at a time.

It is especially beneficial after the 5 year mark where basically the goverment helps you pay off the portion the you cannot afford.

Gov't is basically guaranteeing that you will be debt free after max of 15 years.

I still have some questions myself about it like how they verify a change in your status if you don't tell them (like you just got a new job), do they do an annual check with CRA, or how do they regulate this. Anyone with answers or material to add is welcome.

Ive created another thread to segregate the old system from the new.


Hm....getting old, maybe I should retire from the thread since the inside info ive collected from before no longer applies anymore... :(


EDIT: Thanks to Mysteek and other supporters of this thread (and the old one), I will ask for those found the threads helpful to nominate/vote for us for "Most Helpful Thread Nominations". And I say us because I obviously share this honor with CSK'sMom ^_~

http://www.redflagdeals.com/forums/show ... p?t=763768

Update: Good to see this thread is still being used =)
Last edited by BBQPorkBun on Jun 23rd, 2009 2:22 pm, edited 1 time in total.
7934 replies
Deal Addict
Dec 9, 2006
1274 posts
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[QUOTE]The province you have selected has not yet aligned with the proposed federal Repayment Assistance Plan (RAP). Therefore please enter the loan information for your Federal loan (your Canada Student Loan). If you do not know this amount because your loan is from an integrated province (Ontario, Saskatchewan, Newfoundland/Labrador or New Brunswick) then you can estimate the Federal portion of your loan total by entering 2/3rds of your total loan (e.g. multiply your total loan amount by 0.66).

What does this mean?

Different provinces and territories have different repayment assistance programs. You are asked to enter this information so that the tool generates the most accurate repayment assistance information possible.

Please note that Quebec, the North West Territories and Nunavut do not participate in the Federal system and therefore are not eligible for Federal repayment assistance programs. Please consult your provincial or territorial student loan web site to learn about their repayment assistance programs.[/QUOTE]

So what does this mean for us Ontarians? Does it mean there are both interest relief for the Ontario portion and the new system for the federal portion?
Deal Addict
Feb 26, 2006
2044 posts
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sunnyd71 wrote: So what does this mean for us Ontarians? Does it mean there are both interest relief for the Ontario portion and the new system for the federal portion?
good question, but when i see 'have yet to align' i would think its just a matter of time. i would think its costly and inefficient and unnecessary to maintain 2 systems
Member
Dec 11, 2006
413 posts
1 upvote
Scarborough
how does this affect students who are studying but not taking OSAP anymore and have some loan with them? (took OSAP 1st and 2nd yr)
Deal Expert
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Mar 27, 2007
15657 posts
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When is the deadline for OSAP applications?
Deal Expert
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Mar 27, 2007
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CSK'sMom wrote: If you were eligible for the QE Scholarship the deadline was June 19th. If you weren't there really isn't a deadline other than 30 days before your study period ends. Either way, the sooner the better.
Alright, thanks. Will probably do my application sometime this week or next week. I actually started an application back in April or March, but I found out it was for the 2008 year; didn't find out until the last minute.
Deal Addict
Mar 1, 2008
1201 posts
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Toronto
Might as well post my question here, no idea if I should post it on the Old thread haha. Oddly, when I went to apply for OSAP today I couldn't find my program o_o. Is it cause it's not there yet or something?
Deal Addict
Mar 1, 2008
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Toronto
CSK'sMom wrote: Is it a new program? Many of the schools have not yet updated OSAP with all the info needed. Things like tuition, book costs, etc. If it's a new program it may not show yet till the school get their updates into OSAP.
I don't think it's a new program, it's my second year into the Human Resources Management program w/ co-op at GBC. I guess I'll wait till next week and see if it's there~ Thanks! ^^
Deal Addict
Mar 1, 2008
1201 posts
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Toronto
LOL I'm sorry! I clicked on the 08-09 app T_T, I'm so stupid! Thanks for the help CSK :)
Deal Addict
Feb 26, 2006
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noxe2 wrote: how does this affect students who are studying but not taking OSAP anymore and have some loan with them? (took OSAP 1st and 2nd yr)
doesn't affect you, cuz you never had it the old school way. worry about it when you're done
Sr. Member
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Oct 20, 2007
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Is there a way to change the program you're in online? or would I have to call in and ask them to update my profile? I am switching to a program with a considerably higher tuition fee, if that helps.
Deal Addict
Dec 9, 2006
1274 posts
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So under the new repayment assistance program, is it that the government pays 100% of the interest and you make affordable payments strictly toward principle? I'm not entirely sure after reading about it on the website.
Deal Addict
Dec 9, 2006
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CSK'sMom wrote: Not quite from what I understand. Payments will be capped at 20% of your family income and the gov't will make the rest of your payment which may include principle and interest. If income is under $20k no payment in required at all. After 5 years on RAP (repayment assistance plan) principle starts to be forgiven. Repayment will also be capped at 15 years, 10 years if you have a permanent disability.
I thought so originally as well but then it mentions that your payment will go toward principal first.
For the first five years under the RAP, student loan borrowers who qualify will make affordable payments (or no payment) toward their loan principal. Paying the loan principal first reduces the total debt.
Deal Addict
Feb 26, 2006
2044 posts
307 upvotes
CSK'sMom wrote: Not quite from what I understand. Payments will be capped at 20% of your family income and the gov't will make the rest of your payment which may include principle and interest. If income is under $20k no payment in required at all. After 5 years on RAP (repayment assistance plan) principle starts to be forgiven. Repayment will also be capped at 15 years, 10 years if you have a permanent disability.
This is what I understand it to be, and please correct me if ive mistaken.

The example is monthly payment: 450 where 50 of that is interest (400 principle)

scenario 1 (first 5 years)
what osap calculates you can afford: 300
you pay 300 toward the 400, the 100 sits there, gov't pays the 50

scenario 2 (first 5 years)
what osap calculates you can afford: 450 (or higher)
you pay 450, of it 50 goes towards interest

scenario 3 (after 5th year)
what osap calculates you can afford: 300
you pay 300 toward the 400, gov't pays 150 to pay interest and lower principle

scenario 4 (after 5th year)
what osap calculates you can afford: 450 or higher
you pay 450, of it 50 goes towards interest
(same as scenario 2)
Deal Addict
Dec 9, 2006
1274 posts
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BBQPorkBun wrote: This is what I understand it to be, and please correct me if ive mistaken.

The example is monthly payment: 450 where 50 of that is interest (400 principle)

scenario 1 (first 5 years)
what osap calculates you can afford: 300
you pay 300 toward the 400, the 100 sits there, gov't pays the 50

scenario 2 (first 5 years)
what osap calculates you can afford: 450 (or higher)
you pay 450, of it 50 goes towards interest

scenario 3 (after 5th year)
what osap calculates you can afford: 300
you pay 300 toward the 400, gov't pays 150 to pay interest and lower principle

scenario 4 (after 5th year)
what osap calculates you can afford: 450 or higher
you pay 450, of it 50 goes towards interest
(same as scenario 2)
This is also how I understand it and believe this is exactly what CSKsMom was saying as well. As well, people with permanent disabilities are in stage 2 right away. (typically what happens after 5 years for other people.)

How does the 6 month grace period factor into this now? Is full interest still charged and added to principal for these 6 months and then you can join RAP? I would assume so since your payment is $0 for those 6 months.
Deal Addict
Feb 26, 2006
2044 posts
307 upvotes
sunnyd71 wrote: This is also how I understand it and believe this is exactly what CSKsMom was saying as well. As well, people with permanent disabilities are in stage 2 right away. (typically what happens after 5 years for other people.)

How does the 6 month grace period factor into this now? Is full interest still charged and added to principal for these 6 months and then you can join RAP? I would assume so since your payment is $0 for those 6 months.
good question, but i think unless osap says otherwise, we'd have to assume its the same, you can only get RAP in nov give you grad in april, and interest accumulates during grace period
Deal Addict
Feb 26, 2006
2044 posts
307 upvotes
CSK'sMom wrote: No to scenario 1 IMO. The gov't would be paying $150. Essentially RAP makes the whole difference in payment, not just the interest like the old interest relief program. They are saying that after 5 years principle forgiveness grants come into play but there is really nothing out there about that yet.

Ugh, I wish they would get some real info up about this other than nice little blurbs that look nice in print but don't tell us jack squat!
i don't think so CSK, or else whats the diff between first 5 years and after the 5th year?

from the gov't point of view they are saying, ok if u can only afford that much go ahead and pay that while i help with interest (similar to interest relief), but after 5 years if i see you still struggle, i'll help you with principle as well to guarantee you will be debt free later

Stage I: This stage applies to the first five years of the Plan.

* For the first five years under the RAP, student loan borrowers who qualify will make affordable payments (or no payment) toward their loan principal. Paying the loan principal first reduces the total debt. ($300)
* The Government of Canada will cover the interest amount owing that the borrower
Deal Addict
May 18, 2009
2541 posts
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Kitchener-Waterloo, …
I think BBQPorkBun has the right of it. I believe the government makes the interest payments on your behalf for the first 5 years. Only then do they begin to make any payments towards the principle.

It is essentially the same as the old system except open to a wider variety of people and based on a percentage of income (which increases in proportion of your income, it is not a fixed percentage) instead of a percentage of your loan amount.
Deal Addict
Feb 26, 2006
2044 posts
307 upvotes
CSK'sMom wrote: I dunno BBQ, look at the quote in post 20. They specifically say they will make the remainder of the payment, not just the interest. The RAF specifically replaces the outdated interest relief and debt relief programs. They are not supposed to work anything like the old programs. There is no way they can only make the interest payments while capping payment required and still limit the length of the loan to 15 years. After 5 years they are saying additional "more genous" principle reduction grants in addition. It's also my feeling that when/if one enrolls in AF their payments are going to change year to year. They will use their tax returns to adjust the payment yearly...
this is what i added to my previous post to address the term issue.

I know what you are saying in terms of they have to get to 0 balance by the end of 15 years. But I think what happens is at the 5 year mark and you enter stage 2, your monthly payment is recalculated and most likely increases if you haven't been paying all of your principle throughout the first 5 years.

so scenario is i make 19k and hence make 0 payments. my monthly payment is calculated to be 450, but can't afford it, hence my debt sits there and gov't pays interest for first 5 years (similar to IR). come the 5th year, monthly payment is recalculated to be 550, i still pay what i can, could be 0, and gov't pays the rest to ensure debt is 0 at the end of 15 years
Deal Addict
Feb 26, 2006
2044 posts
307 upvotes
Just adjusting my scenario to what I think happens, accounting for unpaid principle in first 5 years.

The example is monthly payment: 450 where 50 of that is interest (400 principle)

scenario 1 (first 5 years)
what osap calculates you can afford: 300
you pay 300 toward the 400, the 100 sits there, gov't pays the 50

scenario 2 (first 5 years)
what osap calculates you can afford: 450 (or higher)
you pay 450, of it 50 goes towards interest


After 5 years:
monthly payment has now become 480 because of unpaid principle to date where 30 (interest portion is less because you have been paying down principle up to this point) of that is interest (450 principle)

scenario 3 (after 5th year)
what osap calculates you can afford: 300
you pay 300 toward the 450, gov't pays 180 to pay interest and lower principle

scenario 4 (after 5th year)
what osap calculates you can afford: 480 or higher
you pay 480, of it 30 goes towards interest

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