WoodGreen Community Services: Financial Literacy

Topic: OSAP 101

Presenter: GARY CONWAY

WoodGren Community Services

PLEASE KEEP IN MIND

o This information can be accessed by the general public and can be found on various trusted websites.

o Financial Literacy presenters are volunteers who provide general information, not personal advice. Clients are requested to be careful to make their own decision based on his/her situation.

o WoodGreen is not responsible for any repercussions that may come about from an individual acting upon the information presented.

o Please respect other viewpoints.

Welcome Ryerson

Students!

Financial Literacy Series:Tuesday March 3rd : OSAP 101

• Wednesday March 4th: Budgeting

• Monday March 9th: Banking

• Wednesday March 11th : Tax 101

LOCATION:RYERSON STUDENT CENTER - THOMAS LOUNGE

Agenda• OSAP Overview

– Program Overview– Eligibility – Application Process– Funding level– Appeals

• OSAP Repayment – National Student Loan Service Centre– Consolidation Letter– Loan Repayment terms– Repayment difficulties– Repayment Assistance Plan– Revised payment terms– Loan Rehabilitation– OSAP and bankruptcy

What is OSAP?• Ontario Student Assistance Program

• A series of federally and provincially funded needs-based loans, grants and bursaries provided to eligible students enrolled in post-secondary studies

• A supplement to existing personal, spousal or parental financial resources (where applicable)

• Apply Early! The OSAP application is available online at osap.gov.on.ca

What is OSAP?

Loans GrantsCanada Ontario Integrated Student Loan

Canada Student Grant for Persons with Permanent Disability

Ontario Student Loan Rehabilitation ProgramCanada Student Grant for Persons with Low Income

Families

Repayment Assistance Program Canada Student Grant for Persons with Dependants

  Child Care Bursary

  Continuation of Interest Free Status

  Living and Learning Grant

 One Year OSAP Grace Period for Entrepreneurs / Not for

Profit

  Ontario 30% Off Tuition

  Ontario Access Grant

  Ontario Distance Grant

  Ontario Graduate Scholarship

  Ontario Student Opportunity Grant

Assessed for all programs with one OSAP application

What is OSAP?

• Funds disbursed, via direct deposit, through National Student Loans Service Centre (NSLSC).

• Two instalments: 60% for fall session, 40% for winter.

• Loans re-payments begin 6 months after studies completed.

• No interest charged on loans during study period.

Who’s Eligible?• Attending a designated post secondary

institution

• Demonstrated financial need

• Enrolled in a degree, diploma, or certificate program at a that is 12 weeks or longer

• Canadian Citizen, permanent resident or protected person for Canada portion of OSAP

• Ontario resident for Ontario portion of OSAP

• 60% full-course load (full-time) or 20-59% (part-time) in each term of study

Application Process

Funding Determination

Minus equals

Tuition, Compulsory Fees Student IncomeBooks and Supplies Student AssetsEquipment Parental IncomeComputer Costs Spouse IncomeLiving Allowance Spouse AssetsChild CareTravel

Federal Assistance(60% of assessed need subject to maximum)

Provincial Assistance(40% of assessed need subject to maximum)

Allowable Educational

Costs

Expected Financial

Contribution

Assessed Financial

Need

Maximum Assistance• Assessed financial need limited to maximum

based on personal status

Factors affecting funding• Factors used when determining value of

each element include:

• Program of study and length of study period

• Personal status

• Living arrangements

• Financial circumstances

OSAP Assessment

McLaren, Jordan “It’s Complicated - An Interprovincial Comparison of Student Financial Aid”, Canadian Centre for Policy Alternatives (July 2014)

Expected Contribution• All students are expected to contribute

based on income earned (or assumed) during pre-study period and value of any financial assets and vehicles

• If married, spouse expected to contribute based on annual earned income and value of financial assets and vehicles

• If dependent, parents expected to contribute based on annual earned income

Assesses financial need

• Based on the assessed financial need, typically 60% is funded by Canada, 40% by Ontario

• Grants and bursaries will be applied first to fund assessed need

• Loans will be issued to cover any remaining assessed financial need

Maintaining Eligibility

• Minimum 60% course load (40% course load for students with permanent disabilities) for each term of study

• Good academic standing

• Personal and financial circumstances don’t change

Overpayments• Changing course load – especially below

60%

• Misrepresent or underestimate income (income verified with CRA)

• Misreported or change in assets / vehicles

• Overpayments not deducted from future OSAP funds

• Second and subsequent overpayments must be repaid prior to obtaining future OSAP funding

Appeals• Check with Financial Aid Office for valid

grounds

• Income level changes

• Living Arrangements

• Family breakdown

• Credit check

• Academic progress

Break Time!

VIDEOOSAP Repayment

https://www.youtube.com/watch?v=1POAGCvFtbQ

National Student Loan Service • NSLSC responsible for collecting both

Canada and Ontario student loans

• Loan repayments start after the non-repayment (“grace”) period, which is 6 months after studies end

• Interest accumulates on Canada portion of student loan during grace period, unless returned to full-time studies before end of period

• Can make payments at any time without penalty

Consolidation Letter• Prior to end of grace period, students

receive Consolidation Letter detailing outstanding student loans and requesting payment term options

• Terms include• Treatment of accumulated interest on Canada

portion of student loan• Interest Rate Type• Repayment period• Repayment method

Grace Period Interest• Both Ontario and Canada portions of the

student loans are interest-free during the study period

• Ontario portion interest-free during the grace period; Canada portion accumulates interest

• Options for handling the accumulated interest:• Capitalize - adds interest to your outstanding

student loan amount• Pay it off as lump-sum prior to start of loan

repaymentNote: all interest paid on Canada and Ontario portions of student loan is tax-

deductible

Type of Interest Rate

25

Floating interest means: Your interest rate will be

set at the prime plus 2.5%.

The rate can change during the repayment period.

Can change to fixed later on

Fixed interest rate means: Your interest rate will be set

at the prime plus 5%. The rate will not change

during your repayment period.

Cannot change to floating

• On Ontario portion of student loan interest rate is set at the prime rate + 1%

• On Canada portion of student loan choice of

Note: Current prime rate is 2.85%

Repayment Period

26

Shorter repayment period:

Less interest paid in total Larger monthly payment

Longer payment period: Smaller monthly payments More interest paid in total

• You can choose to repay your loan over any period of time up to a maximum of 14.5 years (Most take 9.5 years)

• Payment terms can be adjusted any time during your repayment period

Repayment Method

27

• First payment is due on the last day of the 7th month after end of studies

• Payments can be scheduled and automatically deducted from your bank account each period (pre-authorized)

• Or payment be made manually each period via• Telephone payment• Online banking• Cheque or money order

Accelerate Payments• Make lump-sum or additional payments, or change

payment frequency, at any time prior to or during repayment period, without penalty

28

$25,000 at fixed rate of interest for 9.5 years Do Nothing

Increasing Minimum

Payments by $20/month

Making $250 lump sum

payments once a year

Making payments every two

weeks

Payment Amount $289.80monthly

$309.80monthly

$289.80monthly, plus

one $250 payment/year

$144.90 every two

weeks

Number of months you will need to repay your loan 114 106 105 102

Total interest payable over the life of your loan $8,037.20 $7,194.20 $7,097.07 $7022.90

Total interest savings $0.00 $843.39 $940.13 $1014.30

Repayment Difficulties• Missing loan payments can have significant

consequences

• Credit rating could be affected

• Future OSAP funding will be denied, if payments are more than 3 months late

• Assigned to Canada Revenue Agency (who can confiscate tax refunds and/or tax benefits) or a private collection agency, if loan is in default (more than 9 months late)

• Before missing payments you should contact NSLSC to discuss your situation and get options

29

Repayment Assistance Plan• RAP provides temporary relief from making full

loan payments until you are more financially stable

• If qualified, loan payments can be either reduced to an affordable level or put on hold, based on income and family size

• Not available if your loan is currently in default

• Must apply to NSLSC every 6 months to continue to obtain a reduced or on hold payment plan, if circumstances warrant

RAP Estimator• The Repayment Assistance Estimator, at

CanLearn.ca, will provide an estimate of what an afforable payment is:

• A single borrower, owing $25,000, no dependents, earning $2000/month

Revise Payment Terms• Allows borrowers to monthly payments temporarily

or for the remainder of the loan

• Lower payments by Making interest-only payments (limited to two – 6 month

terms) Adjust the repayment term up to a maximum of 174

months (14.5 years)

• Differs for Repayment Assistance Program All borrowers are eligible Payments are required each month

Rehabiliting Loans in Default• If loan is in default (more than 9 months late)

must rehabilitate the loan

• Will need to qualify with CRA and collection agency, who will provide payment schedule (usually for 6 months)

• After making payments per the schedule, loan is rehabilitated and transferred back to NSLSC for future payment handling

• Once rehabilitated borrower can apply for RAP

• Also may become eligible for future OSAP funding

OSAP Loans and Bankruptcy• OSAP loan is not eligible for discharge through

bankruptcy unless loan is – at least 7 years from end of full-time studies; or– at least 5 years if borrower experiencing financial

hardship that is expected to continue.

• Three years after the discharge, borrower can reapply for OSAP.

• If OSAP recipients file during their studies they may still be eligible for further funding if no break taken in studies

• Otherwise required to repay all outstanding loans first

Financial Aid Office

Helps students plan for and meet educational expenses while attending university. They offer information and access to financial resources scholarships, bursaries, awards, grants from internal (university and donors) government (federal and provincial) and external organizations that support student success and university affordability. 

Regular Office Hours:– Monday to Thursday 8:30 a.m. to 6 p.m.

– Friday: 12 noon to 4:30 p.m.

• Phone: 416-979-5113• Fax: 416-979-5081• Email for Financial Assistance Inquiries: finaid@ryerson.ca

Reminders

Apply early!

Submit all required documentation promptly Check status of your application frequently in case OSAP requests additional documentation

Any Further Questions?Please feel free to contact:Financial Wellness Program

416-645-6000 Ext. 1330fw@woodgreen.org

Contact Information of OSAP Delivery Agents

Status of OSAP ApplicationFinancial Aid Office of the OSAP applicant’s Postsecondary Institution (Searchable from the web or phone directory)

Loans Not in DefaultNational Student Loans Service Centre (NSLSC)P.O. Box 4030Mississauga, Ontario L5A 4M4Within North America: 1-888-815-4514 TTY 1-888-815-4556

Canada Loans in DefaultContact NSLSC at 1-888-815-4514 , TTY 1-888-815-4556 NSLSC will discuss the account with the borrower and direct the borrower to the appropriate area.

Ontario Loans in Default (Recent Default or Private Collection Agent unknown)Ministry of Finance, Collection Management Unit40 Elm Street, Suite 41ASudbury, ON P3C 1S81‑800‑387‑5604 or 416-326-0500

Financial Literacy Series:Tuesday March 3rd : OSAP 101

• Wednesday March 4th: Budgeting

• Monday March 9th: Banking

• Wednesday March 11th : Tax 101

LOCATION:RYERSON STUDENT CENTER - THOMAS LOUNGE

Thank Youfor your time!