Repayment Rate Benchmarks

As part of the Pan Canadian Designation Policy Framework, provinces and territories are required to monitor student loan repayment rates at educational institutions, evaluate those rates and take compliance action when repayment rates are below acceptable levels. One focus of the Framework is to improve the performance of the student loan portfolio, providing accountability to students and taxpayers and maintaining performance targets for designated educational institutions.

The repayment rate benchmarks used by Alberta Student Aid are set by the Canada Student Loans Program (CSLP) and created based on national data from a three year cycle using a standard deviation methodology.

The current repayment rate benchmark zones in Alberta are:

Benchmark repayment ranges are subject to change. Alberta Student Aid will notify educational institutions when there are any changes to the benchmarks. The repayment rate methodology is explained within the Pan Canadian Designation Policy Framework.   

The Government of Canada publicly tracks Canada Student Loan Repayment Rates by institution. Students are encouraged to check institution repayment rates to help them make informed decisions about their post-secondary education.

Three Year Evaluation Process for Alberta Educational Institutions

Repayment rates are monitored on an annual basis using a three year evaluation cycle. An educational institution’s benchmark zone performance in their first year will determine the evaluation process for three years.

An educational institution with a repayment rate in the green and/or yellow zone will have its three year evaluation cycle reset back to the first year if their repayment rate falls into the red zone at any point, with the most recent year as the new benchmark.

Exception:

Educational institutions with 10 or fewer borrowers are not subject to the Three Year Evaluation Process but will still be evaluated on an annual basis. The educational institutions are subject to the same level of scrutiny as educational institutions in the 1^st Year of the Three Year Evaluation Process if they fall within the red or yellow zone. However, these educational institutions are not at risk for de-designation.

Example 1: School A’s Evaluation Process

1^st Year – Evaluation in 1^st Year of the Three Year Evaluation Process shows School A has a 30.0% repayment rate, which means School A is in the red zone.

• School A must provide proof of a current Loan Repayment Strategy and meet with Alberta Student Aid to discuss.
• School A’s repayment rate must be in the yellow zone in the 3^rd Year of the evaluation cycle.

2^nd Year – Evaluation shows School A’s repayment rate has improved to 62.0% and is in the yellow zone.

• 2^nd Year is a monitoring year only for School A.

3^rd Year – Evaluation shows School A’s repayment rate has dropped to 42.0% and is in the red zone.

• School A may be recommended to the Minister for de-designation as the required benchmark zone was not achieved.

Example 2: School B’s Evaluation Process

2019 – Evaluation in 1^st Year of the Three Year Evaluation Process shows School B has an 89.0% repayment rate, which means School B is in the green zone.

• Benchmark is to maintain repayment rates in the green zone by 2021.

2020 – Evaluation shows School B’s repayment rate has dropped to 56.0%. School B is now in the red zone and has triggered a reset of their Three Year Evaluation Process.

• The evaluation cycle resets and School B is back into 1^st Year of the Three Year Evaluation Process.
• School B must provide proof of a current Loan Repayment Strategy and meet with Alberta Student Aid to discuss.
• A new benchmark is set. School B must be in the yellow zone in 2022.

2021 – Evaluation shows School B did not improve their repayment rate and remains in the red zone.

• 2^nd Year is a monitoring year only for School B.

2022 – Evaluation shows School B’s repayment rate has improved to 58.0%, but is still in the red zone.

School B may be recommended to the Minister for de-designation as the required benchmark zone was not achieved.

Loan Repayment Strategy

Alberta post-secondary institutions with designated programs must have a documented Loan Repayment Strategy in place that outlines how and when they provide loan information and resources to students receiving student aid. It is the educational institution’s responsibility to ensure its strategy is effective for the specific needs of its students, and that the strategy and resources they are using are updated annually.

At a minimum, educational institutions need to provide information to their students about:

• The two types of loans (Alberta and Canada),
• The Alberta and Canada Repayment Assistance Plans and how to apply for them, and
• Contact information for the Alberta and Canada student loan service providers.

A strategy defines how an institution will educate its students on their loan responsibilities. It will also empower the student to successfully manage their loans through regular payments or through government repayment assistance programs, and will support students to successfully complete their program of study.

An effective strategy will be tailored to the specific needs of the post-secondary institution’s students. In creating a Loan Repayment Strategy, institutions should:

• Plan its strategy by considering the main factors that promote loan repayment and contribute to loan default.
• Customize its strategy based on unique aspects of its post-secondary institution and its programs and students
• Incorporate the five key elements of an effective strategy:
  • educating borrowers through student loan counselling resources
  • leveraging technology
  • managing student retention and withdrawals
  • providing employment services for students
  • building alliances and training staff within the post-secondary institution
• Document its strategy, detailing how it will provide information to students, what information will be provided upon student completion and graduation, and when it will be provided. Including samples of these resources in the Loan Repayment Strategy is recommended.
• Implement the strategy, incorporating best practices recommended by other post-secondary institutions across Alberta with its own knowledge of what will work best for its institution.
• Maintain the strategy by reviewing it each year and updating it with new loan information resources.

Alberta Student Aid is available to assist institutions with the development and/or review of their loan repayment strategy.