- Loan Repayment Basics
- Interest Free Period for Alberta Student Loans
- Flexible Repayment Options
- Repayment Assistance Plan (RAP)
- Repayment Assistance for Borrowers with a Permanent Disability
- Defaulted Loans
- Deceased Borrower
Repayment Assistance Plan (RAP)
Reg.: Schedule 2, s. 34
The Alberta Repayment Assistance Plan (RAP) assists eligible borrowers with repayment difficulties. Borrowers must apply for RAP and, if approved, will receive RAP benefits for a time period not to exceed 6 months; borrowers must re-apply to receive further benefits.
The federal government also offers a Repayment Assistance Plan for federal loans. Federal RAP and Alberta RAP work closely together. The Government of Canada website provides a Repayment Assistance Estimator to see if a student is eligible to receive repayment assistance.
Borrowers with both Canada and Alberta student loans only need to submit one Repayment Assistance Plan Application, to the National Student Loans Service Centre to be considered for both programs. The financial eligibility criteria are the same for each program, and borrowers who qualify for both programs will have the same RAP eligibility period for both Alberta Student Loans and Canada Student Loans. The affordable payment calculated for each borrower will be apportioned between federal and provincial loans.
Borrowers who only have Alberta student loans and borrowers residing outside of Canada can apply for Alberta RAP by contacting the Alberta Student Aid Service Centre or by accessing the paper Alberta RAP application. Borrowers residing outside of Canada are not eligible to apply for Federal RAP for their federal loans but are eligible to apply for Alberta RAP for their provincial loans.
RAP is not available on Alberta student loans that have already been returned to the Government of Alberta due to default. For loans that have been returned, borrowers must contact Service Alberta, Crown Debt Collections at 780-427-3244 to discuss repayment options.
To be eligible for Alberta RAP on their Alberta Student Loan, borrowers must:
- be in repayment status on the loan,
- be in good standing on the loan,
- not be restricted from Alberta RAP due to failing to make previous RAP Affordable Payments,
- not have had the loan included in a bankruptcy,
- provide all requested documents to support the RAP application, and
- meet financial eligibility requirements by having a calculated Affordable Payment that is less than their Required Payment.
To be financially eligible for Alberta RAP, borrowers must have a lower RAP Affordable Payment than their RAP Required Payment.
Required Payment is defined as:
- In Stage 1, the Required Payment is equal to the amount the borrower’s monthly payment would be if their outstanding principal were amortized over 120 months, less the number of months since they most recently ceased to be a student, plus the number of months in which they received RAP or Interest Relief since most recently ceasing to be a student.
- In Stage 2, the Required Payment is derived by amortizing the borrower’s loan over 180 months minus the number of months since the borrower ceased to be a student.
Affordable Payments are calculated using the following table and formula:
|Family Size (I)||1||2||3||4||5|
|$0 Payment Threshold (T)||$2,083||$3,254||$4,205||$4,959||$5,652|
Affordable Payment Formula:
A borrower’s monthly Affordable Payment is the lesser of:
a) A * 0.2 * their gross monthly family income, or
b) A * 1.5 [(X-Ti) / Si / 100 + 0.01] * their gross monthly family income.
A = the applicant’s debt as a proportion of the total debt of the applicant and that of the spouse or common-law partner
X = applicant’s monthly family gross income
T = $0 Payment Threshold amount for applicant’s family size (see table above)
S = increment value for applicant’s family size (see table above)
i = denotes family size.
Borrowers who have interest owing at the time they apply for RAP will automatically have their RAP effective date considered for backdating. The borrower must have met the RAP financial eligibility criteria for the month prior to the date of which the application is signed, to be considered for backdating.
RAP applications may be backdated up to six months and/or up to three months of interest can be capitalized.
For borrowers with both federal and provincial loans, the aligning of the Alberta RAP period end date with the federal RAP period end date will always take precedence over backdating.
When a borrower with an Alberta Student Loan that is held by a financial institution (i.e. Royal Bank or CIBC) applies for RAP, the borrower’s Alberta student loans held by the financial institution will be transferred to the Alberta Student Aid Service Centre. Any RAP benefits will be administered by the Alberta Student Aid Service Centre.
Borrowers who have not met the financial eligibility criteria for RAP may submit a written request to Alberta Student Aid to review their RAP eligibility. Similarly, borrowers who have been approved for RAP may request a review of their reduced Affordable Payments under certain circumstances.
Stage 1 of RAP is designed to provide relief to borrowers with temporary repayment difficulties, while Stage 2 of RAP provides longer-term relief for borrowers with ongoing difficulties.
The government (federal or provincial, according to the loan type) pays monthly interest costs, and the borrower’s affordable payment (if any) goes towards the loan’s principal balance.
A borrower will be placed in RAP Stage 1 if:
- the first day of the month in which they applied for RAP is within 120 months of when they ceased to be a student, and
- the borrower has not received 60 cumulative months of RAP and/or Interest Relief since they ceased to be a student.
The government pays the difference between the borrower’s monthly affordable payment and the borrower’s required payment (when the loan is amortized over 15 years), thereby reducing the loan’s principal balance. The result is that no borrower who continues to qualify for RAP will have a repayment period that lasts more than 15 years since the time they stopped being a student.
Borrowers who enter Stage 2 of RAP are restricted from receiving further federal funding if they return to studies until their debt is repaid. Borrowers are eligible to receive further provincial funding.
An eligible borrower will be placed in RAP Stage 2 if either of the following applies:
- the first day of the month in which they applied for RAP is more than 120 months after they ceased to be a student, or
- the borrower has received more than 60 cumulative months of RAP Stage 1 and/or Interest Relief since they ceased to be a student.