Effective November 1, 2019, changes come into effect which will reduce the amount of interest a student will pay on their Canada Student Loan.
- No interest during the student’s non-repayment period
For the first six months after a student leaves school, they do not have to make payments to their Canada-New Brunswick Integrated Student Loan. This is called the six-month non-repayment period or grace period. The Canada-New Brunswick Integrated Student Loan has two funding portions. The New Brunswick Student Loan portion is funded by the provincial government and the Canada Student Loan portion is funded by the federal government. In the past, interest started to accrue on both portions of an integrated student loan as soon as the student leaves school. Starting November 1, 2019, interest will no longer accumulate on the Canada Student Loan portion during the six-month non-repayment period. The New Brunswick Student Loan portion will continue to accumulate interest during the non-repayment period.
- Lower interest rates upon repayment
Students are required to start repaying their student loan six months after they have ended their studies (i.e. graduated, transferred to part-time studies, withdrawn, or taking time off from studies for more than six months). Upon entering repayment, interest on the student loan is automatically set at the floating (variable) rate. Borrowers have a one-time option of switching to a fixed interest rate; however, over 99% of borrowers keep the floating interest rate. Effective November 1, 2019, the floating interest rate on the Canada Student Loan portion will be lowered from prime plus 2.5% to prime and the fixed interest rate will be lowered from prime plus 5% to prime plus 2%. Interest rates on New Brunswick Student Loan portion will remain unchanged at a floating rate of prime plus 2.5% and fixed rate of prime plus 5%.