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O. Reg. 268/01: ONTARIO STUDENT LOANS MADEAFTER JULY 31, 2001

filed July 5, 2001 under Ministry of Training, Colleges and Universities Act, R.S.O. 1990, c. M.19

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ONTARIO regulation 268/01

made under the

ministry of training, colleges and universities act

Made:  July 4, 2001
Filed:  July 5, 2001
Printed in The Ontario Gazette: July 21, 2001

ontario student loans made
after July 31, 2001

contents

 

Application and Interpretation

1.

Application

2.

Definitions

 

The Student Loan Process

3.

Obtaining and repaying a student loan

 

Applying for a Certificate of Loan Approval

4.

Applying for a certificate of loan approval

5.

Prerequisites for certificate

6.

Residency requirement

7.

Approved courses of study

8.

Approved institutions

9.

Minimum required course load

 

Certificate of Loan Approval

10.

Issuance of certificate and criteria for issuance

11.

Education costs of an individual

12.

Expected contributors to an individual’s education costs

13.

Financial resources of an individual

14.

Grounds for refusing to issue a certificate

15.

Restrictions on issuance of certificate

16.

Scope and duration of certificate

17.

Maximum amount of loan approved by a certificate

18.

Replacement certificate

 

Obtaining a Student Loan

19.

Applying for a student loan

20.

Student loan agreement

21.

Restriction on advances

22.

Duty to give notice of material change in circumstances

 

Maintaining Status as a Qualifying Student

23.

Qualifying student

24.

Confirmation of enrolment by institution

25.

Confirmation of enrolment by Minister

26.

Effect of status as a qualifying student

27.

Ceasing to be a qualifying student

 

Consolidated Loan Agreement and
Repayment Terms

28.

Requirement for a consolidated loan agreement

29.

Arrangement if there is no consolidated loan agreement

30.

Obligation to pay interest

31.

Repayment terms

32.

Amendment to prevent default

 

Reduction of Principal

33.

Ontario Student Opportunity Grant

34.

Repayment to Minister

 

Suspension of Payments

35.

Application for relief from obligation to make payments

36.

Eligibility for relief

37.

Decision to grant relief

38.

Effect of granting relief

39.

Criteria for granting extended relief

40.

Revocation of suspension

 

Default on a Student Loan

41.

What constitutes default

42.

Consequences of default

 

General

43.

Subrogation of the Crown

44.

Payments by lenders to the Minister

45.

Effect of false statements

46.

Officers authorized to issue certificates

47.

Authority of service providers

48.

Commencement

 

Application and Interpretation

Application

1. This Regulation applies with respect to student loans made after July 31, 2001.

Definitions

2. In this Regulation,

“approved course of study” means a course of study described in section 7;

“approved institution” means an institution described in section 8;

“consolidated loan agreement” means an agreement described in section 28;

“qualifying student” means a student described in section 23;

“expected contributor” means, in relation to an individual, another individual described in section 12;

“lender” means a financial institution that, under a student loan agreement, makes a student loan to an individual or, if the Minister makes a student loan to an individual, the Minister;

“same-sex partner” means either of two persons of the same sex who,

(a) have lived together in a conjugal relationship outside marriage continuously for a period of not less than three years, or

(b) have lived together in a conjugal relationship outside marriage in a relationship of some permanence, if they are the natural or adoptive parents of a child;

“service provider” means a person or entity who has entered into an agreement with the Minister, or an agreement approved by the Minister, to provide services with respect to the disbursement, administration, management or delivery of student loans;

“spouse” means either of a man and woman who,

(a) are married to each other,

(b) have together in good faith entered into a marriage that is voidable or void,

(c) have lived together in a conjugal relationship outside marriage continuously for a period of not less than three years, or

(d) have lived together in a conjugal relationship outside marriage in a relationship of some permanence, if they are the natural or adoptive parents of a child;

“student loan agreement” means an agreement entered into under section 20.

The Student Loan Process

Obtaining and repaying a student loan

3. (1) An individual who wishes to obtain a student loan must obtain a certificate of loan approval from the Minister in accordance with sections 4 to 17, give the certificate to a service provider while the certificate is valid and negotiate the loan in accordance with sections 19 and 20.

(2) The terms of the student loan are set out in section 20 and in the student loan agreement that the individual enters into.

(3) While the individual remains a qualifying student, the individual is not required to repay the student loan.

(4) After the individual ceases to be a qualifying student, he or she is required to enter into an agreement under section 28 to consolidate all of his or her student loans made after July 31, 2001.

(5) The repayment of the student loan is governed by sections 30 to 34 and by the terms of the consolidated loan agreement.

Applying for a Certificate of Loan Approval

Applying for a certificate of loan approval

4. (1) An individual who wishes to obtain a student loan must apply to the Minister for a certificate of loan approval, and the application must specify the period of study for which the loan is needed as well as the approved institution and approved course of study in which the individual intends to enrol.

(2) The application must be made on a form approved by the Minister.

Prerequisites for certificate

5. An individual is not eligible to receive a certificate of loan approval unless he or she is a Canadian citizen or a permanent resident within the meaning of the Immigration Act (Canada), meets the residency requirement set out in section 6, is enrolled in an approved course of study at an approved institution and is taking at least the minimum required course load for the course of study.

Residency requirement

6. (1) An individual meets the residency requirements for a certificate of loan approval if either of the following conditions is met throughout the 12 months ending on the last day of the month in which classes normally begin in the applicable educational institution:

1. The individual resided in Ontario.

2. One of the individual’s expected contributors, if any, resided in Ontario.

(2) Whether an individual resided in Ontario during a particular period is to be determined with reference to the individual’s circumstances and the provisions of any agreement between the Province and the Government of Canada or the government of another province of Canada respecting grants or loans to students.

(3) For the purposes of paragraph 1 of subsection (1), an individual shall be deemed to reside in Ontario during a period in which he or she was enrolled at a post-secondary institution outside Ontario but in Canada,

(a) if he or she was authorized under the Immigration Act (Canada) to enter Canada for the purpose of studying in Canada; or

(b) if he or she had been finally determined to be a Convention refugee under the Immigration Act (Canada).

Approved courses of study

7. (1) A course of study is an approved course of study for the purposes of student loans if it consists of one or more courses of study of at least 12 weeks duration approved by the Minister leading to a certificate, degree or diploma.

(2) A bar admission course conducted by the Law Society of Upper Canada is an approved course of study.

(3) The Minister may withdraw his or her approval for a course of study if the course ceases to meet the requirements established under the Act, terms established by the Minister or terms established in any agreement entered into for the purposes of the Minister’s approval.

Approved institutions

8. (1) The following institutions are approved institutions for the purposes of student loans:

1. Every public university in Ontario, including any post-secondary educational institution that is affiliated or federated with such a university.

2. Every college of applied arts and technology established under the Act.

3. Every college of agricultural technology established under the Ministry of Agriculture, Food and Rural Affairs Act.

4. The Law Society of Upper Canada.

5. The Niagara Parks Commission School of Horticulture.

(2) An institution described in one of the following paragraphs is an approved institution for the purpose of student loans if it is approved by the Minister for that purpose:

1. A public post-secondary institution in Canada that is not described in subsection (1).

2. A private post-secondary educational institution or entity that is authorized under the Degree Granting Act or the Post-secondary Education Choice and Excellence Act, 2000 to operate as a university or to offer a program leading to a degree.

3. A private vocational school registered in Ontario under the Private Vocational Schools Act.

4. A private post-secondary institution in Ontario, other than one described in paragraph 2 or 3.

5. A private vocational school operating in another jurisdiction that is authorized by that jurisdiction to operate as a private vocational school or as an analogous type of school.

(3) The Minister may withdraw his or her approval of an institution described in subsection (2) if the institution ceases to meet the requirements established under the Act, terms established by the Minister or terms established in any agreement entered into for the purposes of the Minister’s approval.

Minimum required course load

9. An individual enrolled in an approved course of study at an approved institution is taking the minimum required course load for the purposes of student loans,

(a) if he or she is enrolled in at least 60 per cent of what the institution considers to be a full course load for that course of study, in the case of an individual who is not a person with a disability;

(b) if he or she is enrolled in at least 40 per cent of what the institution considers to be a full course load for that course of study, in the case of an individual who is a person with a disability.

Certificate of Loan Approval

Issuance of certificate and criteria for issuance

10. (1) The Minister may issue a certificate of loan approval to an individual, if the Minister considers that the individual needs a student loan in order to pursue an approved course of study at an approved institution for a specified period of time.

(2) When deciding whether an individual needs a student loan, the Minister shall consider the individual’s education costs and financial resources and may consider other factors that are relevant in the Minister’s opinion.

Education costs of an individual

11. For the purposes of a student loan, the following are an individual’s education costs for an approved course of study at an approved institution for a particular period of study:

1. The tuition and other compulsory fees payable to the institution.

2. The estimated cost allowance established by the Minister for books and other instructional supplies.

3. The estimated weekly cost allowance established by the Minister for personal and living needs.

4. The estimated cost allowance established by the Minister for such other expenses as the Minister considers relevant in the circumstances.

Expected contributors to an individual’s education costs

12. The Minister may expect one or more of the following individuals to contribute toward the education costs of another individual (the “student”) for a period of study in an approved course of study at an approved institution:

1. The student’s parents.

2. An individual who is the student’s sponsor within the meaning of the regulations made under the Immigration Act (Canada).

3. The individual who, on the last day of the month in which classes normally begin during that period of study at that institution, is the student’s spouse or same-sex partner.

Financial resources of an individual

13. (1) For the purposes of a student loan, the amount of an individual’s financial resources for a particular period of study in an approved course of study at an approved institution is the amount of money that the Minister expects the individual and his or her expected contributors, if any, to contribute toward the individual’s education costs for the period.

(2) The Minister shall determine the individual’s financial resources having regard to the following matters:

1. The individual’s total income from all sources, including earnings from summer and other part-time or full-time employment, investment income and other income including gifts.

2. Any academic awards and government assistance that the individual is receiving or is entitled to receive.

3. The assets of the individual and, if the individual has a spouse or same-sex partner, the assets of the spouse or same-sex partner.

4. If the individual has expected contributors, their total income from all sources.

5. If the individual has expected contributors, their personal income tax payments and employment insurance and pension plan contributions.

6. The number of other individuals that, in the opinion of the Minister, are dependants of the individual or his or her expected contributors, if any.

7. Any other resources, assets or deductions of the individual and his or her expected contributors, if any, that the Minister considers to be relevant in the circumstances.

Grounds for refusing to issue a certificate

14. (1) The Minister may refuse to issue a certificate of loan approval to an individual in any of the following circumstances relating to the individual’s finances and financial resources:

1. The individual or his or her spouse or same-sex partner owns, possesses or controls real or personal property that, in the opinion of the Minister, constitutes sufficient financial resources to meet the individual’s education costs.

2. The individual is receiving or is entitled to receive financial assistance from the Government of Canada or from the government of another province or territory of Canada.

3. After considering the contents of a consumer report of the individual’s current debts, the Minister is of the opinion that the individual will not repay a student loan.

(2) The Minister may refuse to issue a certificate of loan approval to an individual if the Minister considers, after consulting with the approved institutions at which the individual has been enrolled, that the individual has not made satisfactory progress in a program of study.

(3) The Minister may refuse to issue a certificate of loan approval to an individual in any of the following circumstances relating to actions of the individual:

1. The individual has not made arrangements that are satisfactory to the Minister to repay, or has not repaid, a student loan or any other amount required to be paid to the Crown in respect of a loan, grant or award made by the Government of Ontario, the Government of Canada or the government of any other province or territory.

2. The individual has not given the Minister all of the information and documents required by the Minister to administer the Ontario Student Awards Program, including information about the individual’s academic status, financial status or family status during a period of study.

3. The individual has given the Minister incorrect information relating to a student loan, or has not informed the Minister promptly about any change to information previously given to the Minister.

4. The individual has been convicted of an offence under the Ministry of Training, Colleges and Universities Act, the Can­ada Student Loans Act or the Canada Student Financial Assistance Act or an offence under the Criminal Code (Canada) involving fraud or theft in respect of any student assistance program or a loan, grant or award made by the Government of Ontario, the Government of Canada or the government of any other province or territory.

Restrictions on issuance of certificate

15. (1) The Minister shall not issue a certificate of loan approval to an individual if the loan that would be approved by the certificate, together with loans previously received by the individual under the Act, are in respect of periods of study totalling more than,

(a) 340 weeks for an individual who is enrolled in a program other than a doctoral program; or

(b) 400 weeks for an individual who is enrolled in a doctoral program.

(2) Despite subsection (1), the Minister may issue a certificate of loan approval to an individual in the circumstances described in subsection (1),

(a) in order to accommodate an individual who is a person with a disability; or

(b) in order to accommodate an individual in exceptional circumstances.

(3) Clause (2) (b) is revoked on August 1, 2002.

Scope and duration of certificate

16. (1) A certificate of loan approval authorizes a student loan to be made to a particular individual for the period of time, the approved course of study and the approved institution specified in the certificate.

(2) A certificate of loan approval is valid for 30 days after an official of the institution completes a form confirming the individual’s enrolment in the course of study for the period of time specified in the certificate.

Maximum amount of loan approved by a certificate

17. (1) A certificate of loan approval issued to an individual who is a single student cannot approve a loan that is greater than $170 for each week of the individual’s anticipated enrolment in the approved course of study.

(2) A certificate of loan approval issued to any other individual cannot approve a loan that is greater than $395 for each week of the individual’s anticipated enrolment in the approved course of study.

(3) In this section,

“single student” means an individual who does not have a spouse, same-sex partner or dependent child on the last day of the month in which classes normally begin in the approved course of study.

Replacement certificate

18. (1) If a certificate of loan approval is lost or stolen, the individual to whom it was issued may apply to the Minister for a replacement certificate.

(2) The Minister may issue a replacement certificate if he or she is satisfied that the original has been lost or stolen.

Obtaining a Student Loan

Applying for a student loan

19. (1) If an individual to whom a certificate of loan approval has been issued wishes to obtain a student loan, he or she must give the certificate to a service provider and complete an application for a student loan.

(2) The application must be made on a form approved by the Minister.

(3) In the application, the individual must declare all loans made for educational purposes that have previously been made to him or her by any lender under the Ministry of Training, Colleges and Universi­ties Act, the Canada Student Loans Act and the Canada Student Financial Assistance Act.

Student loan agreement

20. (1) If the service provider is satisfied that an individual who applies for a student loan is entitled to one and has a certificate of loan approval, the service provider may enter into a student loan agreement with him or her on behalf of a lender.

(2) The service provider is not permitted to enter into a student loan agreement with an individual for an amount greater than the amount specified in the individual’s certificate of loan approval.

(3) An agreement that purports to make a student loan for a greater amount shall be deemed not to be a student loan agreement to the extent of the excess, and the amount of the excess shall be deemed not to be a student loan for the purposes of this Regulation.

Restriction on advances

21. (1) A service provider or lender is not permitted to make an advance in respect of a student loan to an individual before the service provider receives the individual’s certificate of loan approval and application for the student loan.

(2) If an advance in respect of a student loan is made, the service provider shall promptly distribute the copies of the application for the loan in accordance with the instructions on the form.

Duty to give notice of material change in circumstances

22. (1) An individual who enters into a student loan agreement is required to promptly notify the service provider of any material change in his or her circumstances that occurs during the period of study for which the loan is made.

(2) A material change in circumstances includes a change in the individual’s marital or family status, a change in his or her enrolment, a change in education costs described in section 11 for the period of study and a change in financial resources described in section 13.

Maintaining Status as a Qualifying Student

Qualifying student

23. (1) An individual is a qualifying student during a period of study for which he or she receives a student loan.

(2) An individual may be a qualifying student during a period of study for which he or she does not receive a student loan, if the requirements set out in section 24 or 25 are met.

(3) If an individual ceases to be a qualifying student for a period of less than six months, the individual shall be deemed to have been a qualifying student throughout that period.

Confirmation of enrolment by institution

24. (1) An individual who wishes to be a qualifying student during a period of study for which he or she does not receive a student loan must comply with this section.

(2) The individual must obtain a document from the institution at which he or she is enrolled, confirming,

(a) that he or she is enrolled in an approved course of study at an approved institution during the period, and that he or she is taking at least the minimum required course load;

(b) that he or she is enrolled at a secondary school within the meaning of the Education Act;

(c) that he or she is enrolled at a designated educational institution as defined in the Canada Student Financial Assistance Act; or

(d) that he or she is enrolled at an educational institution not described in clause (a), (b) or (c) that is approved by the Minister for the purposes of this section.

(3) The confirmation of enrolment must be given on a form approved by the Minister and must be certified by the institution at which the individual is enrolled.

(4) The individual must give the service provider the confirmation of enrolment form promptly upon becoming enrolled as described in subsection (2).

(5) Subject to subsection 25 (2), the individual is a qualifying student under this section beginning on the date on which the service provider receives the confirmation of enrolment form.

Confirmation of enrolment by Minister

25. (1) Even though an individual does not comply with section 24, the individual is a qualifying student during a period of study for which he or she does not receive a student loan if he or she establishes to the satisfaction of the Minister that,

(a) the individual was unable to obtain a confirmation of enrolment form under section 24;

(b) the individual is enrolled in an approved course of study at an approved institution or is enrolled in a course of study at an educational institution described in clause 24 (2) (b), (c) or (d); and

(c) his or her course load is at least the minimum required course load for that course of study at that institution.

(2) The individual must obtain from the Minister a confirmation of enrolment form under this section and must give it to the service provider promptly.

(3) Subject to section 27, the individual is a qualifying student under this section beginning on the date on which the service provider receives the confirmation of enrolment form.

Effect of status as qualifying student

26. (1) While an individual is a qualifying student, his or her obligations to pay principal and interest under a student loan agreement and under a consolidated loan agreement, if any, are suspended.

(2) If the individual owes interest to the lender under the student loan agreement or the consolidated loan agreement, if any, for a period during which he or she was not a qualifying student, and if the lender asks the individual to pay the accrued interest for that period, subsection (1) does not apply until the individual pays the accrued interest.

(3) The individual is not permitted to pay the accrued interest by means of a promissory note.

Ceasing to be a qualifying student

27. An individual ceases to be a qualifying student in any of the following circumstances:

1. The individual ceases to be enrolled in the approved course of study in respect of which his or her most recent certificate of loan approval was issued.

2. The individual reduces his or her course load below the minimum required course load in the approved course of study.

3. The individual withdraws from the applicable educational institution.

4. The course of study in which the individual is enrolled at the approved institution ceases to be an approved course of study.

5. The institution at which the individual is enrolled ceases to be an approved institution or to be described by clause 24 (2) (b), (c) or (d).

Consolidated Loan Agreement and Repayment Terms

Requirement for a consolidated loan agreement

28. (1) Every individual who enters into one or more student loan agreements shall enter into a consolidated loan agreement with the lender after the individual ceases to be a qualifying student.

(2) If the individual does not enter into a consolidated loan agreement within six months after ceasing to be a qualifying student, section 29 applies until he or she does enter into such an agreement.

(3) The consolidated loan agreement must establish the amount and duration of the repayments to be made to discharge the principal amount of all outstanding student loans made after July 31, 2001 and the interest on the outstanding balance from time to time, and the agreement may provide for other matters.

(4) If the individual enters into a consolidated loan agreement and then becomes a qualifying student again, he or she is required to enter into a new consolidated loan agreement after ceasing to be a qualifying student, and the new agreement supersedes the old agreement.

(5) If the individual does not enter into the new consolidated loan agreement within six months after ceasing to be a qualifying student, section 29 applies until he or she does enter into such an agreement.

Arrangement if there is no consolidated loan agreement

29. If an individual does not enter into a consolidated loan agreement within six months after ceasing to be a qualifying student, the lender may establish the amount and duration of the repayments to be made to discharge the principal amount of all outstanding student loans made after July 31, 2001 and the interest on the outstanding balance from time to time.

Obligation to pay interest

30. (1) An individual is not required to pay interest under a student loan agreement or under a consolidated loan agreement until the last day of the month in which he or she ceases to be a qualifying student.

(2) The interest rate in effect on any day under a student loan agreement or a consolidated loan agreement is the prime rate on that day plus 1 per cent.

(3) In this section,

“prime rate” means the average variable reference rate of interest as calculated monthly based upon the average variable reference rates of interest for the month by each of the Bank of Montreal, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, the Royal Bank of Canada and the Toronto-Dominion Bank as their rate for Canadian dollar consumer demand loans, calculated without reference to the highest and the lowest of those five rates and calculated by averaging the remaining three rates.

Repayment terms

31. (1) The term for the repayment of a student loan is to be determined by the lender in consultation with the borrower.

(2) The borrower is entitled to repay all or part of the student loan, without notice or bonus to the lender, before the period for repayment specified in the consolidated loan agreement expires.

(3) The minimum monthly payment by a borrower under a consolidated loan agreement is $15.

(4) Subsection (3) does not apply with respect to the final payment under the agreement.

(5) Instalments of the repayment of a student loan are to be applied first to interest accrued to the date of the payment and then to the outstanding principal.

Amendment to prevent default

32. The lender and borrower may amend their consolidated loan agreement if the borrower notifies the lender that the terms of the agreement are such that he or she will be in default and if the lender considers that an amendment to the agreement will enable the borrower to meet his or her obligations under the agreement.

Reduction of Principal

Ontario Student Opportunity Grant

33. (1) This section applies if an individual receives (and is entitled to receive) student loans under the Act or loans under the Canada Student Financial Assistance Act for at least two academic terms that begin during a 12-month period, and if the first of the terms begins on or after August 1, 2001.

(2) When the individual enters into a consolidated loan agreement, the principal amount of the student loans given to the individual for all academic terms that begin during the 12-month period is reduced by the amount, if any, greater than zero that is calculated using the formula,

(A + B) - ($3,500 ´ C)

in which,

  “A” is the total principal amount of the student loans that the individual received and was entitled to receive under the Act for all academic terms that began during the 12-month period,

  “B” is the total principal amount of the loans that the individual received and was entitled to receive under the Canada Student Financial Assistance Act for all academic terms that began during the 12-month period, and

  “C” is the number of academic terms that began during the 12-month period and in respect of which the individual received a student loan under the Act or a loan under the Canada Student Financial Assistance Act.

(3) Despite subsection (2) and subject to subsection (4), if the individual described in that subsection is granted a scholarship under subsection 27 (1) of the Budget Implementation Act, 1998 (Canada) for one or more of the academic terms that begin during the 12-month period, the principal amount of the student loans given to the individual for all academic terms that begin during that period is reduced by the amount that is the greater of,

(a) $25; or

(b) the amount calculated by adding $500 to the amount calculated in accordance with the formula set out in subsection (2).

(4) Subsection (3) does not apply if the amount calculated under clause (3) (b) is less than zero.

(5) If the individual withdrew or was expelled from one or more academic terms during the 12-month period before completing the term, the term is not considered for the purposes of this section and any loan or scholarship the individual received for the term must not be included in the calculations under subsections (2) and (3).

(6) The Minister may determine that subsection (5) does not apply with respect to an individual’s academic term, after the Minister considers the particular facts and the special circumstances of the individual.

(7) For the purposes of this section, the number of academic terms during a 12-month period is determined using the following Table, and is based on the number of weeks during the 12-month period in which the individual is enrolled in an approved course of study at an approved institution.

table

Number of Weeks

of Enrolment

Number of

Academic Terms

Less than 12 weeks

0

12 weeks or more, up to 21 weeks

1

21 weeks or more, up to 41 weeks

2

41 weeks or more, up to and including 52 weeks

3

 

Repayment to Minister

34. If the total principal amount owing on an individual’s student loans under a consolidated loan agreement is reduced by an amount greater than the amount required by section 33, the Minister may require the individual to pay the difference to the Minister of Finance.

Suspension of Payments

Application for relief from obligation to make payments

35. (1) An individual who wishes to suspend his or her obligation to make payments under a consolidated loan agreement may apply for relief from the obligation.

(2) The application must be made on a form approved by the Minister and must be given to a service provider.

Eligibility for relief

36. (1) An individual is eligible for the suspension of his or her obligation to make payments respecting a student loan,

(a) if he or she has entered into a consolidated loan agreement respecting the loan;

(b) if he or she resides in Canada; and

(c) if, in the opinion of the Minister, he or she is unable to make the payments without incurring exceptional hardship, taking into account his or her gross income from all sources, the gross income of his or her spouse or same-sex partner, if any, and the obligations of the individual and his or her spouse or same-sex partner to children who are dependent on any of them.

(2) If the individual’s obligations have been suspended for a cumulative period of 30 months, the individual’s eligibility for further relief is determined under section 39.

Decision to grant relief

37. (1) The service provider, acting on behalf of the Minister, may suspend an individual’s obligation to make payments under a consolidated loan agreement and shall notify the individual of the suspension.

(2) The suspension takes effect on the date specified in the notice of suspension given to the individual (the “effective date”), and the notice may specify that the suspension be made retroactive to a date that is not earlier than the date that is the later of,

(a) three months before the date on which the individual applied for relief; or

(b) the last day of the sixth month after the month in which the individual ceased to be a qualifying student.

(3) Despite subsection (2), the suspension does not take effect until the individual does one of the following things:

1. Pays all of the unpaid interest under the consolidated loan agreement that has accrued up to the effective date.

2. Enters into a revised consolidated loan agreement in which up to three months of any unpaid interest that has accrued up to the effective date has been capitalized; pays the balance of any unpaid interest that has accrued up to the effective date.

(4) The individual is not permitted to pay the accrued interest referred to in paragraph 2 of subsection (3) by means of a promissory note.

(5) Notice given by the service provider to the individual also constitutes notice to the lender for the purposes of the consolidated loan agreement.

Effect of granting relief

38. (1) When a notice of suspension is issued under section 37, the lender shall suspend the individual’s obligations under the consolidated loan agreement as of the date indicated in the notice.

(2) The suspension of the individual’s obligations continues for six months after the last day of the month of the effective date.

(3) An individual is not required to pay interest under a consolidated loan agreement in respect of any period during which his or her obligations are suspended.

Criteria for granting extended relief

39. (1) If an individual’s obligations under a consolidated loan agreement have been suspended for a cumulative period of 30 months, the Minister may suspend the individual’s obligations for one or more further periods if the Minister is satisfied that the conditions of exceptional hardship still exist.

(2) Section 38 applies with respect to a suspension authorized by subsection (1).

(3) A suspension authorized by subsection (1) cannot extend beyond the date that is 60 months after the date on which the individual ceased to be a qualifying student.

Revocation of suspension

40. (1) The Minister may revoke a suspension given under section 37 or 39 of an individual’s obligations under a consolidated loan agreement if any of the following circumstances exist:

1. The individual made a false statement or a misrepresentation on the application for relief or on any document required by the Minister relating to the application.

2. The individual furnished false or misleading information relating to the application for relief.

3. The individual did not file with the Minister all the information and documents required by the Minister to verify a statement made in the application for relief.

4. The individual did something referred to in subsection 14 (3) that would authorize the Minister to refuse to issue a certificate of loan approval.

(2) If the Minister revokes the suspension of an individual’s obligations, the Minister may require the individual to pay to the Minister the interest paid by the Minister to the lender on the individual’s behalf during the period of the suspension.

(3) The individual shall promptly make the payment required by the Minister under subsection (2).

Default on a Student Loan

What constitutes default

41. An individual is in default of his or her obligation to repay student loans if he or she unequivocally refuses to pay the loans or if he or she does not make a regularly scheduled payment under the consolidated loan agreement or under the arrangement established by the lender under section 29 and the failure to make the payment continues for two months.

Consequences of default

42. (1) When an individual is in default of his or her obligation to repay student loans, the loans are due and payable on the date that is the earlier of the date described in subsection (2) or the following date:

1. If the default occurs because the individual unequivocally refuses to the pay the loans, on the day after the refusal.

2. If the default occurs because the individual does not make a regularly scheduled payment, on the day that is two months after the missed payment was due.

(2) For the purposes of subsection (1), the earlier date is the date, if any, on which the individual becomes subject to, or takes advantage of, any law relating to bankruptcy or insolvency or any law for the relief of debtors other than the law described in subsection (3).

(3) For the purposes of subsection (2), the individual is not considered to be taking advantage of a law for the relief of debtors if he or she makes a consumer proposal under Division I or II of Part III of the Bankruptcy and Insolvency Act (Canada) that provides for the payment of all or part of the student loans.

(4) When the individual’s loans become due and payable, the lender make take such measures as the lender considers advisable in the circumstances, including amending the consolidated loan agreement or collecting the loans.

General

Subrogation of the Crown

43. (1) If the Minister pays to a lender the amount of a loss sustained by the lender as a result of a student loan, Her Majesty in right of Ontario is subrogated in and to the rights of the lender in respect of the student loan.

(2) If Her Majesty in right of Ontario is subrogated in and to the rights of the lender in respect of the loan, then upon the subrogation the loan constitutes a debt to the Crown.

Payments by lenders to the Minister

44. If the Minister pays to a lender an amount in respect of a student loan, the lender shall remit to the Minister all amounts that may be collected or realized by the lender pursuant to the student loan agreement or consolidated loan agreement.

Effect of false statements

45. (1) If a service provider or lender discovers that a document pertaining to a student loan contains a false statement, the service provider or lender shall promptly report the matter to the Minister.

(2) Upon discovering that the document contains a false statement, the service provider or lender may take any action that he, she or it considers appropriate in the circumstances, with the approval of the Minister.

Officers authorized to issue certificates

46. The Deputy Minister of Training, Colleges and Universities and the Director, Student Support Branch, Ministry of Training, Colleges and Universities are authorized to approve loans under section 8 of the Act.

Authority of service providers

47. A service provider may act on behalf of one or more lenders in exercising rights and performing duties under this Regulation, if authorized to do so by each lender.

Commencement

48. This Regulation comes into force on August 1, 2001.