Canada Student Loans Regulations

16.3 (1) Whether or not the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), the annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subsection 4(2) or (4) of the Act applies is the maximum floating rate of interest in effect on that day, and is applicable for the period

• (a) commencing on the first day of the month after the month in which the borrower ceased to be a full-time student, and

• (b) ending on the earlier of

  • (i) the last day of the sixth month after the month in which the borrower ceased to be a full-time student, and

  • (ii) the day before the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2).

(2) The annual rate of interest payable by a borrower to a lender on any day on a full-time guaranteed loan to which subparagraph (1)(b)(ii) applies is the rate of interest determined in accordance with subsection 16.4(1), and is applicable for the period

• (a) commencing on the day on which the borrower enters into a consolidated guaranteed student loan agreement pursuant to subsection 7(1) or (2), and

• (b) ending on the last day of the sixth month after the month in which the borrower ceased to be a full-time student.

(3) Subject to subsection (4), the aggregate amount of the interest accrued pursuant to subsections (1) and (2) shall become payable on the last day of the seventh month after the month in which the borrower ceased to be a full-time student.

(4) Unless the borrower agrees to pay the full amount of the interest accrued pursuant to subsection (1) together with the borrower's first instalment referred to in paragraph 8(7)(a), that interest shall be added to the principal amount of the full-time guaranteed loan

• (a) where the borrower enters into a consolidated guaranteed student loan agreement within the period referred to in subsection 7(1) or (2), on the day on which that agreement is entered into, and thereafter shall be treated as prescribed by section 16.4; or

• (b) where the borrower fails to enter into a consolidated guaranteed student loan agreement within the period referred to in subsection 7(1) or (2), on the day after the end of that period, and thereafter shall be treated as prescribed by section 16.4.

(5) Nothing in this section shall be construed as preventing the lender and the borrower from agreeing to an annual rate of interest that is lower than the rate prescribed by subsection (1) or (2).