Education
January 31, 2007

Integrated Collections Process Set to Begin 

In a move designed to better improve service to students who are experiencing difficulty repaying their student loans, the provincial government has agreed to an integrated collections process with the federal government.  Effective February 1, students who default on their student loans will now be contacted by only one agency � the federal government � and will have just one repayment plan for both their federal and provincial student loans. 

A loan is considered to be in default status when payment has not been made for nine months, or 270 days.  �We must continue to make every effort we can to assist students with repayment,� said the Honourable Joan Burke, Minister of Education.  �We know that repaying this money can be burdensome on new graduates.  However with this improved process, students should find it easier to work out a repayment plan for loans in default.� 

In February, 2004, the federal and provincial governments announced a loan integration agreement to streamline services for students such as single applications and a single point of contact for students when they have inquiries about their loans.  This collaboration between governments is resulting in better service for student borrowers. 

The new collections process does not apply to students in school, in repayment, or those who defaulted prior to February 1, 2007.  The minister also noted that while the federal government is assuming responsibility for collections, the Department of Education will ensure that appropriate collection policies and procedures are followed. 

�It is important to recognize that most of our students are honouring their student loan contracts and are repaying loans.  It is our responsibility to ensure that all students are treated equally.  Through a streamlined process, students who have defaulted should find it easier to make payments as they will only have to work out one repayment plan,� said the minister. 

Newfoundland and Labrador has one of the best student aid packages in the country. Some recent initiatives aimed at reducing student loan debt include a three-year tuition freeze, an increase in student loan limits and an increase in debt reduction grants. Government has also increased the income threshold to qualify for interest relief by five per cent, and eliminated the claw back of the Student Loan Shelter Allowance for students with dependent children in receipt of income support. 

Contact numbers for students in default after February 1, 2007 are as follows: 
English:  1-866-336-7565
French:  1-866-336-7566
Overseas:  613-248-4463 

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Media contact:
Jacquelyn Howard
Director of Communications
Department of Education
709-729-0048, 689-2624
jacquelynhoward@gov.nl.ca  

2006 01 31                                                        10:10 a.m.


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