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Pay off your student loan

Partial exemption period

While you are studying, the government pays the interest on your student debt. At the beginning of the month following termination of or withdrawal from your studies, the government ceases to pay the interest on your student debt and you assume responsibility for it.

However, during the 6-month period immediately following the completion of or your withdrawal from your studies, you can benefit from a partial exemption, i.e., you do not have to begin repaying your student debt). You are responsible for the interest on your loan, but you can have it capitalized, i.e., converted into principal.

After that 6-month period, if you have not resumed your studies, you must begin repaying your debt (principal and interest).

Important! After that 6-month period, if you begin studying on a part-time basis, you must begin repaying the student loan debt contracted during your full-time studies, whether or not you are receiving a loan under the Loans Program for Part-Time Studies.

Source: http://www.afe.gouv.qc.ca/en/repayment/repayment/upon-completing-your-studies/

Interest rate

The interest rate is fixed during the partial exemption period, unless you have an agreement with the Desjardins Group Student Advisory Centre before the end of this period. As soon as the loan is consolidated, the interest rate becomes variable. The variable interest rate is equal to Desjardins prime rate plus 0.50% and is set by Aide financière aux études. Go to the Aide financière aux études (AFE) website to find out what the interest rate payable during the partial exemption period is.

Learn more
See also Is the interest tax deductible?

To do so, you must conclude a repayment agreement with the Desjardins Group Student Advisory Centre before the end of the partial exemption period. Find out why it is important to contact us:

BEFORE the end of the partial exemption period

You must conclude a repayment agreement with the Student Advisory Centre. The agreement terms are based on your financial situation and ability to pay off your debt within the maximum amortization period allowed for your balance.

The Student Advisory Centre advisor can help you determine the following:

  • payment frequency (weekly, every 2 weeks or monthly)
  • amortization period (total repayment period) based on certain criteria
  • etc.

You will receive a copy of the repayment agreement by mail or email. No signature is required.

AFTER the partial exemption period

The Student Advisory Centre automatically sends you a repayment agreement. The terms are based on your loan balance. The first payment is due 1 month after the agreement has been sent.

Contact a Student Advisory Centre advisor to make necessary changes to your repayment agreement (e.g., changes to the terms, payment date, payment amount), make an early repayment or inform us of particular circumstances.

Contact a Desjardins Group Student Advisory Centre advisor.

Learn more
Facing financial difficulties? See Deferred Payment plan.
See also Student loan repayment strategies.

Under the Act respecting financial assistance for education expenses, the interest paid on Government Guaranteed Student Loans is tax deductible. This deduction is provided by way of non-refundable provincial and federal tax credits.

Provincial government

To claim an amount or carry an amount to a future year, fill out Schedule M and enclose it with your income tax return. Also, enclose proof of the interest payments for the taxation year.

Federal government

You can claim an amount only for the interest you have not previously claimed. If you have no tax payable for the year the interest is paid, it is to your advantage not to claim it on your tax return for that year. You can simply carry the interest forward and apply it on your income tax return for the next 5 years.

Where can I find the amount of interest paid on my student loan?

The information regarding the interest paid on your student loan can be found on your account statements.

If you are a member and you:

  • Get a hard copy of your monthly account statement:
    Keep the December account statement of the taxation year in question.
  • Get your monthly account statement on AccèsD:
    Print out the December account statement of the taxation year in question.
  • Have a Desjardins passbook:
    Keep the annual statement Desjardins sends you at the beginning of the year.

Preferred payment frequency

We recommend that you opt for accelerated weekly or bi-weekly payments.

Example of accelerated payment savings:

  Regular payment Accelerated bi-weekly payment
Loan balance $10,000 $10,000
Interest rate1 4% 4%
Repayment term $101.25/month $50.63/2 weeks
Term 10 years 9.03 years
Interest paid $2,150.00 $1,916.85

By opting for accelerated bi-weekly payments, you can save more than $230 in interest and reduce your amortization period by 1 year.

Early repayment of your student loan

Before making an early repayment, we recommend that, if you hold other loans (e.g. personal or auto loan), credit cards or lines of credit, you verify the interest rate of each credit product you hold and pay off the credit product with the highest interest rate.

Because student loans have very attractive interest rates and the interest paid is tax deductible, it is to your advantage to prioritize debts bearing the highest interest rates and pay off your student loan afterwards. Feel free to contact your caisse advisor to find out more.

The Deferred Payment Plan is offered by the Aide financière aux études du Québec (AFE) to, among others, Desjardins members having problems paying off their student loan.

Through the plan, you can defer payment2 of your student loan or pay a monthly amount that accounts for your income and family situation for a 6-month period. A monthly payment calculation simulator for the Deferred Payment Plan is available on the Aide financière aux études site. The simulator allows you to see if you qualify for the DPP and estimate the monthly repayment instalment required to reduce the balance of your student loan, if applicable.

You can benefit from the plan for a lifetime total of 60 months over the 10 years following the end of your partial exemption period (end of the 6-month period following the completion of your studies).

Learn more - Deferred Payment Plan

  1. Fictitious interest rate. Student loan rate = variable rate.
  2. If the loan is covered by Desjardins Financial Security's Loan Insurance, the premium is due during the Plan's qualifying period. To learn more, contact the Desjardins Group Student Advisory Centre.

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