LOANS ISSUED TO APPRENTICES BEFORE MARCH 2002

Responsibilities of having a Student Loan

Apprentices who received Alberta Student Loans for technical training MUST keep their loans in good standing and make payments according to terms and conditions of their loan agreement.

Student loans are registered with the credit bureau when the loan certificate is cashed. Repaying the loan allows the borrower to build a good credit history.

The apprentice who received a student loan to attend technical training must:

• notify EDULINX and/or the lending institution of all address changes
• understand the terms of the student loan
• make all loan payments on time
• if unable to make a scheduled payment, contact EDULINX and/or the lending institution immediately regarding options that may be available

If the borrower does not honour the terms of the repayment agreement:

• the loan will go into default and the Government of Alberta will take steps to recover the debt
• action by the Government could include reporting to a credit bureau, using a private collection company, taking legal action, or recovery through the borrower's income tax
• eligibility for future student loans will be affected

Interest free status

Apprentices are not required to pay interest on student loans as long as they are registered in an apprenticeship program with Alberta Apprenticeship and Industry Training, and attend the required technical training each year. In other words, the loan will remain in interest-free status until the apprentice completes the final period of technical training in their apprenticeship program or ceases to be a registered apprentice.

Alberta Advanced Education and Technology will notify EDULINX and/or the lending institution when an apprentice completes their final period of technical training or leaves their apprenticeship program prior to completion.

Loan repayment

The borrower is responsible for repaying the loan principal and interest over a period of time.

Payments begin 6 months after the apprentice completed their final period of technical training or left their apprenticeship program.

Interest accrues on the outstanding balance of the loan during this 6-month period.

Before the first payment is due, EDULINX and/or the lending institution will notify the borrower of the terms, payments and conditions of their loan repayment.

The borrower has the option of paying the interest or having it added to the outstanding loan balance to be repaid over the length of the repayment schedule.

The interest rate is a 'floating' rate of prime plus 2.5%. The rate will vary as the prime rate set by the bank changes. The borrower may request that interest be calculated at a fixed rate not to exceed prime plus 5%.