My Experience with The Student Loan Process in Alberta

Let me preface this to first say that I am not an expert by any means on the subject matter, namely how to apply for and receive an Alberta & Canada Student Loan. With that in mind I would like to share my recent experience going through the process of not only clearing up my previous unpaid student loan from 1997, but investigating the options and modern changes and applying anew. Starting August 8th, 2017, I will be attending The Academy of Learning Career College, at the downtown location. The course I’m going for is Immigration Consultant which will allow me to eventually help immigrant families and refugees coming to Canada. I have a strong connection to The Philippines, so my end goal is to work in the Canadian Embassy in Manila, and I see this course as an excellent path to my future life choices.

Student Loan Relationship
The relationship between you, Student Aid Alberta, the National Student Loan Service Centre, your Financial Institution and your place of learning.

Your Relationship to Your Student Loan

As far as I understand, in order for one to qualify for a Student Loan there are a series of systemic background checks in place to ensure one qualifies. One of these important checks is whether there are any outstanding, unpaid loans. Now, I admit, I am not perfect. Far from it. However I was a very bad boy in my younger days and I had gone to NAIT (Northern Alberta Institute of Technology) in 1997 for some upgrading courses and had taken out a student loan at that time. The bad thing is I had let it lapse, did not pay a single cent on it, and it went to a credit bureau and well you can imagine the consequences that go with it. Silly boy! Don’t fret. The Government of Canada and Alberta may not like these types of situations but they no longer send the boys with bats like the old days, they just tack on considerable interest! My original $2,293.20 loan from 1997 ballooned to $5,118.18 as of July 10th, 2017 due entirely to compounded interest! (Ah, the power of compound interest, a discussion for another day kids! :D) So… what did I do? I of course paid it off. Rather, I paid the original principal to the loan holder, which in my case was CIBC (Canadian Imperial Bank of Commerce). Yes, that’s right, you can make the offer to pay only the original principal of the highest attached loan (I had a smaller loan attached in the amount of $646.48 which I believe was the Canada Student Loan portion) and by making this payment in full it allowed CIBC to clear up my previous loan status.

How it worked in my case is CIBC, once confirming receipt of payment to the agreed amount, sent a Clearance Letter to the National Student Loan Service Centre. This clearance process is performed on a weekly basis, in other words, they send out their correspondence for these matters on a weekly basis in batch, so if you find yourself coordinating with a repayment officer at the bank, expect to have a bit of a delay before they even send out their clearance letter. Just a heads-up.

The Process

Presently as I write this article I am still waiting on NSLSC to confirm my Pending status has been cleared up before I can actually apply for a fresh loan, but the process and relationship as I understand it is as follows:

  1. Apply to Student Aid
  2. Check Status
  3. Check Requirements
  4. Loan Approval
  5. Disbursement

Apply to Student Aid

After carefully researching the requirements at Student Aid Alberta, I took the leap and registered my free student account, which allowed me to apply online (to check the amount I qualify for) and gain access to the Students Finance System (SFS). This portal is essentially a One Stop Student Shop for everything one needs in dealing with a student loan, whether that is checking the balance, making payment plans, interacting with support personnel and more. I must say, the powers that be behind the scenes have done a great job in creating this valuable resource, bringing it into the digital age and allowing seamless ease of use to access all the desired information. It is a FAR cry from the old days when one had to walk into various offices, the registrar, your bank, back to the office, etc etc. Very nice.

Check Status

The National Student Loan Services Centre keeps track of and will indicate your loan status throughout your entire life, because they tie this information into your Social Insurance Number (SIN). Thus, it is highly important to ensure all loans are paid on time when required, and to remain in good standing and communications with this agency, as it bears heavily on whether you are able to apply for future student loans. I learned this the hard way, but I have made amends and am back on track. The NSLSC reports to various governmental agencies such as Student Aid Alberta, and Canada Student Loans, as well as other financial institutions.

Check Requirements

Student Aid Alberta allowed me to apply online and check what I qualified for. One of the requirements is tied to income, but I strongly urge to carefully read and research all of the sections in “Before You Apply. After obtaining clearance and finding no issues from the NSLSC, Student Aid Alberta goes through a list of requirements you need in order to qualify. It is worth giving them a quick call if you have any questions, which I certainly did a few times to get my head around it all. 😀

Loan Approval

After satisfying the requirements it is my understanding that the approval process takes anywhere from a few business days (I’ve even heard reports of hours, depending on the personnel’s mood that day :), to a few weeks to finalize and approve the loan. Don’t worry, as long as your loan is in process, I have it on good authority (at least with The Academy of Learning) that most education institutions are fine for students to attend school on their first days, even if no funds have been received for tuition at that time. That is my understanding and this may vary from school to school, so I certainly advise to be in touch with the school administrators in any case.

Disbursement

Ok, loan is approved, Show Me The Money! Right? Well its not quite that simple. In reality a portion (typically 60%) is allocated up front in the first 30 days, paid directly to the loan holder bank or directly to the school. The remaining 40% is disbursed 2-3 months later. This is my understanding at this time and I have to do a little more digging to find out if this is actually true in most cases or not. As of this writing this is what I was told by the NSLSC.

Update, August 29th, 2017

Screenshot from Alberta Student Aid, showing the disbursement dates from Canada and Alberta student loan programs.
Screenshot from Alberta Student Aid, showing the disbursement dates from Canada and Alberta student loan programs.

Sorry for the delay, been busy studying! 😀 The screenshot above was taken from an email I was sent describing how my loan was to be disbursed. I just thought I should share.

Final Thoughts

I hope this makes sense so far. There is a dynamic at play here in that there are multiple partners to deal with if there are issues to be resolved such as outstanding loans and so forth. For absolutely new student loan holders I am certain it is even more straightforward in application and in terms of the overall process. I wanted to write this article so as to both educate future students and to clarify and crystallize the process for my own sake, and I will update this post as I gain more education too. (See what I did there?)

If you have any thoughts or wish to discuss this with me personally, feel free to send me an email!

Take care,

-Chris Simmons