PSA: pay off the Ontario portion of your OSAP (currently at 7.45% interest)!!!

[ninasreborn1]

Currently cleaning up my finances and paying down all debt, only to remember about the one loan I never “worried” about (other than monthly minimum payments). Having just paid off a 3.45% LOC, it hurt my heart to see the 7.45% Ontario loan not get prioritized first. Alas, when we know better, we do better. So if you forgot about OSAP, best to try and tackle it as it is no longer a low interest debt. Then you can go back into minimum payment ignorance for the 0% Federal portion.

Credit to /@random1234 for sharing how to pay off just the Ontario portion of OSAP loans:

1. Write a Cheque to “National Student Loans Service Centre” making sure to include:
2. balance + interest accrued
3. loan number
4. Write a Letter of Authorization addressed to the NSLSC Something along this template

“From:
(Your Name Here)
(Loan Number:#-######)
123 Anywhere Street
Somewhere, ON
A1B C2D

To:
National Student Loan Service Centre
P.O Box 4030
Mississauga, ON
L5A 4M4

To Whom It May Concern,

Please accept this cheque made payable to “National Student Loan Service Centre” as payment toward the Provincial Portion of my student loan
(Canada-Ontario Integrated Student Loan:#-######) for $X.

Furthermore, if any amount is leftover, please be sure to apply to the federal portion of the Student Loan.

Sincerely,

(Your Name Here)”

1. Mail both to:
   National Student Loans Service Centre
   P.O. Box 4030
   Mississauga ON
   L5A 4M4

Update #2 - My provincial loan overpayment was applied to the federal portion successfully. Not that it matters that much because federal loan is 0% but both the provincial loan and overpayment transferred to the federal portion shares the same posted date.

Update #1 - mailed in my cheque on Jan 3, cheque cleared Jan 11, checked on NSLSC and it was applied correctly to the right loan. Since I overpaid the Ontario portion to cover interest accrued during the mail-in, I have a negative balance on that side that will hopefully be transferred to the Canadian portion soon.

 

[mattbela]

@ninasreborn1 I paid off my provincial portion earlier in the fall, it was a big weight off my shoulders.

Thanks OP for doing a write-up guide, I'm sure it will help a lot of people. It took me a while to research the convoluted process and figure it out on my own earlier this year.

 

[ninasreborn1]

@mattbela I can’t wait to be in your shoes in two or so weeks!! How much buffer did you put in the amount?

 

[mattbela]

@ninasreborn1 I did something similar to @solareclipse. I want to say my provincial loan was approximately $5950, however I sent a bank draft for $6000 to cover my outstanding interest. The remaining balance was immediately applied to my federal loan.

 

[solareclipse]

@ninasreborn1 I did an extra $50. Website says it takes up to 5 business days to process. So assuming a week to get there, a week to process; you're looking at two weeks of interest. I just went high to be sure, any additional going to federal.

 

[random1234]

@ninasreborn1 I'm really glad to see everyone making use of this info. It also definitely feels weird to see myself get credited in someone else's post lol.

 

[ninasreborn1]

@random1234 Thanks to you a bunch of us will be saving money

 

[solareclipse]

@random1234 I wasn't expecting to pay this much right now, but I'll take the short term pain for the long term financial health. Hadn't even thought about it until your info and this post. So thanks!

 

[giwpy]

@random1234 Thank-you Shaskool2142 I paid it off too this month going through posts from the past year from you and others. Fuck you DoFo.

 

[mhcapa1]

@random1234 Is there a way to pay the provincial portion electronically/over the phone or must it be by cheque?

 

[dxblorna]

@random1234 You’re a legend! Thank you!

 

[flaminggazelle]

@ninasreborn1 I heard about this in October and called up the NSLSC. Turns out, at the time, the Ontario portion of my loan had a balance of $1.18 while the interest rate suspended (to March 2023) federal portion still had a large balance remaining.

I have no idea how I paid off the Ontario portion without sending a letter.

 

[ninasreborn1]

@flaminggazelle Hmm interesting! This would make sense if they prioritized the portion with the higher interest but I always thought the payment covered interest first then the rest to total principal amount.

 

[flaminggazelle]

@ninasreborn1 I still believe that's the case. My completely made up theory is that I received an Ontario Grant (?) some time ago without realizing which paid down a portion of my Ontario loan. Over time, however they split payments, I ended up paying the balance of the provincial portion.

 

[victoryj]

@flaminggazelle Payments go 80% towards the federal portion and 20% towards the Ontario portion.

 

[asmodea]

@victoryj I'm pretty sure that this depends on the proportion of your loan that is federal and Ontario. I can't find an Ontario specific reference but BC student loans are also integrated with federal loans and their website says,

Please note that your payments will be prorated to your Canada and BC student loan debt, based on each loan’s portfolio outstanding balance.

 

[victoryj]

@asmodea That's what the OSAP person told me when I called and asked how to pay off the Ontario portion. 80-20, only way to pay off the Ontario portion separately is to send a cheque in the mail.

 

[asmodea]

@victoryj If 80% of your outstanding loan is federal and 20% is Ontario then yes, that is how they will apply your monthly payments and also (if you don't tell them otherwise) how they would apply lump sum payments.

 

[debbie_s]

@ninasreborn1 Good on you OP for outlining this for others. I cannot for the life of me understand why it would be this difficult to pay off a specific part of your student loan when the interest rates are so different. It feels borderline criminal that Ontario doesn't make it easier to pay just the provincial portion.

 

[ninasreborn1]

@debbie_s Agreed!! Most of our government processes are still in the stone ages