Glossary
Affordable Payment
Under the Repayment Assistance Plan, an affordable loan payment is calculated based on family income and family size and cannot exceed 20 percent of the borrower's income. Borrowers are eligible for repayment assistance if their affordable loan payment is less than their required payment.
Amortization Period
The amortization period is the length of time it will take to pay off the principal and interest of a loan.
Apprenticeship End Date
12 months after the last day of your last period of technical training OR 12 months after the date your province or territory confirms your registration as an apprentice. The Apprenticeship End Date is not fixed and can be extended several times as long as you remain a registered Red Seal apprentice.
Block Release Technical Training
A method by which apprentices are released by their employers to attend in-class technical training for a specified period (block) each year, usually 6 to 8 weeks.
Canadian Citizen
A person who possesses Canadian citizenship by birth or through the naturalization process under the Canadian Citizenship Act.
Capitalization of Interest
Interest is capitalized when unpaid interest amount is added to the principal of a loan.
Credit Check
A credit check is completed for all first-time applicants regardless of their age. An applicant would fail the credit check if:
- In the 36 months before applying the applicant missed payments on at least three debts;
- Each debt was higher than $1,000; and
- Each debt was more than 90 days overdue.
Credit Rating
This is a rating created by authorized credit agencies. It is based on a person's credit history.
Default
A Canada Apprentice Loan is considered to be in default when you are behind on your payments for nine or more months and collection action is required. Defaulting on your loan can disqualify you from future apprentice and student financial assistance and from repayment assistance. If your loan is in default, you will need to ask for rehabilitation to bring your loan back into good standing. If you default on your loan, the Government of Canada will take steps to recover the debt. These steps may include: redirecting any income tax or GST/HST refunds to pay your apprentice loan, reporting you to a credit agency or taking legal action.
Disability-Related Expenses
Disability-related expenses are uninsured expenses that a borrower may have that are directly related to his or her disability. These disability-related expenses may have an impact on the eligibility for the Repayment Assistance Plan for Borrowers with Disabilities or on the amount of the affordable payment.
Exceptional Expenses
Exceptional expenses are those that result from unforeseen and unavoidable circumstances beyond the control of the applicant and, if applicable, the applicant's spouse or common-law partner, and include expenses that are not covered by an insurance plan or a private or publicly funded program (e.g. a provincial disability support program). These expenses may reduce an applicant’s monthly gross family income amount used to adjudicate for the repayment assistance plan.
Fixed Rate
This is a stable rate of interest. If you opt for a fixed rate on your loan, you will be charged the same interest rate throughout your repayment period. The fixed interest rate for Canada Apprentice Loans is the Prime Rate plus 2.0%.
Gross Family Income
This is your family income before taxes.
High School Student
Individuals enrolled as regular full-time high school students with the exception of individuals enrolled in adult learning or professional upgrading classes.
Interest Amount
This is interest that has accumulated on the principal of a loan but has not yet been paid.
Interest Rate
This is the fee you pay to borrow money. Interest is calculated as a percentage of the amount borrowed. Your Canada Apprentice Loan is interest-free. However, you are still responsible for paying any interest that may have accrued on your loan before April 1, 2021.
Payment-free Status
While you are in technical training or have been confirmed that you continue to be a registered apprentice in a Red Seal trade apprenticeship program, you do not need to make payments on your loan.
Loan Number
This is the unique number assigned to your Canada Apprentice Loan.
Non-repayment Period
The non-repayment period is the first six months after your last confirmed apprenticeship end date. During this period, you are not required to make payments.
Outstanding Loan Balance
The principal amount of your Canada Apprentice Loan outstanding at any time, together with all interest on this amount.
Permanent Disability
Any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment – or a functional limitation – that restricts the ability of a person to perform the daily activities necessary to participate in an apprenticeship program or in the labour force and that is expected to remain with the person for the person’s expected life.
Note: This information is necessary if you wish to be assessed for the Repayment Assistance Plan for Borrowers with Disabilities.
Permanent Resident
A person who has been given permanent resident status by immigrating to Canada, but is not a Canadian citizen. Permanent residents are citizens of other countries.
Persistent or Prolonged Disability
Any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment – or a functional limitation – that restricts the ability of a person to participate in an apprenticeship program or in the labour force and has lasted, or is expected to last, for a period of at least 12 months, but is not expected to remain with the person for the person’s expected life.
Power of Attorney
A power of attorney gives someone the authority to act on another person's behalf. For the purposes of the Canada Apprentice Loan, a borrower may wish to, or be required to, give power of attorney to another person if they are not able to manage their own apprentice loans.
Prime Rate
The variable reference rate of interest as calculated by Canada, based on the average of the middle three of the largest five Canadian financial institutions’ prime rate.
Principal Amount
The principal amount is the amount of the apprentice loan that you borrowed, or the amount still owing, excluding interest charges.
Protected Person
A person who has reason to fear persecution in his or her country of origin due to race, religion, nationality, membership in a social group, or political opinion can be designated as a protected person by the Immigration and Refugee Board and Citizenship and Immigration Canada.
Province/Territory of Registration
The provincial or territorial apprenticeship authority that you are registered with for the purposes of completing your Red Seal Trade apprenticeship program, the authority that assigns your apprenticeship registration number, and confirms your ongoing status as a registered apprentice.
Red Seal Trade
An eligible trade designated by your province/territory of registration and recognized by the Interprovincial Standards Red Seal Program.
Red Seal Trade Apprenticeship Program
A program of practical experience, technical training and certification examination that must be undertaken by an apprentice in an eligible trade.
Rehabilitation
Loan rehabilitation gives the borrower the opportunity to bring a defaulted apprentice loan out of collection and back into good standing.
Remaining Term
The number of months left to pay your loan in full at the current monthly payment amount. When customizing your repayment terms, your remaining term will decrease when you choose to increase your monthly payment and increase when you choose to decrease your monthly payment.
Repayment Assistance Plan
If approved for the Repayment Assistance Plan, you may not need to make payments for six months, or you could be approved to make reduced payments, with the government covering some or all of your interest, so more of your payment is applied to your loan principal. In some cases, the government may repay some of your loan principal as well.
Repayment Start Date
This term refers to the act of moving your loans from Non-Repayment status to Repayment status. Repayment starts on the 1st day of the 7th month after your last confirmed Apprenticeship End Date.
Required Payment
Under the Repayment Assistance Plan, a required payment is the monthly amount needed to ensure that a borrower's student loans are completely paid off within 10 or 15 years from their last confirmed apprenticeship end date, depending on which stage of the Plan the borrower is applying for. Borrowers are eligible for the Repayment Assistance Plan if their affordable loan payment is less than their required payment.
Revised Monthly Payment
This is the amount you are required to pay each month on your Canada Apprentice Loan if you are approved for Repayment Assistance.
Revision of Terms
You can change the amount of your monthly payments by increasing or decreasing them to make them more manageable for you. This is called a Revision of Terms. If you want to reduce, or increase your payment, you can request a Revision of Terms once your loan enters repayment.
Severe Permanent Disability
This is a functional limitation caused by a physical or mental impairment that prevents a borrower from performing the daily activities necessary to participate in an apprenticeship program and in the labour force and is expected to remain with them for their expected life.
Tax Credit
An income tax credit directly reduces the amount of income tax paid by reducing the taxable amount due. Apprentices who are repaying their Canada Apprentice Loans receive a tax credit on all interest paid during the past calendar year.
Technical Training Provider
This is the institution, such as an educational institution, employer or union hall that you attend to complete your in-class technical training, including the campus/location of the institution.
Total Amount Owing
The total amount to be repaid, including principal and interest. During your six-month non-repayment period, no interest accrues and the total amount will include only the principal amount.
Variable Rate
A variable (floating) rate is a rate of interest that varies over time with the Prime Rate. If you opt for a variable rate, the interest you are charged during the repayment of your loan will increase or decrease along with fluctuations in the Prime Rate. The variable interest rate for Canada Apprentice Loans is equal to the Prime Rate.