Department of Education - Student Assistance

How Loan Amounts are Determined

Introduction

Nova Scotia Student Assistance uses a classification system to determine who, along with the student, is principally responsible for his or her educational-related costs and therefore, who must fill out and sign a section of the student's application. For example, married students are expected to have support from his or her spouse, and the spouse will be required to supply information about his or her income, etc. All information provided on the student's application is then taken into consideration when calculating the amount of loan(s) the student is entitled to receive.

Determining your student category:

There are four student categories. Most Student Loan applicants fit into the Single Dependent Student category. Once you've figured out your student category, you can then determine if you can be considered a resident of Nova Scotia.

We process your loan application based on your student category as of the first day of the month in which your classes begin. For example, if your classes begin on September 15, 2008 and you will be married on August 28, 2008, you must apply for a loan as a Married Student because your category on September 1, 2008 would be married.

Single Dependent Student

A Single Dependent Student is considered financially dependent on a parent, step-parent, guardian, sponsor or other supporting relative. You are a Single Dependent Student UNLESS you fit into one of the other three categories.

Single Independent Student

You are a Single Independent student if you meet ONE of the following conditions:

you have no parent, guardian, sponsor or other supporting relative OR
you have been out of high school for four years OR
you have two periods of 12 consecutive months each when you were not a full-time student OR
you are widowed, separated or divorced and are not the custodial parent of any children OR
you are a ward of a government agency.

Same-sex relationship, Common-law and Married Students

For Nova Scotia Student Loan purposes, you are living in a common-law or same-sex relationship if (a) you filed your most recent Income Tax Returns as a common-law couple OR (b) you and your partner have been living in a conjugal relationship and are raising any children of whom you both are the natural or adoptive parents.

Your spouse is expected to contribute financially. The amount of your loan will reflect this contribution, whether or not your spouse actually contributes. If your marriage, common-law relationship or same sex relationship ends, your category becomes either Single Independent Student or Single Parent Student. This change in your status is made on the 91st day after you separate. Once you prove your status has changed, the change will become back-dated to when your relationship ended.

Single Parent Student

This category is only for single students who are custodial parents. This includes parents who have

legal custody and full responsibility for support
shared custody and shared financial support. Your loan entitlement reflects how much time your children actually live with you. For example, if your child lives with you for 50% of each month, you can claim 50% of the actual child care costs.

Even though you may financially support your child, and your child visits you, you do NOT fit into the category of Single Parent Student UNLESS you are the custodial parent.

Once your student category has been determined, our office then determines whether or not Nova Scotia is your province of residence. The reason we need to determine residency is because your resident province is the province in which you apply for student loans.

Determining if Nova Scotia is your province of residence

Residency for Single Dependent Student

As a Single Dependent Student, you are considered a resident of Nova Scotia if any ONE of the following conditions applies to you:

your parents, guardian or sponsor have lived in Nova Scotia for at least 12 consecutive months before the first day of the month in which your classes begin. If a parent, guardian or sponsor works outside Nova Scotia, you are considered a resident of the province where the family home has been maintained for 12 consecutive months OR

your custodial parent has lived in Nova Scotia for at least 12 consecutive months before the first day of the month in which classes begin or, if there is no custody agreement, the parent with whom you normally reside has lived in Nova Scotia for at least 12 consecutive months before the first day of the month in which your classes begin OR

you remain in Nova Scotia to begin or continue your post-secondary education even though your parents move elsewhere (provided your parents lived in Nova Scotia for at least 12 consecutive months prior to moving) OR

Nova Scotia is the last place your parents lived for 12 consecutive months before moving to another country.

Residency For Single Independent Students

As a Single Independent Student, you are considered a resident of Nova Scotia if any ONE of the following conditions applies to you:

Nova Scotia is the most recent province in which you have lived for 12 consecutive months. During this time you cannot have been a full-time student OR

you have already established residency here as a Single Dependent Student and have not spent 12 consecutive months in another province other than as a full-time student.

Residency For Married Students

As a Married Student, you are considered a resident of Nova Scotia if any ONE of the following conditions applies to you:

Nova Scotia is the most recent province in which you have lived for 12 consecutive months. During this time you cannot have been a full-time student OR

you were a resident of Nova Scotia before you got married and since then have not lived in another province for 12 consecutive months while not a full-time student OR

your spouse is also a full-time student in Nova Scotia and one of you is a resident of Nova Scotia. Send in your applications together.

If your spouse is not a full-time student and you are not a resident of Nova Scotia (you have not spent 12 consecutive months here while out of school) you may still apply to Nova Scotia for a Student Loan if:

your spouse has worked full time in Nova Scotia for 12 consecutive months (Full-time work means working at least 30 hours a week) OR

your spouse was a resident of Nova Scotia when he or she was a Single Dependent Student and has not lived in another province for 12 consecutive months while not a full-time student.

Residency For Single Parent Students

As a Single Parent Student, you are considered a resident of Nova Scotia if any ONE of the following conditions applies to you:

Nova Scotia is the most recent province in which you have lived for 12 consecutive months. During this time you cannot have been a full-time student OR

you have already established residency here as a Single Dependent Student and have not spent 12 consecutive months in another province other than as a full-time student OR

you have established residency in Nova Scotia based on your spouse's employment here while you were married and you remain in Nova Scotia to study after the relationship ends.

Basic formula

The amount you can borrow depends on your need. This need is calculated by taking your allowable costs and subtracting your resources. Loan awards can never be greater than the maximum loan available. Costs and resources are calculated for your Pre-study and Study Period.

Calculating your allowable costs

Tuition and Student Fees - The actual amount charged by the school will be allowed. Processing of applications may begin before schools have finalized their fees. If this happens, your application will be processed on last year's fees and automatically updated once the school notifies us of any change.

Books/Instruments/Related Computer Costs - Up to $1300 a year (regardless of the actual amount you are required to pay).

Living Costs - Includes food, shelter, transportation and miscellaneous expenses. See Table A for the rates. The rate depends on:

which province/country you will be living in

whether you are at home (with parents or spouse) or away

if you have dependents

NOTE - Single Dependent Students and Married Students will be assessed with the living at home costs if the parents or spouse lives within commuting distance of the educational institution the student is attending.

Return Transportation - If you are living away from home, two return trips are allowed annually between your home in Nova Scotia and the institution, to a maximum of $1,200 per year, or $600 per semester.

Child Costs - additional costs are allowed for dependents of single-parent students and married students. See Table A.

Child Care Costs - Child care costs are allowed for children 11 years and under if there is no parent at home. (For example, child care costs are not allowed if one parent is home unemployed or studying by correspondence). If you have child care for a child over age 11 with a permanent disability, include a letter from your doctor ONLY if you have not already sent one, verifying that the child needs daily care.

All files are subject to audit. To prove child care costs, if audited, you must provide cancelled cheques or copies of money orders or a letter from the licensed day care. If you are unable to provide this information the cost will be disallowed and may result in overawards.

Alimony and Maintenance - considered exceptional expenses; the lesser of the amount legally required, or the amount actually paid will be allowed.

All files are subject to audit. If audited, you must send proof of the alimony/child support payments - for example, a copy of the court order or agreement and proof that you are making the payments. (i.e., cancelled cheques or money orders)

You must send a photocopy of your legal separation agreement, divorce decree, or court order confirming monthly payment, and, if any, verification payment is being made ( for example, a cancelled cheque).

Who You Can Claim As a Dependent

You can claim anyone Revenue Canada accepts as a dependent on your Income Tax Return. If you are a dependent student, your parents can claim anyone Revenue Canada accepts as a dependent. Dependents include children who are:

18 or under and who are wholly dependent on the student or spouse for support and for whom the student has, by law or in fact, the custody and control; or

19 years of age or older and are in a full-time program at a post-secondary institution and who fit into the Single Dependent Student category , or

19 years of age or older, who live at home at least 51% of the time, and who, even if not in school, fit into the Single Dependent Student category described here.

Calculating your resources

You are expected to make a contribution from any income you receive during your Pre-Study and Study periods. You must report all sources of income on your application. Depending on the source of income, a percentage of the amount will be taken as a resource. Example

Income means income from all sources before deductions. It includes, but is not limited to the following:

employment earnings
business earnings
investments
pension income
gifts, lottery receipts
payments received from any social service agency
sponsorships and training allowances
insurance benefits
employment insurance (EI)
alimony and maintenance received

During the study period, income also includes scholarships, awards, etc.

These sources are NOT included as income - Income Tax refunds, child tax credits, property tax credits, GST rebates and any other tax credits.

Most students apply for assistance long before they have finished their pre-study job and before they know for certain if they will have a job or scholarship while they are in school. Therefore, applications are not finalized on the first assessment. As well, only Canada Student Loan is issued on your first assessment. If you were unable to save the assessed Pre-study contribution and/or your need is greater than the Canada Student Loan issued, you will need to send in a Pre-study Report once you begin classes. This form is used to confirm your income during the pre-study period and update your sources of income while you are in school. Until this form is processed, Nova Scotia Loan, Study Grants and additional Canada Student Loan will not be issued.

Pre-Study contribution

On the first assessment, a minimum contribution will be assessed from your pre-Study period. On this assessment, we assume all students live at home, earn minimum wage, and work full time for their entire pre-study period. If you estimate an income greater than minimum wage on your application, an additional pre-study contribution will also be calculated.

When you send your Pre-study Report, your application will be reassessed and your contribution from that period will be recalculated based on your actual income and where you were living. If you are a Dependent or Married Student, you will continue to be assessed as living at home during the pre-study period if your family/spouse lives within commuting distance of where you worked.

Click here to see an example of how a Pre-Study contribution is calculated.

Study Period Contribution

A contribution will be calculated from your income during your study period. Depending on the source of your income, either 80% or 100% of the income, after Income Tax, Canada/Quebec Pension and Employment Insurance premiums are deducted, will be calculated as a minimum contribution. Example

If you have investments, these are also considered part of your resources. Exception:

If you were in the work force and made RRSP contributions during that time, you may be eligible for a $2000 exemption for each of those years. To be eligible, you must claim the full value of the RRSP's, send proof of the amount and the date you purchased the RRSP's, during your Pre-study or Study period, or state the amount you will be withdrawing. The amount you will be withdrawing will be included in your resources.

Spouse's contribution for married students

If your spouse is not a full-time student, a minimum contribution is calculated based on provincial minimum wage and average weekly hours, less Income Tax, Canada/Quebec Pension and Employment Insurance premiums. If the income is greater than the minimum contribution, an additional contribution will be added. The additional contribution will be 80% of the amount that exceeds the minimum contribution.

If both you and your spouse are full-time students, no minimum study period contribution is calculated. 80% or 100% of the income (depending on the source) after deductions, is calculated as a study period contribution.

Parents' contribution

For dependent students "Parents" include parents, step-parents, legal guardians, sponsors, and common-law partners of the "Parent". Your parents are expected to contribute to your education based on the family size, income, the number of dependents attending post-secondary school and the length of your study period.

The 2004 Budget announced that the Canada Student Loan Program will extend loan eligibility to more middle-income familes by reducing the amount that parents are required to contribute. The will increase access to Canada Student Loans for students from families with incomes of $60,000 to $100,000 range, many of whom were not able to access student loans before.

If your parents are separated or divorced:

You must provide the information for the parent who has custody of you. If neither parent has custody, provide the information for the parent with whom you reside. If you are living away from home, provide the information for the parent with whom you would normally reside with if you were living at home.

If this is the first time you are applying for a Student Loan, you do NOT need to send documents to prove your parents' marital status. If you applied before and your parents' marital status has changed since your last application, you must send a copy of the separation/divorce papers confirming which parent has custody and the amount, if any, the non-custodial parent has agreed to contribute towards your educational expenses. Their contribution will be added to your resources when your need for assistance is assessed.

If your parents are remarried:

If you were under 18 when your custodial parent remarried, or entered into a common-law relationship, you must also provide the financial information for your stepparent.

Your parents' contribution is calculated from their 2007 income as reported on their Income Tax Returns. They must fill in the line numbers from their tax return on your application. You DO NOT need to send a copy of the returns. The tax release they sign allows the Student Assistance Office to request this information electronically from Canada Customs and Revenue Agency (formerly Revenue Canada).

If you would like to use our on-line software to calculate a parental contribution, please click here*.

*Under construction: As a result of recent provincial announcements regarding changes to the way in which the Parental Contributions are calculated, this section of our site is not yet functional

If your parents' 2008 income is lower than 2007

The parental contribution can be reassessed on the reduced income if your parents' combined total income for 2008 will be less than their 2007 income. There are two ways our office can reassess the parental contribution:

All 2008-2009 applications are based on the parent's 2007 Income Tax information. We can initially process your application using your parent's 2007 Income Tax information, then reassess the file based on their actual 2008 income, once the Income Tax Returns are completed. The deadline for most students to submit this information is March 15, 2009. Note: if your study period ends before April 30, 2009, contact the Student Assistance Office for the deadline and the information you need. Remember, we cannot issue awards after the end of your study period.

If your parents' 2008 income is drastically reduced and you need assistance before their 2008 Income Tax Returns are prepared, you may request a partial award based on the estimated income. You will need to send in proof (from all sources) of both parents' 2008 incomes to date, with a projection of income to December 31, 2008. You must verify both parents' incomes, even if one parent's income is unchanged in 2008

Your award will not be finalized until photocopies of the 2008 Income Tax Returns are submitted. If the Income Tax Returns confirm a higher income than estimated, you may end up with an overaward.

Education and Scholarship Trust Fund

If your parents have established an education or scholarship trust fund for you, the parental contribution will be the amount assessed under the Student Assistance program, or the annual amount available from the trust fund, whichever is greater.

Impact of withdrawal from classes

You must advise our office if you withdraw from or stop attending classes. The amount of loan you are eligible to receive will be recalculated based on the actual time you were in classes. In most situations you will have received more loan than you are were entitled to receive.

If you withdraw or stop attending classes, you should use any remaining loans you may have to immediately pay down your student loan. This will help reduce your overawards.

You will be charged interest on your Canada Student Loan immediately, you will charged interest on your Nova Scotia Student Loan in 6 months. You must begin to repay both loans in 6 months.

A withdrawl form must be completed by your school and returned to our office. This form can be found on our website under Download Forms.

You will also have a "probation" placed on your file.

Impact of reducing your course load

Students taking less than 60 per cent of a full-course load are considered by Nova Scotia Student Assistance to be studying part time. As soon as you decide to study part time you should contact our office. Reducing your course load to part time means that you have withdrawn from full time studies. Please refer to the Impact of withdrawal from classes. Once your course load drops below 60 per cent you are required to repay your Canada and Nova Scotia Student Loans six months after you start studying part time unless you are approved for interest relief. Contact your lender an approved bank to see if you are eligible for the Canada and/or Nova Scotia Interest Relief Programs.

In addition, you may have an overaward because you were awarded more loan than you are now entitled to receive. Therefore, your loan amount will be reassessed to reflect the lower amount of tuition charged. If you change to part-time studies, you should use any remaining loans you may have to immediately pay down your student loan. This will reduce the amount of overawards you are going to have.

Overawards

If your need is reduced after the first assessment, an overaward may be calculated. An overaward is the amount of loan or grant you would not have received if this information had been on your first assessment. For example, if you receive a scholarship or get a part-time job after you negotiate your loan. Overawards may also be calculated if your costs decrease after your first assessment (ie.,you withdraw and therefore attend fewer weeks).

If there is a discrepancy between the income reported to our office and the income information received from Canada Customs and Revenue Agency (formerly Revenue Canada), your application will be reassessed. Unreported resources will result in an audit and possible legal action.

Repaying Overawards

Nova Scotia Student Loan Overawards

Contact:

The Royal Bank (toll free: 1-800-565-1446)

Canada Student Loan Overawards

National Student Loans Service Centre

Public Institutions Division
P.O. Box 4030
Mississauga, Ontario
L5A 4M4
Toll Free: 1-888-815-4514 (within North America)
TTY: 1-888-815-4556
Countries outside of North America: dial international access code + 800 2 225-2501 (toll free)
Countries outside of North America without an international access code: call the Canadian operator at 800 0800 096 0634, then call collect 905-306-2950

Canada Study Grant Overawards

Send a cheque or money order, payable to the Minister of Finance, to:

Department of Education
Student Assistance Office
P.O. Box 2290, Halifax Central
Halifax, Nova Scotia B3J 3C8