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The Ryerson University campus in Toronto on Jan. 17, 2019.Chris Young/The Canadian Press

Some student loan recipients are potentially facing late penalties and hefty payments due to glitches with a federal program aimed at debt relief, leaving them seeking answers from an overloaded call centre.

The federal government froze student loan payments for six months as a relief measure during the pandemic. At the same time, it put on hold the Repayment Assistance Plan (RAP), an existing program that enables recent graduates to reduce or suspend payments, based on their family income. When the freeze on student loan payments officially lifted at the end of September, those who qualified for the assistance plan had to once again apply. But some of those individuals are now finding their accounts frozen and their reapplications in limbo because the National Student Loan Service Centre (NSLSC), which administers the program, is overwhelmed.

“Right now, in the middle of a pandemic, not even getting any help is just unacceptable,” said Ashley Walters, who has relied on the program for debt relief since graduating in 2015 with a Master of Information from the University of Toronto.

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The RAP is geared toward low-income borrowers. Individuals must reapply every six months and during the loan payment freeze, some approvals expired. That meant many individuals reapplied when the freeze lifted, swamping the system.

Ms. Walters, a librarian from Ajax, Ont., has routinely sent in the appropriate documents she needs to requalify for the plan, including receipts for her service dog. But the normally straightforward process has become a nightmare since October. She submitted her documents on the first of that month, well before her deadline. But she had not received a response by the end of October as the deadline for her payment approached.

“That’s when I started to try and call them. I was calling maybe 25 times a day … for about two weeks and then I finally got through, [and] got put on hold for over an hour,” Ms. Walters said.

The agents who spoke with Ms. Walters were unsure of why her assistance application wasn’t approved or denied, and assured her she would not be charged any late payments. However, when she checked her account last week, it showed late payments for Nov. 1 and Dec. 1, totalling more than $800.

Ms. Walters contacted the NSLSC again last week, and found her application had still not been processed, and said the agents “didn’t have a response” for her.

Isabelle Maheu, a spokeswoman for Public Affairs and Stakeholder Relations, said in a statement the National Student Loan Service Centre is experiencing high call volume and while staffing has increased, wait times remain high.

Other people with pending renewal applications for the assistance plan have also seen large amounts of money withdrawn from their accounts, leaving them unable to pay for necessities.

Sabrina Labbee, a graduate of Ryerson University, said she has qualified for the program in the past and has made repeated attempts to reapply since it resumed in October. But because of the system’s problems, she has not had her application approved.

As a result, she said payments of $552 – her minimum loan payment without assistance – were withdrawn automatically from her account in both November and December.

“I never gave them permission to withdraw this money,” she said, adding she’s having a hard time paying her other bills. “They’re demanding I make payments or apply to RAP … which I am trying to do.”

According to Ms. Maheu, the NSLSC does not automatically withdraw funds from a borrowers’ account without a pre-authorized debit payment and does not withdraw more than the scheduled payment.

Patty Facy, a recent graduate from the University of Toronto, said she received an e-mail stating her RAP application was approved on Dec. 2. But when she went to check online, she was unable to find the terms. She shared her experiences on Twitter, posting a screenshot of the notice.

Ms. Facy, along with her friends and classmates, has created a petition called #FreezeTheNSLSC in an effort to garner support for an extended grace period before new graduates have to start interest on their debts.

The petition gained the attention of several NDP MP’s including Heather McPherson, who introduced a motion calling for the federal government to place a pause on student loan repayments.

“The second wave is clearly going to be worse than the first and students and recent graduates have not been able to find work – there is not a place for them to make an income,” she said.

The motion brought forward on Nov. 24 was unanimously adopted by the House of Commons. But the federal government has yet to provide an update on when a freeze on payments will begin. In their fiscal update on Nov. 30, the government announced eliminating interest for Canada student and apprenticeship loans for 2021-2022.

Marielle Hossack, a spokesperson for Carla Qualtrough, Minister of Employment, Workforce Development and Disability Inclusion, said in an e-mail that the federal government has supported students during the pandemic by offering the initial pause on loan repayments and doubling Canada Student Grants for eligible part- and full-time students.

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