Introduction

The Post-Graduation Debt Relief Program (PDRP) is the first and only program of its kind in  Canada. The PDRP is a low income protection program for graduates who have lower incomes following graduation. The Program assists graduates with the repayment of eligible academic student debt after graduation (i.e., Faculty of Law interest-free loans and government student loans*). The goal is to ensure that all of the Faculty's graduates can make career choices based on interest rather than debt-induced financial pressure.

The PDRP is open to all University of Toronto, Faculty of Law L.L.B or J.D. graduates from the Class of 2007 onwards. Graduates may be eligible on the basis of the nature of their employment; health or disability-related issues; staying at home to care for dependents; or because they are continuing as full-time students after law school.

Graduates are eligible to apply for the PDRP any time within ten years of graduation as long as they meet the Program's requirements. The PDRP loan typically covers the principal and interest repayment obligations on eligible law school academic debt. The Program will also take into account annual pre-law educational loan repayment obligations (i.e., government loans and other debt that you can prove was used for education) which will be added to the participant’s basic income level (BIL). The lesser of the actual annual repayment obligation for the eligible loan or a maximum of $4,000 per year may be claimed.

At the end of each year, a certain percentage of the loan is forgiven. For each subsequent year that the student qualifies under the program, the Faculty will continue to provide a loan and will continue to forgive a higher percentage of the cumulative loan. If the participant is no longer eligible to participate in the PDRP due to earning sufficient income, he or she will be required to start paying back the remaining balance of their PDRP loan. The loan is non-interest bearing and the minimum monthly payment cannot be less than $100. However, if a student stays in the program for 10 years, the loan will be forgiven in its entirety.

A participant with higher income levels may still qualify if their expected contribution does not fully cover their repayment obligation. The Basic Income Level (BIL) for 2017 has been set at $58,438 per year. If a participant's income does not exceed the Basic Income Level, the Faculty will contribute the entire annual repayment obligation. If the participant's income exceeds the Basic Income Level, then the participant will be expected to contribute 30% of the excess income per annum to reduce his or her loan obligation. However, if the participant expected contribution is higher than his/her annual loan obligation, then the participant will be responsible for his/her total loan repayment.

A participant can enter, leave and re-enter the program any time within 10 years of his/her graduation.  An example of a reason why alumni may enter, leave and re-enter is to pursue a maternity/paternity leave. However, forgiveness will be calculated based on years participating in the program.**

See the Post-Graduation Debt Relief Policy Booklet for detailed calculation of contributions. 

Example 1 (Income less than the Basic Income Level):

Income: $55,000
Eligible Law school Debt: $25,000
Annual Debt Obligation: $7,610
Participant's Contribution: ($55,000 - $58,438) x 0.30 = $0.00
Faculty's Contributions: ($7,610 - $0.00) = $7,610

The Faculty provides the participant with a loan of $7,610 to cover their 2017 debt repayment obligations. At the end of 2017, 10% of the loan is forgiven ($761).

Example 2 (Income greater than Basic Income Level):

Income: $70,000
Eligible Law School Debt: $25,000
Annual Law School Debt Obligation: $7,610
Participant's Contribution: ($70,000 - $58,438) x 0.30 = $3,469
Faculty's Contribution: ($7,610 - $3,469) = $4,141

The Faculty provides the participant with a loan of $4,141 to cover their 2017 debt repayment obligations. At the end of 2017, 10% of the loan is forgiven ($414).

Example 3 (Income greater than Basic Income Level with eligible pre-law loan):

Income: $70,000
Eligible Law School Debt: $25,000
Annual Law School Debt Obligation: $7,610
Eligible Pre-Law School Debt: $20,000

Annual Pre-Law School Debt Obligation: $2,569

Adjusted Basic Income Level: $61,007 ($58,438 + $2,569)

Participant's Contribution: ($70,000 - $61,007) x 0.30 = $2,698
Faculty's Contribution: ($7,610 - $2,698) = $4,912

The Faculty provides the participant with a loan of $4,912 to cover their 2017 debt repayment obligations. At the end of 2017, 10% of the loan is forgiven ($491).

Example 4 (Income greater than the Basic Income Level in year 4):

Income: $55,000 for the first 3 years

Income: $85,000 in year 4

Eligible Law school Debt: $25,000

Annual Debt Obligation: $7,610

Participant's Contribution in the first 3 years: ($55,000 - $58,438) x 0.30 = $0.00
Faculty's Contributions in the first 3 years: ($7,610 - $0.00) = $7,610

Participant's Contribution in year 4: ($85,000 - $58,438) x 0.30 = $7,969
Faculty's Contribution in year 4: ($7,610 - $7,968) = $0

The Faculty provided the participant with a loan of $22,830 ($7,610 * 3) to cover their first three years debt repayment obligations.  In the fourth year, the participant’s income is higher than the basic income level and he/she is not eligible to participate in the PDRP program anymore.  He/she is now responsible for his/her total loan repayment.  In the end, 30% of the cumulative loan is forgiven ($9,406) and the participant will be expected to start repaying the remainder of $13,424 ($22,830 - $9,406) PDRP loan to the Faculty. 

Often, the interest rate for paying government student loans is higher than the interest rate for funds taken out of the Scotiabank Professional Student Plan and the TD Student Line of Credit. In these cases, graduates may want to consider paying down their government student loans using any funds still available in their Scotiabank line of credit and TD Student line of Credit. By doing so, they would incur lower interest on any government student loan balances that are paid down using their line of credit.

Any law-related government student loan that is paid down using line of credit funds will still be eligible for the PDRP.

*Amounts taken from Scotiabank line of credit that are not included as part of the Faculty of Law interest-free loan, Faculty of Law emergency loan, credit card loans and other bank or private loans do not qualify to participate in the PDRP.

 *Amounts taken from Scotiabank line of credit that are not included as part of the Faculty of Law interest-free loan, are: Faculty of Law emergency loan, credit card loans and other bank or private loans. These do not qualify to participate in the PDRP.

**A participant can enter, leave and re-enter the program any time within 10 years of his/her graduation. An example of a reason why alumni may enter, leave and re-enter the program is to pursue a maternity/paternity leave.

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Timeline

The deadline for submitting an application for PDRP benefits is March 31st of the calendar year for which benefits are requested. PDRP applications are assessed based on a participant's financial situation for a calendar year. An application must be made each calendar year for which benefits are claimed. Late applications should be accompanied by a letter explaining any extenuating circumstances for the lateness. If the late application is accepted, any PDRP benefits will be pro-rated based on the lateness of the application. No applications will be accepted after July 31st of the calendar year for which benefits are requested.

In order to be eligible for PDRP benefits, the Financial Aid Office must receive the completed application and all supporting documents by the deadline. Decisions on complete PDRP applications will be communicated to participants by letter in May of each year.

PDRP Timeline
DateEvents
April 1Deadline for submitting PDRP application
MayDecisions on complete PDRP applications communicated to participants
JuneFirst PDRP payment sent to participants
October 31Deadline for submitting updated employment information
NovemberSecond PRDP payment sent to participants
DecemberNew PDRP application made available to graduates

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Policy and Application Process

For more information please refer to the Post-Graduation Relief Policy Booklet and Application below: 

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Message from the Financial Aid Office

We strongly recommend that all students and graduates become familiar with the PDRP policies as they begin to make decisions regarding their career choices. We are available to counsel students and graduates about the program and other questions regarding debt management.

For any questions regarding the Faculty's Financial Aid Programs or assistance in completing a PDRP application, please do not hesitate to contact our office by phone at 416-978-3716 or by email at financialaid.law@utoronto.ca

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