Student Loans and Grants in Canada

Student Loans and Grants in Canada

While post-secondary education can be very expensive, the Canadian government offers different options to aid students pay for tuition and living expenses during their period of study. Both the federal and provincial governments provide loans and grants that allow students to study now and pay later, often with little or no interest while still in school.

Unlike private loans, government student aid is structured to be affordable, flexible and accessible to reach education goals without letting financial barriers stop you. That being said, it is often easy to forget that student loans aren’t free money but a serious commitment that you’ll need to pay off later on, meaning that it’s crucial to understand what you’re signing up for.

Applying to Student Loans and Grants

The Canada Student Financial Assistance Program offers loans and grants for both part-time and full-time students. Even though funding comes from both the federal and provincial government, you only need to submit a single application through your provincial student aid office.

Following the submission of your application, you will then be assessed for both federal and provincial loans and grants. There is also a maximum lifetime limit for student aid, meaning most full-time students can receive aid for a maximum of 340 weeks. The amount of financial aid you receive are dependant on different factors such as:

Your province or territory of residence

Your household income

Tuition and living expenses at your post-secondary institution

Full-Time vs. Part-Time

Dependents or Disabilities

Note: The Government of Canada’s website for student aid and education planning also includes a Federal student aid estimator.

Grants vs. Loans

Grants are non-repayable; essentially free money to help your studies.

Loans have to be repaid after gradually, but usually with low interest and flexible repayment options.

Alberta Student Aid

British Columbia Student Aid

Manitoba Student Aid

New Brunswick Student Financial Services

Newfoundland and Labrador Student Aid

Northwest Territories Student Financial Assistance

Nova Scotia Student Assistance

Nunavut Student Funding

Ontario Student Assistance Program (OSAP)

Prince Edward Island Student Financial Services

Quebec Student Financial Aid

Saskatchewan Student Loans

Yukon Student Financial Assistance

The National Student Loans Service Centre (NSLSC)

Once approved, you can manage your student loan at the NSLSC while in school since it is important to stay on top of your student loan:

Keep your contract information up to date.

Update any changes to schools, programs or study status.

Monitor your balance and grant amounts.

The good news: while you’re a full-time student, you usually don’t have to make payments on your loan during your studies and the federal portion doesn’t accrue interest. Meaning that you can focus on your studies without financial stress.

If you choose to take a break from school or complete your program, there is a six-month non-repayment period before you are required to start paying back your loan.

Repaying Your Loan

Repaying your loan can seem intimidating, but there are a few supports in place to make it more manageable.

Repaying begins six months after finishing school.

You’ll receive information about your total balance, interest rate and repayment schedule.

Payments can be made automatically through your bank or online account.

Repayment Assistance Plan (RAP) could reduce or pause your payments based on your income level if you’re struggling to make payments. In some cases, you may not be required to pay anything until you meet a certain threshold of earnings.

Remember that paying on time helps you build credit history and maintain eligibility for future financial programs. (See the Credit Scores/How to Build Credit report for more information on credit scores)

Provincial or Territorial Payments

BC, MB, NB, NL, ON, SK, YT: Repay your loans through the NSLSC

AB, NS, PEI: Federal loans are paid through the NSLSC and provincial loans are paid through your province.

QU, NU, NWT: Loan payments are through your province or territory.

Payment Options

While no interest is charged on Canada Student Loans, interest may still apply to your provincial part of your loan. You also have access to the Repayment Estimator to see what your monthly payments would look like.

You can also customize your payments if you have a full-time student loan to increase your payments to reduce the time it takes to pay it back, lower payments or even expand your repayment time up to 174 months.

What Happens if You Can’t Repay Your Student Loan?

If you’re unable to keep up with the payments on your student loan, you still have options.

Contact the NSLSC and talk through a repayment plan.

If you end up missing nine months of payments, the federal portion of your loan will be sent to the Canada Revenue Agency (CRTA) for collection. You would then be no longer eligible for new student aid until you bring your loan up to date.

To bring your loan back into good standing you must make the equivalent of two monthly payments, and then choose to:

Pay off any outstanding interest, or

Add the unpaid interest to your loan balance which can only be done once.

Our Conclusion

If you’re planning to attend a post secondary institute, it’s important to grasp how student loans and grants work before applying. Applications typically open in the spring for the following academic year, and you’ll need to have your Social Insurance Number, tax information and school details.

While student aid can make education more accessible, it also creates a hefty financial obligation that continues after your graduation. Learning about eligibility, repayment terms and available assistance programs can help you make informed decisions about how to fund your studies and manage debt responsibly.