Unpacking the Complexities of Student Loan Repayment in Canada



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The Canadian government created the Canada student loan program to make post-secondary education easy and accessible to students with financial difficulties and disabilities. The loan, however, has to be repaid as soon as the student graduates or stops schooling.

If you have taken a student loan in Canada and are wondering how student loan repayment works, then you are in the right place. This article discusses the commencement of student loan repayment, the available options and the different loan repayment assistance you can explore.

Student Loan Repayment

Student loan repayment in Canada commences when:

  • One must have rounded up his/her post-secondary education
  • A student decides to change from full-time to part-time studies
  • A student takes time off or leaves school for up to six months.

Non-repayment period

There is a non-repayment period of six months from the time you finished schooling, and the time you must begin your student loan repayment. In most cases, interest will not be charged during this six months grace period.

Still, you can start making payment for your student loan even as soon as you receive the credit. Making the decision to not wait till the end of the six months after schooling to begin your repayment attracts no penalty. However, starting to pay earlier even makes your loan repayment process easier and faster.

Choosing Your Repayment Options

Before the end of the six months non-repayment period, you will be notified to log into your National Student Loan Service Center (NSLSC) account where you will find your loan repayment details. At this stage, you will be able to choose:

  • your interest rate
  • the day of the month you want your repayments to be withdrawn
  • the payment frequency and
  • the account from which payments should be removed.

It is important that you choose the student loan repayment plan that is flexible enough for you as your choice of repayment plan determines how affordable your payment would be.

Standard Loan Repayment Plan

By default, every federal government student loan borrower is placed on a standard repayment plan. This is usually ten years of the fixed monthly payment. What this means is that you will pay the same amount your first year out of school, not minding your income, what you pay ten years later. This student loan repayment plan could work for those who after school receive a substantial starting salary.

Although at the beginning of your student loan repayment, you will be assigned to a default loan repayment plan and be given options to choose from, these plans can be changed at any time for free.

Before contacting your loan servicer to discuss your repayment plan, you can use a student loan repayment calculator to check through different repayment scenarios to find out an affordable amount for you.

Note that the faster you repay your student loan, the less you will have to pay generally in terms of the loan interest. If your student loan repayment is high, based on your income, you may want to apply for a repayment plan with higher amounts.

Student Loan Repayment Assistance

Not every graduate gets a high paying job immediately after school. Some usually have to muddle through before finding their balance. If you are unable to get a high paying job or even find a job at all, you have to aim for a repayment plan that balances your level of income, cost of living and family size.

Sometimes, students are unable to make repayment of the student loan due to low income or no income at all. A student may also be involved in an accident that results in permanent disability, making it challenging to continue loan repayment. In you find yourself in any of these situations, you may be able to take advantage of a student loan repayment assistance.

There are several student loan repayment assistance programs offered by the Canadian government. Here are some of them:

BC Student Loan Assistance

The province of British Columbus has a couple of student loan repayment assistance programs for graduate students who have difficulties repaying their student loans or need a break for a while. Some of the student loan repayment assistance options offered by the British Columbus include;

  • Interest Relief
  • Extended Amortization
  • Principal Deferment and
  • Loan Forgiveness

Nova Scotia Student Loan Assistance

The Nova Scotia loan assistance programs are designed available to assist students in managing their loan repayment after leaving school. Usually, they offer pieces of advice and loan repayment options that best suits you as you transition from being a student to working and growing your career.

Options provided to students by the Nova Scotia student loan assistance are:

  • Repayment assistance plan
  • Payment deferral program
  • Payment disability benefits program
  • Revision of payment terms
  • Interest-only payment
  • Interest capitalization
  • Medical benefits (this covers doctors and nurses working in remote or rural areas)
  • Reservist benefits.

All Nova Scotia loan assistance plans are offered in partnership with the Canada student loan program.

National Students Loan Service Center (NSLSC)

These plans are suitable for graduates who cannot make repayment of their student loan due to low or no income, or those who have defaulted in their student loan repayment as a result unfortunate circumstances like accidents or loss of jobs.

  • Repayment assistance plan (RAP) – through this, you may qualify for a subsidized or no monthly payment.
  • Repayment assistance plan for borrowers with permanent disability (RAP-PD) – under this plan, a student with disability may be eligible for a subsidized or no monthly payment and also receive financial aid with expenses related to your disability.
  • Server permanent disability benefit – this gives the option of total student loan forgiveness based on severe permanent disability.
  • Canada student loan rehabilitation – designed for students whose loans are in collections.
  • Canada student loans forgiveness for family doctors and nurses – provides assistance to those serving as residence doctors, residence in family medicine, nurses or nurse practitioners in an underdeveloped or rural area.


As a student loan borrower, one of the greatest mistakes you can make is to lie or present a false document to get loan repayment assistance or reduced loan payment. In some cases, some student loan borrowers lie about their family size or low income. The Canadian government has warned student loan borrowers to desist from such practice as it is a fraudulent act punishable by law.

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Kareena Maya

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.