Repayment Assistance for Canada Student Loans: New Program Promises to Ease Debt Load of Canadian Students

The Repayment Assistance Plan is a new federal program that promises to help make student loan payments more affordable, and to eliminate student debt more quickly. Here is a brief overview of the program, how it works, and who is eligible.

What the Repayment Assistance Plan Promises:

  • No student will have a repayment period of more than 15 years
  • Students with a permanent disability will have a maximum repayment period of 10 years
  • Payments will be affordable, based on the student’s income and family size
  • These payments should not present a hardship for the student
  • No payment will be required from students with very low incomes
  • Students should not pay more than 20 percent of their income towards loans covered by this program

Eligibility Criteria for the Repayment Assistance Plan:

  • Students are not automatically enrolled, and must apply for this program
  • Students must be a resident of Canada
  • Students must have received their Consolidated Loan Agreement
  • Students must be unable to afford their calculated monthly student loan payment

The Plan has two stages, designed to help students repay their loans within 15 years.

Stage One of the Plan:

  • for the first five years, students will make affordable payments towards their loan principal only
  • the Government of Canada will make payments towards the interest on the student’s debt
  • An individual’s loan repayments will not exceed 20 percent of their total income

Stage Two of the Plan:

  • begins once the student has completed Stage One, or when the student has been repaying their loan for 10 years
  • the Government of Canada will continue to pay the interest on the loan, as well as whatever part of the principal payment that is not covered by the student’s monthly payment
  • the loan will be gradually paid so that no student debt remains after 15 years, or 10 years for students with permanent disabilities

The Repayment Assistance Plan replaces the existing Interest Relief and Debt Reduction Repayment Programs. Students currently participating in these programs will remain in them until their approved period ends. These students also have the option to apply to the Repayment Assistance Plan after August 1.


Applying for the Repayment Assistance Plan

  • Canadian students struggling with repaying their federal loans should contact the National Student Loans Service Centre to find out more information and request an application form
  • The application form must be returned to the Centre with the appropriate supporting documentation.

Managing student debt can be difficult, but this program promises to make life easier for students struggling with repaying their education loans. Those students should also inquire into provincial and territorial debt reduction programs that may be available in their specific area.