Student Loans Guide

What Are Student Loans?

Student loans are borrowed funds designed to help pay for post-secondary education, including tuition, books, and living costs. In Canada, most student loans come from government programs, but private lenders also offer education financing.

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Types of Student Loans in Canada

1. Government Student Loans

Available through the Canada Student Financial Assistance Program (CSFA) and provincial programs. These are the most common and accessible.

• Federal Loan: Offered through the Canada Student Loan Program (CSLP)
  
  
• Provincial Loans: Most provinces offer additional support (e.g., OSAP in Ontario, Alberta Student Aid)
  
  

Key features:

• No interest charged while you’re in school full-time
• No payments required until 6 months after graduation
• Income-based repayment and forgiveness options available
  
  

2. Private Student Loans or Lines of Credit

Offered by banks and credit unions.

Key features:

• May require a co-signer
• Interest may start right away
• Fewer repayment options and less flexibility

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How Much Can You Borrow?

• Loan amounts depend on tuition costs, living expenses, your income, and your family's income.
• Maximums and eligibility vary by province.
  
  

Example: In Ontario, full-time students can access up to $560 per week in combined federal and provincial loans.

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Repayment and Interest

• Government loans have a 6-month grace period after school ends. No payments are due, but interest starts accruing (except in some provinces).
• Private loans often require payments while still in school or immediately after.
  
  

You can choose between:

• Standard repayment plans (usually 9.5 years)
• Repayment Assistance Plans (RAP) for lower-income borrowers
• Accelerated payments or early payoff options to save on interest
  
  

Tips for Managing Student Loans

• Borrow only what you need
• Apply for grants and scholarships first
• Track your loans and payment schedule using the National Student Loans Service Centre (NSLSC)
• Start payments early (even small ones) to reduce interest costs
• Explore loan forgiveness programs, especially if working in public service or remote areas
  
  

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Key Takeaways

• Student loans help make education more accessible, but they come with long-term financial responsibilities.
• Government loans offer lower interest and more flexible repayment than private options.
• Plan your borrowing and repayment strategy early to avoid long-term debt stress.
  
  

Common Questions

Q: Do I need good credit to get a student loan?
A: Not for government loans. Private loans may require a co-signer or good credit history.

Q: What happens if I can’t repay my loan?
A: Government loans offer income-based support. Private lenders may be less flexible and could send your loan to collections.

Q: Are student loans forgiven in Canada?
A: Some federal and provincial programs offer partial forgiveness or grants for graduates in high-demand fields or low-income situations.

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