Student Loan In Canada

Student Loan In Canada

Government Loans

Canadian citizens, permanent residents of Canada, and protected persons (including convention refugees) are normally eligible for loans provided by the federal government, through the Canada Student Loans Program (CSLP), in addition to loans provided by their province of residence.

Loans issued to full-time students are interest free while a student is in full-time studies. Students receiving a CSL for the first time on or after August 1, 1995 are eligible for up to 340 weeks (approx 6.5 years) of interest-free assistance. Students in doctoral programs are eligible for an additional 60 weeks, up to 400 weeks (approx 7.5 years). Students with permanent disabilities and students who received their first CSL prior to August 1, 1995 are eligilbe for up to 520 weeks of assistance (10 years).

As the length of North American graduate degree programs often exceed this 400 week maximum, students considering graduate study are advised to think carefully before taking out student loans. For example, an honours BA from a Canadian University takes four years, assuming satisfactory progress. MA programs in Canada very in length from 1-3 years, with two years being the average minimum. A PhD, takes on average, 5 years to complete, although many students take significantly longer than this. Assuming a graduate student completes an honours BA (4 years), an MA (2 years), and a PhD (5 years), one can expect to be in university for at least 11 years. This is significantly longer than the 400 weeks maximum allotted to complete a degree by the National student loan program, and graduate students can easily find themselves in a position where they are required to repay their student loans while enrolled as a full-time student.

Funding is available for part-time students through the CSLP (provincial student loans are not available). Part-time students must make interest payments while in study and begin payments of principal and interest when they cease to be a part-time student. Grants may supplement loans to aid students who face particular barriers to accessing post-secondary education, such as students with permanent disabilities or students from low-income families.

Students must apply for the Canadian and provincial loans through their provincial government. The rules for what determines your province of residence vary, but normally it is defined as where you have most recently lived for at least 12 consecutive months, not including any time you spent as a full-time student at a post-secondary institution. In most cases, the province of residence is the province one lived in before becoming a post-secondary student.

Canada Student Loans (CSL) of up to $210 per week of full-time study or 60% of the student's assessed need (the lesser of these) can be issued per loan year (August 1–July 31). Loans issued through provincial programs will normally provide students with enough funding to cover the balance of their assessed need. Part-time loans of up to $4,000 can be made, but a student cannot be more than $4,000 in debt on part-time loans at any one time. All Canadian students may also be eligible for the Canada Millennium Scholarship Foundation Bursary (CMS Grant), and other grants provided by their province of residence.

For example, students in British Columbia may be eligible for a maximum of $14,300 combined loan and grant funding per year.

Students in professional programs

Most charter banks in Canada have specific programs for students in professional programs (e.g., medicine) that can provide more funds than usual in the form of a line of credit, sometimes with lower interest rates as well. Students may also be eligible for government loans that are interest free while in school on top of this line of credit, as private loans do not count against government loans/grants.

Loan Administration and Repayment

The Canada Student Loan (sometimes referred to as the National Student Loan) is administered by National Student Loan Service Centre under contract to Human Resources and Social Development Canada (HRSDC). Students have the choice of opting for a fixed interest rate of prime interest rate + 5%, or a floating interest rate of prime interest rate + 2.5%.
Based on the HRSDC student loan calculator , and assuming a prime interest rate of 4.5%, a standard 10-year (114 month) repayment period, and a loan of $30,000:

- if the Floating Interest option is selected, monthly payments will be $361.02 (principal and interest), resulting in total payments of $41,156.77 ($30,000 principal + $11,156.77 interest) over the life of the repayment.
- if the Fixed Interest option is selected, monthly payments will be $400.50 (principal and interest), resulting in payments of $45,657.54 ($30,000 principal + $16,657.54 interest).

Repayment Assistance

CSLP offers a number of programs to assist students who find themselves facing financial difficulty during repayment. Among these programs are:- Interest Relief , which is designed to help students meet repayment obligations if they are temporarily unable to make payments on their government student loans because of unemployment or low income. Interest Relief is granted for periods of six months, up to a maximum of 30 months. Some exceptions, such as Canadian residency, may apply. Students may also be eligible for a further 24 months of Extended Interest Relief. Once approved for Interest Relief, students are not required to make payments on either the monthly interest or the outstanding principal of their loan(s) (the federal and/or provincial government will pay the interest on a student's behalf).

- Debt Reduction in Repayment is designed to help students facing long-term financial difficulties manage the repayment of their Student Loan(s). DRR lowers the principal amount of a loan, thereby reducing the monthly loan payment to an affordable level based on family income. A student can receive up to three reductions (totaling up to $26,000) on their Canada Student Loan principal during their lifetime, depending on financial circumstances.
- Revision of Terms is a feature that provides students with the flexibility to manage loan repayment in a way that is responsive to individual situations. It can be used to decrease the monthly payments by increasing the repayment period (from the standard 10 years up to 15 years) should a student find the standard terms difficult to maintain. It can be used to increase loan payments by reducing the repayment period, allowing more rapid repayment of a loan.

- Permanent Disability Benefit allows for the reduction of loans for students who are experiencing exceptional financial hardship due to a permanent disability. The eligibility criteria varies based on date of loan negotiation and lender. A recent Access to Information request indicated that over 60% of applicants to this program were denied loan forgiveness.

Canada Student Loans and Grants

The Canada Student Loans Program provides loans and grants to Canadians attending a University, College, Trade School, or Vocational School, if they need help financing their education.
If you’re looking for information about loans, grants, or the program itself, click on a link below to find information particular to your needs:

Student Loans
Grants
More Information About the Canada Student Loans Program
Related Links

New: Reports about the Canadian Millenium Scholarship Foundation

Student Loans

The Canada Student Loans Program enables students with a demonstrated financial need to attend a post-secondary institution by providing them with loans to cover the costs of going to school. In doing so, the Government of Canada attempts to ensure Canadians have the opportunity to develop the knowledge and skills needed to participate in the economy and society.

Applying for a Canada Student Loan

Applying for a Government Student Loan (CanLearn)Determine your eligibility for a Canada Student Loan--find out how to apply for a loan, and learn when you will receive the funds. Some pages within this section will ask you for your student profile in order to provide the information that is most relevant to your situation. You will need to select your province or territory of residence, whether you are (or will be) a full-time or part-time student, and what type of institution you are (or will be) attending.

Designated Educational InstitutionsTo help determine your eligibility for a loan, visit the desidngated list of educational institutions where students are eligible to receive Canada Student Loans.

Financial PlannerThe Financial Planner provides you with three tools to help you finance and budget for your postsecondary education: The Education Cost Calculator, the Budget Estimator and the Online Budget Planner.

Need Assessment Tables for Full-Time LoansThese tables assist full-time students in determining whether or not they are eligible for a student loan.

Student Loan EstimatorThe Student Loan Estimator is an interactive Web application that can be used by full-time students to estimate the amount of assistance they could potentially receive from both the Canada Student Loan Program and provincial funding authorities.
*Important note for residents of Quebec, Nunavut, or the Northwest Territories.
Repaying Your Canada Student Loan

Repaying your Government Student Loan (CanLearn)Visit CanLearn’s “Repaying your Government Student Loan” section to find out when you have to begin paying back your loan, what your monthly payments will be and how to repay your student loan faster. Some pages within this section will ask you for your student profile in order to provide the information that is most relevant to your situation. You will need to select your province or territory of residence, whether you are (or were) a full-time or part-time student, and what type of institution you are (or were) attending.

Debt Reduction in RepaymentDetermine how Debt Reduction in Repayment (DRR) may be able to assist you if you face exceptional long-term financial difficulty. DRR will reduce your outstanding student loan principal and lower your monthly loan payments.

Interest ReliefInterest Relief can help you meet your repayment obligations if you are temporarily unable to repay your government student loans due to unemployment or a low income. Click here to access the Maximum Income Guidelines for Interest Relief.

Permanent Disability BenefitIf you have a permanent disability and you are experiencing exceptional financial hardship repaying your Canada Student Loan(s) due to your disability, you may qualify for the Permanent Disability Benefit (PDB) which allows for the reduction of your loans.

Revising the Terms of your LoanRevision of Terms is a debt management measure designed to help you decrease your monthly payment amount should you be unable to repay your government student loans according to the terms in your Consolidation Agreement.
Tax ReliefClick on the link above to find out what forms of tax relief the Government of Canada offers students.

Grants**

Grants are available from the Government of Canada to increase the participation of under-represented groups in post-secondary education as well as to encourage parents to start saving for their child(ren)’s post-secondary education early. Grants are also available for students in a variety of fields and who are at different levels in their education.
Canada Study and Access Grants

Grants for Students from Low Income Families and High-need Part-time StudentsThis grant is available to first-time students from low-income families at any designated post-secondary educational institution.

Grants for Students with DependantsThis grant is awarded to students who have dependants and who demonstrate financial need exceeding the established amounts in their combined federal and provincial loans.

Grants for Students with DisabilitiesThe Grant for Students with Disabilities provides funds for accommodation, tuition, books, and other education-related expenses related to a student’s disability.

Grants for Women pursuing Doctoral StudiesThe Grant for Women pursuing Doctoral Studies is intended to help increase the participation of women in certain fields of study at the doctoral level.

**Important note for residents of Quebec, Nunavut, or the Northwest Territories.
Other Grants and Scholarships

Apprenticeship Incentive GrantThe Apprenticeship Incentive Grant (AIG) helps apprentices cover some of the expenses related to tuition, travel and tools to reduce the barriers faced by many Canadians who wish to pursue a career in the skilled trades.
Canada Education Savings GrantsThe Canada Education Savings Grant is a grant offered by the Government of Canada to help parents save for their child's education.
Canada Graduate ScholarshipsThe Canada Graduate Scholarship is offered to graduate and doctoral students. Click on the link above for more information.
Canadian Millenium ScholarshipsThe Canadian Millennium Foundation provides a range of bursaries, awards and scholarships to improve access to Canadian undergraduate post-secondary education.
Scholarship SearchThe CanLearn Scholarship Search is a service provided in collaboration with Studentawards.com: the leading FREE Canadian scholarship search service devoted to helping students find information on scholarships, bursaries, grants, and other forms of financial assistance.

More Information about the Canada Student Loans Program

Learn more about the Canada Student Loans Program (CSLP) by visiting the links below:
The Canada Student Loans ProgramVisit the Canada Student Loans Program link to find out more about its mission, how it is organized and an overview of the program.
Acts and RegulationsTo review the acts and regulations regarding the Canada Student Loans Program, please visit the page above.
PublicationsVisit the Canada Student Loan Program Publications page to access guides containing information on Canada Student loans and other financial assistance programs available to fund your post-secondary education.

Related Links

CanLearnCanLearn is an online source for information on post-secondary education and learning resources in Canada. CanLearn provides information needed to apply for, maintain, and repay student loans in Canada.
Canada Revenue AgencyThe Canada Revenue Agency’s Web site contains all the information student loan borrowers need in order to file their taxes.
On-Line ToolsCanLearn offers a list of interactive tools that will help you save, plan and pay for your post-secondary education.
National Student Loans Service Centre (NSLSC)The National Student Loans Service Centre (NSLSC) is a government agency that processes students’ federal loan repayments and offers assistance programs to students who experience difficulty repaying their student loan.
Provincial and Territorial Student Assistance OfficesProvincial and Territorial Student Assistance Offices provide application forms and information on student assistance programs. They confirm students' eligibility, process loan applications, assess students' financial need, and send loan documents to student loan borrowers.
Canada Student Loans Program - Certification Unit - This section allows those working in the area of private institution certification to access resources critical to their work.
Budget 2008 and Student Financial Assistance
Investing in People

Improving Canada’s competitive position means developing the best-educated, most skilled and most flexible workforce in the world. That is why Budget 2008 is:
Supporting Canadian students with a $350-million investment in 2009–10, rising to $430 million by 2012–13, in a new, consolidated Canada Student Grant Program that will reach 245,000 college and undergraduate students per year when it takes effect in the fall of 2009.
Committing $123 million over four years starting in 2009–10 to streamline and modernize the Canada Student Loans Program.

Enhancing the flexibility of Registered Education Savings Plans by increasing the time they may remain open to 35 years from 25 years, and by extending the maximum contribution period by 10 years.

Provincial and Territorial Student Assistance Offices
Newfoundland
Student Aid DivisionDepartment of EducationThompson Student Centrehttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.edu.gov.nf.ca/studentaid/
Prince Edward Island
Student Aid DivisionDepartment of Educationhttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.edu.pe.ca/studentloan/resources/index.asp
Nova Scotia
Student Assistance OfficeDepartment of Education and Culturehttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://studentloans.ednet.ns.ca/
New Brunswick
Student Services BranchDepartment of Advanced Education and Labourhttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.studentaid.gnb.ca/
*Quebec
Student Financial Assistance ProgramsMinistère de l'éducationhttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.afe.gouv.qc.ca/english/indexAng.asp
Ontario
Student Support BranchMinistry of Training, Colleges and Universitieshttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://osap.gov.on.ca/
Manitoba
Student Financial AssistanceDepartment of Education and Traininghttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.studentaid.gov.mb.ca.html
Saskatchewan
Student Financial AssistancePost-Secondary Education and Skills Traininghttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.student-loans.sk.ca/
Alberta
Students FinanceAlberta Learning Information Servicehttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.alis.gov.ab.ca/studentsfinance/main.asp
British Columbia
Student Services BranchAdvanced Education, Training and Technologyhttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.aved.gov.bc.ca/studentservices/
Yukon
Students Financial Assistance UnitDepartment of Educationhttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.education.gov.yk.ca/advanceded/sfa/index.html
*Northwest Territories
Student Financial Assistance ProgramDepartment of Education, Culture and Employmenthttp://www.hrsdc.gc.ca/asp/redirect.asp?var=http://www.nwtsfa.gov.nt.ca/
*Nunavut
http://www.gov.nu.ca/education/eng/adult/fans/index.htm
* Nunavut, the Northwest Territories and the province of Quebec operate their own student assistance plans. If you are a resident of Nunavut, the Northwest Territories or Quebec, contact the provincial or territorial student assistance office for further information.

We at the Coalition believe that the post-secondary student loan system should be transparent. That's is why we will be providing public access to all ATIs that we file with HRSDC and other organizations involved in the administration of the Canada Student Loans Program. Please feel free to review these files and call us if you have any questions. The Coalition encourages interested journalists to report o­n what is going o­n in the existing system.


http://www.studentloanfairness.ca/documents/Deadrisksharedborrowerscollected.pdfhttp://www.studentloanfairness.ca/documents/ResolveServiceLevels20062007.pdf http://www.studentloanfairness.ca/documents/TotalRefundsClawedbackbyCRA.pdfhttp://www.studentloanfairness.ca/documents/TotalCollectedOnDefaultedStudentLoans.pdfhttp://www.studentloanfairness.ca/documents/Resolvecontractwithfederalgovernment.pdfhttp://www.studentloanfairness.ca/documents/Borrowerscantgetbalances.pdfhttp://www.studentloanfairness.ca/documents/CSLPReformmandate.pdfhttp://www.studentloanfairness.ca/documents/Parttimeinterestpaid.pdfhttp://www.studentloanfairness.ca/documents/ATI-6monthgraceperiod.pdfhttp://www.studentloanfairness.ca/documents/DetailedDefaultFigures2001-2006.pdfhttp://www.studentloanfairness.ca/documents/ATI_Direct_Lend_Death_Accounts.pdfhttp://www.studentloanfairness.ca/documents/ATI-NSLSCComplaints[1].pdfhttp://www.studentloanfairness.ca/documents/ATI-100millionininterestdefaults[1].pdfhttp://www.studentloanfairness.ca/documents/ATI_RejectionforPermanetDisabilityBenefit[1].pdfhttp://www.studentloanfairness.ca/documents/LoanCallCentreTrainingManualsDENIED.pdfhttp://www.studentloanfairness.ca/documents/IRapplicantsrefused.pdf