Attending a college or university isn’t cheap. Every year it seems the cost of tuition and textbooks keeps climbing, making it increasingly difficult to pay for schooling and living expenses.
While student loans have provided much financial relief, enabling many people to pursue higher learning, they can be challenging to pay off. Fortunately, there are government programs such as the Repayment Assistance Program (RAP) available to help students who are struggling with making loan payments.
RAP Key Takeaways
- The Repayment Assistance Plan (RAP) is a program to help Canadians repay their government student loans. If eligible, you may qualify for reduced or no payments at all.
- You may be eligible for RAP if you live in Canada and have been out of school for at least six months.
- You can apply for the RAP through the National Student Loans Service Centre (NSLSC). You must continue to apply for RAP every 6 months to maintain eligibility.
What Is The Repayment Assistance Plan (RAP)?
The Repayment Assistance Plan (RAP) is a program that helps borrowers who are having difficulty paying off their student loans by reducing their payments. Qualified individuals can obtain reduced monthly payments or zero monthly payments.
RAP is offered by the Government of Canada and administered through the National Student Loan Service Centre (NSLSC). Reduced monthly student loan payments are determined by your gross family income – the higher the income, the less of a reduction you’re eligible for.
RAP is only available to borrowers who have federal or provincial student loans.
Repayment Plan For Borrowers With A Permanent Disability (RAP-PD)
If you have a permanent disability, you may be eligible for the Repayment Plan for Borrowers with a Permanent Disability (RAP-PD). It’s similar to RAP in that you’ll benefit from reduced or zero monthly student loan payments, but you may also qualify for an additional payment reduction, which can help you pay for expenses associated with your disability.
If your disability prevents you from securing a job, you may qualify for the Severe Permanent Disability Benefit, which will cancel your student loans altogether.
| AISH Benefit | Learn More |
| Ontario Disability Support Program (ODSP) | Learn More |
| BC Disability Assistance | Learn More |
| Saskatchewan Assured Income for Disability (SAID) | Learn More |
Repayment Assistance Plan – How Does it Work?
Under RAP, your loan balance is paid off gradually over a maximum period of 15 years. If you’re a borrower with a permanent disability, the maximum loan repayment period is 10 years.
RAP is divided into two parts:
Part 1: Interest Relief Stage
This is the interest relief stage. The government will cover any interest on your federal student loans that your reduced payment does not cover.
If you’re under RAP-D, the government will cover both the interest and principal that your reduced payment does not cover.
Part 2: Pay Down Your Loan
The government will pay for both the interest and principal on your loans if you’ve been under the RAP program for 5 years or if it’s been 10 years since you finished school.
If you have a permanent disability, you can directly enter stage 2 once you complete your studies.
The Repayment Assistance Plan Enhancement
While the RAP allows for payment reductions for a period of time, a new enhancement has been made as of November 1, 2022. With the new enhancements students:
- Don’t have to repay their loans until they’re earning $40,000 or more a year. Depending on your family size, this amount may be adjusted.
- Can make payments that are no more than 10% of their household income. Meaning, maximum payments have been reduced to 10% of household incomes.
Are You Eligible For The Repayment Assistance Plan?
To qualify for RAP you:
- Must reside in Canada. (Note: If you are on an international internship or are a reservist or spouse of a reservist deployed abroad, you may also be eligible).
- Must have been out of school for at least six months.
- Your student loans must be in good standing.
If you qualify, the reduction amount you qualify for will be based on the number of members in your family and your gross family income. Even if your total family income goes over the following thresholds, you may still be eligible for a reduced payment plan.
| Number of Family Members | Gross Monthly Family Income |
| 1 | $3,560 |
| 2 | $4,176 |
| 3 | $5,115 |
| 4 | $5,905 |
| 5 | $6,602 |
| 6 | $7,232 |
| 7+ | $7,812 |
What Happens If You Go Back To School?
If you decide to return to school, you must pay back your unpaid student loans before applying for more. Once the Canadian government has contributed to your principal payment while you’re on the Repayment Assistance Plan, you can’t get any more student loans or grants until you’ve paid off your outstanding loans.
That said, you won’t have to make payments on any current student loans if you go back to school. Just keep in mind that some restrictions may apply to your provincial or territorial student loan.
How to Apply For The Repayment Assistance Plan
To apply for RAP, fill out an online or paper form through the NSLSC.
You must document your gross family income and report your family’s size for the month before the application.
Each RAP approval is valid for six months, so you’ll have to renew your application every six months.
Other Student Loan Debt Relief Programs
There are a handful of other ways to deal with your unmanageable student loan debt, including the following:
Elimination Of Canada Student Loan Interest
The Canadian government has eliminated the interest charges on Canada Student Loans as of April 1st, 2023. That can translate into hundreds or even thousands of dollars in savings over the life of a student loan, depending on the funds borrowed.
However, any interest that has accrued on student loans before April 1st must still be repaid.
Student Loan Forgiveness
While there are no general student loan forgiveness programs, the federal and provincial governments do offer certain programs that help reduce the debt you owe. For example, if you’re a family doctor or nurse, you may have up to $40,000 of your student debt forgiven.
Bankruptcy
If you’ve exhausted all other options to deal with your student debt, you may consider declaring bankruptcy as a last resort. Bankruptcy may deal with student loan debt, but at least 7 years must pass after you graduate or leave school in order to write off your student loan debt.
Final Thoughts
If your student loan debt is causing you hardship, you should strongly consider looking into RAP. This program can provide you with financial assistance for many years. The program will allow you to divert more money into other areas of your life without worrying about making your student loan payment each month.
