Are you struggling with student debt? Student loan forgiveness in Canada might provide you with a financial lifeline. With student loan debt on the rise, those who are having trouble paying off their student loans may be looking for a way to deal with their mounting debt.
Read on to explore the available options to help you reach a debt-free future.
Key Points
- There are a few programs available in Canada that can forgive all or part of your student loan debts including the the Canada Repayment Assistance Plan (RAP), programs for doctors and nurses, and provincial forgiveness programs like those in B.C., Quebec, and Nova Scotia.
- Each program has its own criteria you must meet to be eligible for the program.
What Is Student Loan Forgiveness In Canada?
Canada student loan forgiveness refers to the elimination or reduction of a borrower’s outstanding student loan balance. In other words, the borrower is no longer required to pay back part or all of their student loan debt.
Elimination Of The Canada Student Loan Interest Rate
Recently, the federal government got rid of the interest portion on federal Canada Student Loans and Canada Apprentice Loans. This was done to help minimize the financial burden that students face when repaying their student loans on federally-backed student loans.
However, it should be noted that students are still required to pay interest accrued on student loans before April 1st, 2023. Further, the elimination of interest only applies to the federal portion of a student loan. A floating interest rate will be charged against the provincial portion of the student loan.
Learn more: The Canada Student Loan Interest Rate Has Been Eliminated
Does Student Loan Forgiveness Exist In Canada?
In Canada, there are some student loan forgiveness programs that provide financial relief to those who are unable to repay their student debt. However, the criteria to qualify for such programs are very specific. Student loan forgiveness options in Canada include the following:
- Canada Repayment Assistance Plan (RAP)
- Severe Permanent Disability Benefit
- Provincial Student Loan Forgiveness Programs
- Bankruptcy
- Consumer Proposal
Canada Repayment Assistance Plan (RAP)
The Repayment Assistance Plan is a program provided by the federal government to qualifying individuals who are struggling to pay off their student loans. The RAP program is available only to borrowers with provincial or federal student loans.
While this program does not completely relieve student loan debt, it reduces loan payment amounts, making repayments more manageable.
If you’re approved for RAP, the Canadian government will pay any outstanding interest on the federal portion of your student loan that your reduced payment doesn’t cover. The government will also pay down the principal and outstanding interest after 5 years of RAP or 10 years after you’ve finished school.
| Note: If you have a permanent disability, you may qualify for the Repayment Plan for Borrowers with a Permanent Disability (RAP-PD). In addition to reduced monthly student loan payments, RAP-PD may also provide an additional payment reduction designed to help you cover costs related to your disability. |
Student Loan Forgiveness In Canada For Doctors And Nurses
Eligible family doctors, residents in family medicine, nurse practitioners, and nurses can get Canada Student Loan forgiveness through the federal government. However, only the federal portion of the loan can be forgiven (not the provincial or territorial portion).
The amount you may receive under the student loan forgiveness program is based on your particular profession:
- Doctors and residents in the family medicine field: Up to $60,000 in forgiveness over a maximum of 5 years.
- Nurses and nurse practitioners: Up to $30,000 in forgiveness over a maximum of 5 years.
Eligibility For Student Loan Forgiveness In Canada For Doctors And Nurses
To qualify for this type of Canada Student Loan forgiveness, you must:
- Have a Canada Student Loan that’s in good financial standing
- Have been employed for at least one consecutive year in an underserved or remote community (unless you’re a resident in family medicine) and provided at least 400 hours of in-person service.
- Be a qualified medical professional
Learn more: Canada.ca
Provincial Student Loan Forgiveness Programs In Canada
As mentioned, Canada Student Loan forgiveness only covers the portion that comes from the federal government. So, if you’re looking for provincial or territorial student loan forgiveness programs, there are some provincial programs you may be eligible for.
| Provincial Program | More Information |
| B.C. Loan Forgiveness Program | Learn More |
| Quebec Loan Remission Program | Learn More |
| PEI Debt Reduction Grant Program | Learn More |
| Nova Scotia Student Loan Forgiveness Program | Learn More |
| Ontario Student Loan Rehabilitation Program | Learn More |
| Newfoundland and Labrador Debt Relief | Learn More |
| Saskatchewan Student Loan Forgiveness | Learn More |
B.C. Loan Forgiveness Program
Students with specific essential occupations can get their British Columbia student loans forgiven if they agree to work for a publicly-funded facility in one of the province’s under-served areas or with children in an occupation that has a shortage of workers.
If eligible, the BC Government will forgive the provincial portion of your Canada-B.C. integrated student loan at a maximum rate of 20% yearly for 5 years. Once you finish 5 years of qualified work, a percentage (maybe all) of your student loan will be forgiven, along with the interest generated during each year you’re registered in the program.
Eligibility For The B.C. Loan Forgiveness Program
You can qualify for student loan forgiveness in BC if you:
- Are currently paying off a B.C. student loan (i.e. it cannot be in default)
- Have graduated from an accredited post-secondary educational facility
- Are not enrolled in any full-time post-secondary studies
- Work an acceptable amount of in-person hours
- Are or will be employed in an eligible full-time, part-time, on-call and/or casual occupation at a publicly-funded facility and working with children or an under-served community
Quebec Loan Remission Program
Under the Quebec Loan Forgiveness Program, you can get up to 15% of your provincial student loan forgiven if you finish your full-time studies within a specified period, or you’ve received a bursary from the Loans and Bursaries Program for each year of your studies.
Eligibility Requirements For The Quebec Loan Remission Program
To qualify for this provincial loan forgiveness program, you must:
- Have been granted a bursary under the Loans and Bursaries during each award year of your studies.
- Have finished a college or university undergraduate program within the specified study period.
- For graduate and doctoral programs, the program must be completed within the deadline and you have received a loan remission for your undergraduate program.
PEI Debt Reduction Program
If you’re a PEI resident and rely on federal or provincial student loans each year, you could be eligible for a special grant to reduce the debt from your provincial student loan.
Eligible academic periods are as follows:
- Before August 1st, 2018: You could qualify for a debt reduction grant of up to $2,000 per year of your studies, which you can apply directly to your unpaid provincial student loan balance.
- As of August 1st, 2018: You may be eligible for a debt reduction grant of up to $3,500 per year of study.
Eligibility Requirements For The PEI Debt Reduction Program
To qualify for the PEI Debt Reduction Grant program, you must meet the following criteria:
- Have borrowed from the PEI Student Loan Program.
- Have earned a diploma, degree, or a certificate within the last 3 years.
- Be a PEI resident and are one of the following:
- Have been living in PEI for at least 6 months following your graduation date, or
- Have moved back to PEI and have been living in the province for at least 6 months before your application date.
Nova Scotia Student Loan Forgiveness Program
The Nova Scotia Student Loan Forgiveness Program can help you pay down the provincial portion of your student loan for up to 5 years and get up to $20,400 of forgiveness.
Eligibility Requirements For The Nova Scotia Student Loan Forgiveness Program
Eligibility requirements for the Nova Scotia Student Loan Forgiveness Program are as follows:
- Be graduating from a non-professional undergrad program in Nova Scotia and have a student loan that was issued on or after August 1st, 2015.
- It is your first degree that’s eligible for the program
- Complete your full degree within 8 years
- You must have eligible Nova Scotia loans (federal loans don’t qualify)
- Eligible degrees can include the transfer of credits from an inter-institutional agreement (also called a Letter of Permission)
Ontario Student Loan Rehabilitation Program
The Ontario Student Loan Rehabilitation Program helps borrowers who’ve defaulted on their Ontario student loans bring their loans back into good standing. You can choose a rehabilitation plan that fits your needs and make monthly payments over a set term of anywhere from 2 to 6 months. Once you complete the program, you’ll be eligible again for additional financial help and repayment assistance programs.
Eligibility For The Ontario Student Loan Rehabilitation Program
To qualify for the Ontario Student Loan Rehabilitation Program, you must meet the following criteria:
- Have defaulted on your Ontario Student Loan and/or the provincial portion of your Canada-Ontario Integrated Student Loan.
- Have a minimum of $600 of provincial student loan principal remaining.
- Have not tried to rehabilitate your Ontario student loan more than once before.
Newfoundland and Labrador Debt Relief
The NL Debt Relief program offers financial assistance to eligible students by converting their provincial student loans into non-repayable grants. This program is designed to reduce the financial burden of student loan debt for qualifying graduates.
Eligibility Criteria For The Newfoundland and Labrador Debt Relief Program
To qualify for the NL Debt Relief program, you must meet the following criteria:
- Graduate from a program in Newfoundland and Labrador that’s at least 80 weeks long.
- Borrow over $165 per week for each study period.
- Pass 80% of a full course load in each study period.
- Be eligible for financial assistance for a minimum of 50% of the length of your study program.
Saskatchewan Student Loan Forgiveness
The Saskatchewan student loan forgiveness program provides eligible students with up to $20,000 in forgiveness on the provincial portion of their student loans. More specifically, this program is designed to encourage professionals in high-demand fields, such as nurses or veterinary practitioners, to work in underserved or rural communities.
Eligibility Requirements For Saskatchewan Student Loan Forgiveness
To qualify for student loan forgiveness in Saskatchewan, you must meet the following criteria:
- Be a resident of Saskatchewan
- Have a Saskatchewan Student Loan in good standing
- Have a license to practice in the province as a:
- Registered Nurse
- Registered Psychiatric Nurse
- Licensed Practical Nurse
- Nurse Practitioner
- Veterinarian
- Veterinary Technologist
- Work for at least 12 straight months and complete at least 400 hours of service in a designated community
Severe Permanent Disability Benefit
The Severe and Permanent Disability Benefit is a program designed to help individuals with a severe and permanent disability that prevents them from working or participating in post-secondary education for the rest of their lives. If approved, you can have your Canada Student Loan debts forgiven.
Eligibility For The Severe And Permanent Disability Benefit
To qualify for this program, you must have a severe permanent disability, which includes an impairment that:
- Prevents you from working
- Will stay with you for the rest of your life
Learn more: Severe and Permanent Disability Benefit
Does Bankruptcy Forgive Student Loans In Canada?
If you don’t meet the specific criteria for any of the above-mentioned programs, you may consider bankruptcy to alleviate your student loan debt.
Generally, student loans are not eligible for bankruptcy. However, if it’s been at least 7 years since you were a student, your student loan debt can be discharged in bankruptcy.
That said, if you’ve been out of school for less than 7 years, your government student loan cannot be absolved through bankruptcy unless you meet financial hardship criteria.
Learn more: Is Bankruptcy The Answer To Student Loan Debt?
Do Consumer Proposals Forgive Student Loans In Canada?
Your student loan may be included in a consumer proposal if it’s been more than 7 years from the end date of your post-secondary studies. If it’s been less than 7 years since the end date of your studies, your creditor(s) must agree specifically to the proposal terms for your student debt to be included.
How To Pay Off Your Student Debt Quickly
The longer your student debt remains unpaid, the more interest will accrue. This means you’ll owe more the longer you take to fully repay your debt. To prevent this from happening, your best bet is to pay off your student loan as quickly as possible. Here are a few ways to do that:
- Start Paying Your Loan Right Away: If possible, start paying your student loan while you’re still in school or right after you graduate. Paying earlier means more of your payments will go toward the principal, which can save you over the long run and help you get out of debt sooner.
- Consolidate Your Student Debt: If you’re carrying several student loans from private lenders or have multiple loans on the go, consider debt consolidation. Rather than juggling multiple loan payments, consolidating them can help make your debt more manageable and save you money in interest.
Other Ways To Help You Manage Your Student Loan Debt In Canada
Refinancing Your Student Loan – If you have a private student loan, you may consider refinancing it to either reduce your monthly payment amount or extend the loan term to give you more time to repay it. Keep in mind that government student loans are ineligible for refinancing.
Canada Student Grant Program: This program is available to eligible full- and part-time students who are in financial need. Part-time students can receive up to $2,520 per year, and full-time students can get up to $4,200 per year or $525 per month of study.
What Happens To Your Student Debt After You Die?
If you pass away before your student loan debt is fully repaid, what happens to this debt? Does it disappear, or will your beneficiaries or family members be stuck with the bill? The answer depends on the type of student loan you leave behind.
- Government Student Debt: Both federal and provincial government student loans are forgiven when the borrower dies. This debt is not passed on to your family members or your estate. Someone must provide proof of death for the debt to be fully forgiven.
- Private Student Loans: Lenders of private student loans are not legally required to discharge the debt in the event that the borrower dies. Some lenders may choose to forgive the loan, while others may pass on the debt to the estate of the deceased. You’ll need to review your student loan contract to find out how student loans are dealt with if the borrower passes away.
Learn more: What Happens To Your Student Debt After You Die
Bottom Line On Student Loan Forgiveness In Canada
Depending on the type of loan you’re carrying and your specific situation, there may be a program available to forgive your student loan debt in Canada. If you don’t meet the criteria for these programs and your situation is particularly dire, you may consider bankruptcy or consumer proposal to alleviate your debt and help you get a fresh financial start. Just be sure that you understand the potential consequences of such options before making your decision.
