According to a Canada Student Loans Program (CSLP) Statistical Review, 625,000 students received student loans during the 2018 – 2019 school year. Plus, the average loan amount was somewhere in the $5,700 range, while the average loan balance was over $13,300 by the time students completed their education.
Statistics also showed that around 330,000 students entered the Repayment Assistance Plan (RAP) because they couldn’t afford their loan payments (a 1% increase since 2017 – 2018). Are you a Canadian student struggling to pay off student loan debt? If so, you may be able to resolve the situation by getting loan forgiveness.
Canadian students with provincial or federal student loans are lucky to have the Repayment Assistance Plan (RAP). This program allows the federal and provincial government to share the cost of a loan with the student, who will only have to pay back what they can comfortably afford. While most cases involve reduced payments, students may also have the option of not making any payments during individual 6-month periods.
The problem is that the Repayment Assistance Plan can’t actually get your student loan forgiven. Don’t worry, because there are several loan forgiveness programs that you can apply for in Canada, including the ones below.
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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).
To qualify for this type of Canada Student Loan forgiveness, you must:
To qualify for Canada Student Loan forgiveness, you must be one of the following medical professionals (and working in an under-served or remote community):
You may get Canada Student Loan forgiveness for nurses and family doctors and if you are:
If your loan is in its repayment period, your monthly payments are still mandatory. That said, you’re allowed to work as an eligible medical professional in more than one remote or under-served community and with multiple employers if you perform at least 400 in-person hours over a maximum period of 12-months.
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Doctors and residents in the family medicine field can qualify for up to $40,000 in forgiveness over a maximum of 5 years.
Nurses and nurse practitioners are eligible for up to $20,000 in forgiveness over a maximum of 5 years.
Loan forgiveness will be applied to your unpaid loan principal once your 12-month service period is complete but you must continue to make interest only payments. Your five-year service period in a remote or under-served rural area does not have to be done consecutively and you can get 5 years of loan forgiveness if you have student loan debt at the end of each year.
Do you have a family and a lot of school debt? Then you may want to get life insurance to protect your family from your debt.
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, there are other programs you can apply for, such as:
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.
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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.
You can qualify for student loan forgiveness in BC if you:
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Under the Quebec Loan Forgiveness Program, you can get up to 15% of your provincial student loan forgiven if you finish your studies within a specified period or you’ve received a bursary from the Loans and Bursaries Program for each year of your studies.
The specified period of study is normally:
To qualify for this provincial loan forgiveness program, you must:
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If you’re a PEI resident and you have to borrow at least $6,000 in federal or provincial student loans each year, you could be eligible for a special grant to reduce the debt from your provincial student loan.
If you started your schooling prior to 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. To qualify, you must graduate from your program within one year of filing your application.
If you commenced your education after July 31st, 2018, you may be eligible for a debt reduction grant of up to $3,500 per year of study. Once again, you may use your grant funds to pay any provincial student loan balances. However, you must graduate within 3 years of sending your application (effective as of March 31st, 2019).
Check out what happens to your student bank account when you graduate.
If you graduated during an academic year prior to August 1st, 2018, you must submit your application within one year of your graduation date. You also have to submit:
If you graduated after July 31st, 2018, the deadline to apply is 3 years maximum after your graduation date. You must provide the documents shown above, as well as 2 pieces of proof that you were a resident of PEI for at least 6 months before you submitted your application. Acceptable proof of residency includes:
The Nova Scotia Student Loan forgiveness Program can help you repay the provincial portion of your loan for up to 5 years and $20,400 of forgiveness. To qualify, you must be graduating from a Nova Scotia non-professional undergraduate program and have a student loan that was issued on or after August 1st, 2015.
Here are the other eligibility requirements for the Nova Scotia Student Loan Forgiveness Program:
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If you graduated from your Nova Scotia post-secondary degree:
If you’re about to declare bankruptcy because you can’t afford your student loan debt, you may qualify for the Repayment Assistance Plan (RAP). Then again, bankruptcy can discharge you from your student loan debt, as long as you declare bankruptcy after at least 7 years of completing your full or part-time studies.
If you file for bankruptcy after an acceptable period of 7 years, your student loan may be forgiven, along with the rest of your unsecured debts. However, if the student loan is clearly causing you hardship, the waiting period may be reduced to 5 years.
Hardship provisions are only applicable if:
During the bankruptcy, the court will consider your eligibility for loan forgiveness, otherwise known as “good faith”. This could include factors like:
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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.
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