Student Loan Forgiveness In Canada

Student Loan Forgiveness In Canada

Written by Bryan Daly
Fact-checked by Caitlin Wood
Last Updated October 5, 2021

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. 

Can You Get A Student Loan Forgiven?

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. 

Learn how to pay off your student debt quickly.

Student Loan Forgiveness For Doctors And Nurses In Canada

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).

Eligibility For Student Loan Forgiveness For Doctors and Nurses in Canada

To qualify for this type of Canada Student Loan forgiveness, you must:

  • Have a Canada Student Loan that’s in good financial standing
  • Be working (part-time, full-time, casual) as an eligible medical professional in an under-served or remote region with a lack of proper healthcare (you must have started on or after July 1, 2011).
  • 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.
  • Submit an this application

Eligible Medical Professionals

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):

  • Family
  • Registered Nurse
  • Registered Psychiatric Nurse
  • Registered Practical Nurse
  • Licensed Practical Nurse
  • Nurse Practitioner
  • Family Medical Resident (training with an accredited Canadian medical school)

You may get Canada Student Loan forgiveness for nurses and family doctors and if you are:

  • Enrolled in full-time studies
  • Enrolled in part-time studies
  • Repaying a student loan 
  • In your non-repayment period

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.

Check out what happens to your student debt when you die.

How Much Can Be Forgiven Under the Student Loan Forgiveness Program For Family Doctors and Nurses?

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.

Learn How to Tackle Debt

Provincial Student Loan Forgiveness Programs

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:

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. 

Are you struggling to make ends meet? Consider applying for BC’s social assistance program.

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 (99 minimum – 400 maximum)
  • 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  

Find out what is the minimum wage in BC for students.

Eligible Occupations In Under-Served Communities In BC
  • Audiologist
  • Diagnostic Medical Sonographer
  • Medical Laboratory Technologist
  • Midwife
  • Nurse (licensed practical, practitioner, registered, registered psychiatric)
  • Occupational Therapist
  • Physician (including residents)
  • Physiotherapist 
  • Polysomnographer
  • Respiratory Therapist 
  • Speech-Language Pathologist 
Eligible Occupations For Working With Children In BC
  • Audiologist
  • Occupational Therapist
  • Physiotherapist
  • School Psychologist 
  • Speech-Language Pathologist
  • Teacher Educator
  • Teach of the Visually Impaired or Deaf/Hard-of-Hearing

Do you live with a disability? Get extra financial aid through BC’s disability assistance program.

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 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:

  • 27 months for a college-level technical program
  • 24 months for an undergraduate university program, over a 3-year period
  • 32 months for an undergraduate university program, over a 4-year period
  • 16 months for a master’s program without a thesis
  • 20 months for a master’s program with a thesis
  • 32 months for a doctorate program 

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
  • And, have finished an education program that results in an undergraduate degree within the specified study period. Loan remission may also be possible for past college studies, as long as they pass requirements. 
  • Or, have finished a college-level training program that results in a Diploma of College Studies (DEC) within the specified study period.

Check out how your student loans can affect your credit.

PEI Debt Reduction Program

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.

Eligible Academic Periods 

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.

Eligibility Requirements For The PEI Debt Reduction Program

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:

  • A completed Debt Reduction Grant application
  • A copy of your certificate, degree or diploma
  • Your loan statement balances from National Student Loans Service Centre (NSLSC) and Edulinx-PEI (they must be dated within the past 4-weeks)

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:

  • Documents that show your participation in community activities 
  • A letter from your PEI employer
  • Your lease/rental agreement and rent receipts
  • Your house purchase agreement/title deed
  • Your PEI motor vehicle registration
  • A property tax assessment 
  • A credit card statement
  • A utility bill (water, electricity, etc.) 

Nova Scotia Student Loan Forgiveness Program

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. 

Eligibility Requirements For The Nova Scotia Student Loan Forgiveness Program

Here are the other eligibility requirements for the Nova Scotia Student Loan Forgiveness Program:

  • It is your first degree that’s eligible for the program
  • Complete your full degree within 8 years of beginning it
  • 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)

Looking for a free scholarship? Check out Loans Canada’s Scholarship program.

Eligible Amounts

If you graduated from your Nova Scotia post-secondary degree:

  • Before August 1, 2017, and took 5 years plus to finish your degree, Loan Forgiveness is based on an assessment of your first 4 years of enrollment. 
  • After August 1, 2017, and took 5 years plus to finish your degree, Loan Forgiveness is based on an assessment of your first 5 years of enrollment.
  • Before August 1, 2019, you must have accumulated a total student loan debt of more than $28,560.
  • After August 1, 2019, your full Nova Scotia Student Loan may be forgiven, if it’s within the 5 year maximum forgiveness period. 

Bankruptcy Forgiveness 

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.

Hardship Provisions 

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:

  • You can prove to the court that you acted responsibly with regard to the payment of your student loan.
  • You can prove that you’ve gone through (and will continue to go through) financial problems that will stop you from paying your debt.

During the bankruptcy, the court will consider your eligibility for loan forgiveness, otherwise known as “good faith”. This could include factors like:

  • How you used your student loan funds
  • How hard you worked to complete your studies
  • How much effort you put into repaying your loan(s)
  • Whether you’ve used other student loan assistance programs (RAP, etc.)

Frequently Asked Questions

Do student loans go away after I die?

In Canada, federal student loans can be discharged if you pass away with outstanding debt, they will not be transferred to your family or your estate. However, private student loan debts do get transferred to your estate (not your family).

Does bankruptcy get rid of student loans?

Yes, under specific circumstances. You may be eligible to get your entire student loan debt (and other debts) forgiven if you declare bankruptcy after at least 7 years of ending your full or part-time studies. 

What happens if you miss a student loan payment?    

If you miss one student loan payment you will likely receive a notice from the loan provider asking for payment. You may also be charged a fee or additional interest charges. If you miss several months’ worth of payments your loan provider will likely send your account to a collection agency. A federal institution will send your account to the CRA for collection.

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 traveling the world in search of the coolest sights our planet has to offer. Bryan uses the BMO Cash Back Mastercard to earn cash back on everything from boring bill payments to exciting excursions. He is also a strong saver, holding both a TFSA and an RRSP account in order to prepare for his future while taking full advantage of tax benefits.

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