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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. And while student loans have provided much financial relief, enabling many people to pursue higher learning who otherwise would not be able to, they can be challenging to pay off. As schooling has become more expensive, so too have student loans, and for some, the debt burden has put a strain on their finances.

Fortunately, there’s a government program available to help students who are struggling with making loan payments.  

What is The Repayment Assistance Plan?

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 Ontario and the Government of Canada and administered through the National Student Loan Service Centre (NSLSC). Revised 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 Canadian and/or Ontario student loans.

Check out these student tax credits and deductions

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. 

Do you have a severe disability and live in Alberta? Then you should check out the AISH benefit.

Repayment Assistance Plan – How Does it Work?

Under RAP, your loan balance is paid off gradually over a maximum period of 15 years once you complete your full-time post-secondary studies. If you’re a borrower with a permanent disability, the maximum loan repayment period is 10 years. 

RAP is divided into two stages:

Stage 1: This is the interest relief stage. During the first five years of the program, the governments will pay the interest on your student loans.

Stage 2: This is the debt reduction stage. You will move into this stage if you’ve been on RAP for at least five years or have been repaying your loans for at least 10 years, whichever comes first. At this point, the governments will pay for both the interest and principal on your loans. If you have a permanent disability, you can directly enter stage 2 once you complete your studies.

Learn what happens to your student debt if you pass away.

Are You Eligible For The Repayment Assistance Plan?

To qualify for RAP you:

  • Must reside in Canada
  • Must have been out of school for at least six months
  • Your student loans must be in good standing

Your monthly loan payment reduction is based on the number of members in your family and your gross family income. If your total family income falls below the following thresholds, you may be eligible for a zero monthly payment plan.

Number of Family MembersGross Monthly Family Income

If your gross family income exceeds the above thresholds, you’ll no longer qualify for zero payment. Instead, your monthly payment will increase based on how high your household income is. However, it’ll never exceed 20 percent of your gross family income.

Check out if bankruptcy can help you with student loan debt.

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. 

Check out these other student loan programs in Canada.

Repayment Assistance Plan FAQs

What If I decide to go back to school?

Once the government begins paying your loans’ principal payments on your behalf, you’re not permitted to receive additional student loans or grants until your existing loans are paid off. If you plan on returning to school, inform the NSLSC; this will allow you to delay your repayment schedule and keep your loan interest-free. If you’re currently in the RAP-PD program and have been out of school for five years, you may not be able to obtain further loans and grants from some provinces until you pay off your current loans. This restriction doesn’t apply to federal loans.

What if I can’t make a payment?

If you’re having difficulty making regular payments or anticipate that you’ll miss one, contact the NSLSC to discuss your options.

What is the Medical and Parental Leave repayment plan? 

The Medical and Parental Leave is for borrowers who wish to take a break from their studies for medical (including mental health) or parental reasons. No interest will be added to your student loan, and you’re not required to make payments during the leave. Leave periods span six months, and you can apply for three of them for a maximum of 18 consecutive months of leave. If you have federal student loans or provincial loans from New Brunswick, Newfoundland and Labrador, Saskatchewan, and British Columbia, you can apply for the Medical and Parental Leave, so long as you meet the criteria. If your loan is from any other jurisdiction, you must contact your provincial or territorial student aid office for information.

Final Thoughts

If your student loan debt is causing you hardship, you should strongly consider looking into RAP, as it 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.

Mark Gregorski avatar on Loans Canada
Mark Gregorski

Mark is a writer who specializes in writing content for companies in the financial services industry. He has written articles about personal finance, mortgages, and real estate and is passionate about educating people on how to make smart financial decisions. Mark graduated from the Northern Alberta Institute of Technology with a degree in finance and has more than ten years' experience as an accountant. Outside of writing, he enjoys playing poker, going to the gym, composing music, and learning about digital marketing.

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