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Post-secondary education in Canada can be extremely expensive, costing students well over $50,000. This is a significant amount of money and many students, even those whose family wants to help cover the cost don’t have the necessary funds to afford that kind of expense. Most full-time students don’t have time to attend classes while holding down a job, even a part-time one. This is often even more true for students in highly competitive and demanding programs. With pressure to excel in school, keep up with extracurricular activities, continue with everyday activities, and have a social life it can be overwhelming and sometimes impossible to maintain a job while in school. This makes financing a necessity for most students.
Thankfully, the Canadian Government provides students with loans and bursaries to help them get through financially difficult times. For those students who are unable to get approved for a private student loan on their own because of bad credit or other financial issues, we’ve compiled all the information you need to find an alternative way to help pay for post-secondary schooling. Depending on where you reside, the federal and provincial governments each have their own unique student loan programs to financially help students so they can academically succeed.
Factors That Can Affect The Amount Of Aid Offered
When applying for a student loan it’s important to remember that not all students are eligible for the same amount. There are a number of factors considered when determining how much aid you are eligible for.
- Your enrollment status: part-time or full-time student
- The amount of time passed since your high school graduation
- Your parent’s income
- Your income (if you have any)
- Your field of study
- Cost of housing
All of these factors can affect the amount of aid you’re eligible for, so be sure to do your research before applying.
Federal Government Of Canada
The Federal Government of Canada currently has two programs, which can help students finance their post-secondary education. The Canada Student Loan Program (CSLP) offers educational loans and the Canadian Student Grants Program (CSGP) offers grants to financially struggling students (check out this article for a more detailed look).
The Canada Student Loan Program (CSLP)
Students in Canada may be eligible for a subsidized student loan with the Canada Student Loans Program. Students can apply for a school loan using this program, despite whether they’re a full time or part-time student. As long as they meet the customary and necessary requirements for financial help, they could be entitled to receive up to half of the total cost of their tuition in federal loans. The government of Canada will pay the interest accumulated on the loan until graduation. Once students graduate, they’re expected to pay back the original loan amount, with added interest to the government. In addition, payments aren’t required until six months after the program ends, which is meant to provide graduates with time to find a job in order to pay back the outstanding balance.
The Canadian Student Grants Program (CSGP)
Applying for a grant from the Canadian Government is similar to the application process for the Canada Student Loan Program. Request for a federal grant and prove you are in need of financial assistance. If you qualify, you’ll hopefully be accepted to receive grant money to help you pay for your degree. However, unlike the loan program, you do not have to repay the grant back to the government after graduation. There are also grants given to people who fall within specific categories, such as single parents attending school, students with disabilities and dependents, and women in certain fields of doctoral studies.
Student Life: The Good, The Bad and The Expensive. Read here.
Provincial And Territorial Governments Of Canada
If you’ve been denied a federal loan or maxed out all your federal benefits, provincial and territorial loans provide support for students in their respective provinces. Depending on where you reside, you can receive financial support for post-secondary education purposes. Keep in mind there are different regulations and options for students depending on which province they live in.
- Firstly, Students from Ontario, British Columbia, Saskatchewan, New Brunswick, and Newfoundland and Labrador can only receive one single integrated loan or bursary from the government. The government of Canada works with these provincial governments to provide financial assistance.
- Secondly, students from Alberta, Manitoba, Nova Scotia, and Prince Edward Island are allowed to apply for federal student loans, along with provincial/territorial loans, depending on where they reside. This implies they can possibly receive more than one loan at a time.
- Lastly, those university students in Nunavut, the Northwest Territories, and Quebec, cannot obtain federal student loans and grants. These provinces manage their own student loan programs and work within their own province.
The following explains each province and their individual student loan options:
The Student Aid Alberta Service Centre offers both federal and provincial student loan programs, which include scholarships, bursaries, and school loans along with financial planning resources.
The Government of Canada works with the Government of British Columbia to assist students with their financial struggles. Student Aid BC has a student loan package that offers integrated loans, scholarships, and grants. You can find all the details for these programs as well as information for students who have disabilities, dependents, use income help, or have other specific conditions.
Manitoba, along with Quebec and Newfoundland and Labrador have some of the best student financial aids available due to its low-interest rates. In Manitoba, students can apply for federal and provincial tuition loans, grants and bursaries using Manitoba Student Aid.
The government of New Brunswick and Canada work collectively to provide students with integrated financial assistance. One application with the New Brunswick Student Financial Services will have you considered for financial assistance from the provincial government and the government of Canada. Whether you are a full time or part-time student, you can receive financial assistance with the use of loans, grants, and bursaries.
Newfoundland and Labrador
Newfoundland and Labrador Student Financial Services offer students financial aid by working with the government of Canada. While providing integrated loans and grants, you can start your full time or part-time loan application for financial assistance.
The Department of Education, Culture, and Employment in the Northwest Territories help residents with their university expenses. Go to Northwest Territories Student Financial Assistance (SFA) to find student policies, procedures, and applications for financial assistance. Keep in mind, the NWT operate their own student loan program and do not provide any federal student loans.
If you are a resident in Nova Scotia, visit the Nova Scotia Student Assistance department to explore your financial aid options. With information on financing, repayment, programs, and application procedures, it’s easy to apply for a student loan. Additionally, residents in Nova Scotia have access to both federal loans and provincial student loans.
In Nunavut, Canadian federal loans and bursaries aren’t accessible, because Nunavut manages its own student loan program. Visit Nunavut Student Funding to explore different student loan and scholarship options.
The Government of Canada and the Government of Ontario work together to provide university students with integrated loans or grants to help pay for their post-secondary education. Go to the Ontario Student Assistance Program (OSAP) to learn more about their educational support to its residents through loans, grants, scholarships, and bursaries. Whether you are a full-time or part-time student, you can be eligible for some sort of financial help.
Prince Edward Island
Prince Edward Island Student Financial Services offers student loans, bursaries, grants, and rewards for both full-time students and part-time students. Residents can receive federal student loans and grants, along with provincial financial aid. Prince Edward Island also has a debt reduction program for eligible students graduating with more than $6,000/per year of federal and provincial student loan.
The Quebec Student Financial Aid website offers loans and bursaries to full time and part-time students. Quebec doesn’t provide any federal student loans, as it follows its own student loan program. Its student loans have some of the lowest interest rates in the country, making it a valuable option for Quebec students. Use the website to gather more information and sign up for your loan today.
The Government of Canada works with the government of Saskatchewan to provide university students with integrated financial aid. Go to the Saskatchewan Student Loans website to explore your student loan options and learn more about the assistance with the Student Loan Handbooks. Then, apply for your student loan.
Check if you qualify for financial assistance from Yukon Student Financial Assistance. Go to Yukon Student Financial Assistance website to learn about student loans, grants, scholarships, and awards you can take advantage of to help pay for your post-secondary education. Keep in mind, federal student loans and territorial grants are only accessible to permanent residents of the Yukon.
Paying Back Your Student Loan
Typically students have a grace period of six months before having to start repaying their debts. Some may be able to extend their grace period by another six months depending on their personal circumstances. That being said, if you have a salary of less than $25,000 and are a family of one, this six-month extension can be recycled up to ten times after which you’ll have to start paying your student loan back.
If you’re looking for more flexible payment options, the National Student Loans Service Centre (NSLSC) offers students different payment options for all types of government funding. Some loan repayment options are
- Repayment Assistance Plan (RAP) – this payment assistance reduces your monthly payment or eliminates it completely for a period of six months. If you want to continue with RAP, you must re-apply.
- Customize Payment Terms – is a payment option that allows you to decrease the amount of your monthly payment by extending your term (the amount of time you need to pay back the loan)
- Repayment Assistance for Borrowers with a Permanent Disability (RAP – PD) – if you have a permanent disability, you may be able to reduce or eliminate your payments.
Student Loan Forgiveness
In some instances, you may qualify for loan forgiveness. Depending on the province you live in and the requirements you meet, the amount that will be forgiven varies. For example, if you live in Nova Scotia and are having a hard time paying off your student loans, you may qualify for Nova Scotia’s loan forgiveness program. If you meet the requirements, you may be able to eliminate your debt by up to $20,400. Prince Edward Island also has some debt reduction programs in place that will reduce your debt up to $3,500 per year, if you qualify. The government of Canada also has a student loan forgiveness program for medical professionals, where debt up to $40,000 may be forgiven if you qualify. Research your province’s loan forgiveness policies to see if you can reduce or eliminate your student loan.
Budgeting 101 for students, click here.
If you’ve used all your government assistance options, but still need more financial help, private loans and lines of credit from your local bank are an option. Obviously, these types of options require good credit and can be very difficult for many students as they haven’t had time yet to work on or build their credit score. If this is the case you should consider getting a cosigner. A cosigner can be a family member or relative or a close friend that you trust, as long as they have a positive credit history.
If you yourself have good credit, you can sign up for these loans on your own. For instance, CIBC offers students an Education Line of Credit, which offers students who attend Canadian universities access to finances in order to cover tuition, textbooks, transportation, and other school-related expenses. If you’re a student obtaining a professional degree in either medicine, accounting, dentistry, law, business, pharmacy or other programs, you may be entitled to a larger student loan or line of credit due to the increased price of these programs. CIBC, for example, offers the Professional Edge Student Program, which is a line of credit that includes repayment that fits your budget.
Bad Credit Student Loans FAQs
If I have bad credit, what are my student loan options?
If you need a student loan but have bad credit, the federal government provides student loans and grants for students who meet certain criteria. Sometimes, your credit score isn’t significant for these government loans and grants. You can also get a private loan from your local bank, but this will require you to have a cosigner.
How can I get a student loan if I have bad credit and no cosigner?
If you don’t have a cosigner to help you get a private loan, look for a loan from your government. For instance, apply for the Canada Student Loan Program. These loans don’t require a cosigner and usually offer a low-interest rate, along with reasonable payment terms.
Are there any private companies that offer student loans to those with bad credit?
If you have a bad credit history, it is recommended to use federal and or provincial student loans, which don’t require a cosigner or good credit score. However, it is possible to find a private lender that will offer you a loan as a student, just be prepared to pay an extremely high-interest rate. You’re better off applying for a federal loan while working on improving your credit score.
Why is it difficult to find a private student loan for students with bad credit?
Private lenders are less likely to lend money to students with no credit history and/or low credit score due to the increased risk of not getting their money back. If you don’t have a credit history, you are seen as a financial risk. Most banks will require you to have a cosigner who has good credit.
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