Student Loan Programs for Canadians

Student Loan Programs for Canadians

Written by Caitlin Wood
Last Updated November 17, 2017

As many of us have heard, Canadian students are constantly reminded how privileged they are to be able to attend international level education at low cost. Without a doubt in regards to our neighbors, the United States, the cost of education in Canada is greatly subsidized by the Canadian Government. Though this doesn’t mean education is free or even affordable for many Canadians.

Student Life: The Good, The Bad and The Expensive

In fact, according to Statistics Canada roughly 50% of bachelor’s students, 44% of master’s students, and 41 % of doctorate students require some form of student loan to pay their education. Many will argue, that the required debt required to pay for education is considerably lower in Canada. Truthfully, the average amount of student debt accumulated at the time of graduation is $28,000. The reality is that as per completing an undergraduate or graduate program many students will spend the first year of full-time work paying off their debt. Also, most of these students aren’t able to take part in unpaid internships (which often provide invaluable work experience) and therefore find themselves underemployed outside of their field of studies due to their lack of experience or simply the need to find work as soon as possible.

Understanding the current situation of these students is essential to organize and prepare your finances if you’re currently looking to pursue a degree. This article will give an overview of everything you need to know about the government loan program and the Canadian grant program.

Want to learn how to budget properly to save for school? Check this out.

Canada Student Loans Program (CSLP)

What is CSLP?

CSLP is a program offered to all Canadians, except in Québec, Nunavut, and the Northwest territories, In need of a loan for education purposes. Essentially, the loans are given on a financial need basis; the Canadian government pays the interests to the financial institution on the loan until graduation. In 2013-2014 almost half of a million loans were given to full-time students in need.


These loans do not require any payment for up to 6 months after graduation and the interest only starts to accumulate upon graduation. The program offers students either a fixed interest rate of prime rate +5% or a floating rate of primate rate +2.5%. The prime rate on a student loan is an average of the 3 middle rates (minus the biggest and smallest prime rate) of the 5 biggest financial institutions in Canada. Therefore, this program is the smartest way to avoid an enormous accumulation of debt upon graduating. In other words, a quicker and safer way to invest in yourself.

What is required?

To be eligible for this program you must be at least a permanent resident of Canada (in any of the provinces eligible). You must be enrolled in a post-secondary education institution. For a part-time loan, you must be enrolled in at least 20% of a full-time course load. For a full-time loan, you must be enrolled in at least 60% of a full course load. If you are 22 or older you must pass a credit check (click here for more information on why your credit is so important). You will need to fill out a student loan form and provide a few documents. You can verify this information and find the required form on the Canadian government website.

Keep in Mind

The loans offered to students in Canada are limited; in fact, undergraduate students are eligible to receive interest-free assistance for only up to 340 weeks and graduate students up to 400 weeks. Once these time periods are up, interest on the loan will start accumulating and payment will be required. It is important to anticipate the number of years required to complete education before applying for a student loan. Sometimes, waiting until a certain level may be more profitable or more affordable.

Concerned about how a student loan will affect your credit score? This article is for you.

Paying back CSLP

As discussed in a previous section the first payment on a student loan is only required 6 months after graduation. Though the interest will start accumulating upon graduation. The payment method can vary depending on the established repayment structure with the loan provider. Though a monthly payment structure is usually the most common form.  Also, if ever you find yourself in a financially difficult position, the Canadian government also provides a repayment assistance plan to help out those in need. For more detailed information on this option, you may want to visit the Canadian Government’s website.

Without any doubt, staying organized is the best way to control your finances and ensure peace of mind when investing in your future.

Canada Student Grant Program

 What is this program?

This program offers many Canadian students a grant awarded on a financial need basis, income and family size are the main factors taken into account when setting the amount given to students. Generally, the grants are awarded as follow: $250 per month of study for students from low-income families, $100 per month of study for students from middle-income families. Also, for students with disabilities or students who have children, the program offers different grants for every need. In 2013-2014 about 368,000 students were awarded a student grant.

Why this program?

The Canadian student grant program does not require its recipients to repay any of the money they receive. This is a great option for students who come from low-income families.

What is required?

The requirements for the student grant program are very similar to the requirements of the student loan program. The student grant program is available for part-time and full-time students. Being able to prove that you are financially in need of help is the most important part.

If you are a student in need do not hesitate to contact or to visit the website of the Canadian Government and apply for this program. Investing in yourself is the first step to take if you’re looking to change your lifestyle and transform your future.

Rating of 4/5 based on 7 votes.

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

Red American Express® Card

Red American Express® Card
Ends April 30, 2023

Earn up to 12,000 bonus Scene+™ points in your first year (that’s up to $120 towards travel).

View Offer
Cashback & Bonus Offer

Cashback & Bonus Offer
Ends March 1st, 2023

New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.

View Offer
Earn 5% Cash Back With Neo

Earn 5% Cash Back With Neo
No annual fee!

Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.

View Offer
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.