Student Loan Programs for Canadians

By Caitlin in Loans
Student Loan Programs for Canadians

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.


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