Student loans and grants, explained

Most students in Canada apply for aid through one application with their province, like OSAP in Ontario, StudentAid BC or Alberta Student Aid. That one application covers both federal and provincial money.

Grants vs. loans

• Grants don’t have to be paid back. Canada Student Grants and provincial grants are based mainly on your family income and costs.
• Loans do. Usually you get a mix of a federal Canada Student Loan and a provincial loan.

Apply even if you think you won’t qualify. Grants are often bigger than people expect.

Interest

• The federal part is interest-free. Canada Student Loans have been permanently interest-free since April 1, 2023.
• The provincial part depends on your province. Some charge interest and some don’t. Check your loan agreement.

When repayment starts

You get a six-month grace period after you finish school, drop below a 60% course load, or leave your program. You don’t make payments during those six months. Repayment starts after that, usually through the National Student Loans Service Centre.

Can’t afford the payments?

The federal Repayment Assistance Plan (RAP) lowers your payments based on your income and family size. If your income is low enough, your payment can be $0 for a while. You apply online and reapply every six months. Most provinces have similar programs for their portion.

Don’t just stop paying. Missed student loan payments can hurt your credit score, and the government can take your tax refund.

Tips that save money

• Borrow only what you need. You don’t have to accept the full loan amount.
• Keep your tuition slip (T2202). Your tuition amount is recorded when you file taxes, and unused amounts cut your taxes later.
• Pay it off early if you can. There’s no penalty for paying early. But since the federal part is interest-free, any provincial loan with interest (or a credit card balance) is the one to pay off first.