Student Debt Help in Canada: Where to Start

First, identify who lent you the money

Start with your loan statements rather than the reason you borrowed. Money used for tuition is not automatically a government student loan. You may have a federal loan, a provincial loan, a private student line of credit and ordinary credit card balances at the same time.

Use separate rows even when you make one combined payment. That makes it easier to ask which part is covered by a proposed change and which part will still need attention.

Check repayment assistance before a payment fails

The federal Repayment Assistance Plan (RAP) may reduce a qualifying borrower's payments, potentially to zero, based on their circumstances. Eligibility includes repayment status, residency rules and being up to date on payments. Approval lasts six months, and you must reapply to continue. Provincial criteria can differ. Check the current RAP eligibility and application steps.

If you have already missed payments, contact the NSLSC and your provincial administrator to ask about the options for your account status. Do not assume that an application automatically pauses a payment or repairs a default. Ask what remains due while your request is being considered.

Keep the decision notice and add the renewal date to your calendar. If your income changes, tell the administrator and ask what information it needs. For borrowers with disabilities, ask specifically about RAP-D and other applicable assistance rather than assuming the standard plan is the only route.

Interest-free does not mean payment-free

Interest stopped accruing on Canada Student Loans and Canada Apprentice Loans on April 1, 2023. Any interest owed from before that date remains payable. That federal change does not erase the principal or automatically cover provincial and private borrowing. Read the federal interest announcement.

For example, Ontario's official OSAP guidance distinguishes the interest-free federal portion from its provincial portion, which still carries interest. Check Ontario's repayment guidance or the equivalent page for your province. Before refinancing government loans into a private product, compare the interest, fees and assistance features you would give up.

Understand the seven-year rule before filing

The Bankruptcy and Insolvency Act gives qualifying government student loans special treatment. The relevant seven-year period is measured from when you ceased to be a full-time or part-time student under the applicable legislation, not from your first loan or first repayment. The date must be assessed for your study history. See section 178.

Returning to school can matter. StudentAid BC, for example, explains that the count starts after the most recent study period, even if no new aid was received. Read StudentAid BC's explanation. Bring all study periods to an LIT rather than selecting the graduation date that seems most favourable.

The five-year hardship provision is not automatic

The OSB explains a court application available to someone who is or has been bankrupt after at least five years from ceasing to be a student. The court must be satisfied about good faith and continuing financial difficulty that prevents repayment. This is a bankruptcy-related hardship route, not an automatic five-year release through a consumer proposal. Read the OSB's student loan guidance.

Ask an LIT or insolvency lawyer which rule applies before making a filing decision. A proposal addressing other unsecured debts may change your household budget even when a student loan survives, but that remaining payment must still be planned for.

Prepare for a useful conversation

• List every loan, its administrator and any co-signer.
• Collect study start and end dates, including later returns to school.
• Bring RAP applications, decisions and collection correspondence.
• Write down reliable take-home income and essential monthly costs.
• Ask what happens to each debt under each option, and what payments continue.

Our guide to debts included in a consumer proposal explains other exceptions. ConsumerProposal.ca is an educational publisher, not an LIT; an individual assessment is needed to determine your loan treatment.