Student Loans – Finance Your Education

Student loans in Canada help post-secondary students cover tuition, books, living expenses, and other education-related costs. The primary source of student funding in Canada is the Canada Student Financial Assistance Program (CSFAP), which includes the Canada Student Grant (free money that does not need to be repaid) and the Canada Student Loan (which must be repaid after graduation). Applications for government funding are made through each province's student aid office, and eligibility is based on financial need.

Beyond government assistance, private student loans and lines of credit are available from banks and credit unions for students who need additional funding or who do not qualify for government aid. Major banks such as RBC, TD, CIBC, BMO, and Scotiabank offer professional student lines of credit for university, college, and professional programs (law, medicine, dentistry), with limits ranging from $15,000 to $350,000 for professional programs. Interest-only payments are typically required during the study period, with full repayment commencing 12 months after graduation.

Interest rates on Canada Student Loans changed significantly in 2023: the federal government eliminated interest on federal student loans entirely starting in April 2023, making repayment considerably more manageable for graduates. Provincial loan components still accrue interest in most provinces, though rates remain relatively low. The Repayment Assistance Plan (RAP) is available for borrowers experiencing financial hardship, allowing reduced or suspended payments based on income.

When comparing private student loan options, look carefully at the interest rate (variable vs. fixed), the grace period after graduation, and whether repayment can be deferred during periods of lower income. Credit unions such as Meridian and Desjardins often offer competitive rates for student members. Exhaust all grant and government loan options before turning to private lenders, as government funding is typically cheaper and comes with more flexible repayment protections.