Student Loan Guide

Types of Student Loans in Canada

• ⬥Canada Student Loans (federal): Interest-free as of 2023! No interest charges on the federal portion.
• ⬥Provincial student loans: Interest rates vary by province. Some provinces have also eliminated interest.
• ⬥Private student loans/lines of credit: From banks. Usually higher interest rates (prime + 1-3%).

The Grace Period

After graduating, you get a 6-month grace period before you need to start making payments on government student loans. However, interest may still accrue on provincial loans during this time (check your province).

Repayment Assistance Program (RAP)

If you're struggling to make payments, the government's RAP can help:

• ⬥Stage 1: Reduced payments based on your income (could be $0/month)
• ⬥Stage 2: After 60 months of RAP, the government starts paying down your principal
• ⬥Full forgiveness: After 15 years of RAP (10 for those with disabilities), remaining debt is forgiven

Tax Benefits

• ⬥Student loan interest tax credit: Claim interest paid on government student loans on your tax return
• ⬥Tuition tax credit: Unused tuition credits can be carried forward to future tax years

Strategies to Pay Off Faster

1. Pay more than the minimum whenever possible — even $50 extra/month makes a difference
2. Target private/provincial loans first (they charge interest; federal loans don't)
3. Use tax refunds and bonuses for lump-sum payments
4. Consider living at home for 1-2 years after graduation to accelerate payoff
5. Don't neglect your emergency fund — aim for at least $1,000 while paying off debt