The Canada Student Loans Program is a program funded by the federal government to help students pay towards their education. The Canada Student Loans Program is not the only student loan program as many provinces run their own student loan schemes, which often run in concert with the Canada Student Loan Program. Some students studying for professional qualifications can get fully commercial student loans from a number of private banks.
Eligibility for the Canada Student Loans Program
To qualify for the Canada Student Loans Program you need to be either a citizen of Canada, a permanent resident with over a year’s residency or a member of a class of protected persons (which are fairly narrowly drawn).
Terms of the Canada Student Loans Program
During a period of full time study, a loan issued by the Canada Student Loans Program is interest free. If the loan has been issued after July 1995, then the first six and a half years are also interest free, with an extra year for doctoral years. Before July 1995 this period had been ten years. Disabled students still get the ten year interest free period. Graduate programs can often last longer than six and a half years, meaning that the interest can start being charged while a student is still studying for a graduate program.
The Canada Student Loans Program will also fund part time studies, within limits. In these cases interest will be charged when the student is studying and repayments will start as soon as the study ends. Part-time loans are limited to $4,000. Provincial governments rarely provide loans or top ups to part time students.
Non repayable grants are also available to certain groups such as children from low income families or students with permanent disabilities. All students may also be able to get a Canada Millennium Scholarship Foundation Bursary, also known as a CMS Grant. Other grants can be provided by provinces, and these can vary dramatically in the amount available and the conditions attached.
Applying for the Canada Student Loans Program
To apply from the Canada Student Loans Program, the student must approach the provincial government where they live, usually defined as the province where the student has last lived for twelve consecutive months before becoming full time student. Provincial loans should also be applied for in this way.
What loans are available through the Canada Student Loans Program
The Canada Student Loans Program will loan up to 60% of assessed need or $210 per week of full time study. This figure will be available per year, with the loan year starting on August 1. The balance is usually provided through a loan issued by the provincial government. Interest can either be on a fixed or floating basis, with a premium on the less risky (for the lender) fixed option.
The Canada Student Loans Program was created in 1964, replacing the Dominion-Provincial Student Loan Program. The Dominion-Provincial Student Loan Program matched grants from the provincial governments with federal government grants and made its first grant in 1939.
Since 2000 student loans have been administered by the National Student Loans Service Centre (NSLSC). If a student defaults on their loan then the Canada Revenue Agency will collect the loan through the income tax system.
A number of programs under the Canada Student Loans Program to help graduates with financial difficulty were consolidated and replaced with the Repayment Assistance Program in 2009. The Repayment Assistance Program is only available to Canadian residents.