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Everything you need to know about student loans in Canada

Post-secondary education is most likely one of the most expensive life experiences you will ever have. Since education is expensive, you may want to consider financing through a student loan.

Student loans are essentially debt, and with limited earning potential, it can be difficult to repay the loan. It is not a good way to start your adult life with a huge debt and it can become very stressful for some.

Let’s take a look at how student loans work in Canada and how you can make the right decisions before signing any contract with a lender.

Federal Student Loans in Canada

If you are considering financing your university education through the Canadian government, you will have two options to consider: applying for a scholarship or taking out a loan.

application a loan through the Canada Student Loans Program should be your first option, as it allows the Canadian government to provide funding to part-time and full-time students. The total amount of financial aid will depend on the percentage of the total cost of your education compared to the amount you can reasonably afford to pay with your personal finances.

The National Student Loans Service Centre (NSLSC ) distributes all Canada Student Loans Program loans.

The total cost of your education will be determined as follows:

  • The university of your choice
  • Full course load
  • Your intention to study part-time or full-time

Full-time students:

As a full-time student with a federal student loan, you can finance up to 60% of your education. To be considered a full-time student, you must take at least 60% of a full course load. There will be exceptions if you are a student with a permanent disability.

Part-time students:

If you are a part-time student, you can receive up to $10,000 in financial aid. You can show up between 20% and 59% of the time. There are exceptions if you have a permanent disability.

To qualify for a Federal Student Loan, you must meet the following requirements:

  • Be a Canadian citizen, permanent resident, or a designated protected person.
  • Live in a province or territory that participates in the Canada Student Loans Program.
  • Maintain a suitable academic level to continue receiving financial aid.

If you are 22 years of age or older and applying for the first time, you must pass a credit check. So make sure your loan history and credit rating are satisfactory.

If you have already been approved for the full 60% as a full-time student but cannot afford the remaining 40%, you may apply for a Canada Student Grant. Unlike the Canada Student Loans Program, you do not have to repay the funds received under the Canada Student Grant.

There are seven grants available for which you can apply:

  1. Low-income families
  2. Middle-income families
  3. Dependents
  4. Part-time studies
  5. Part-time studies with dependents
  6. People with permanent disabilities
  7. Facilities and services for people with permanent disabilities

If you apply for financial assistance, your application will automatically be considered for a grant.

Provincial and Territorial Student Loans in Canada

If you are not eligible for a bursary and still need additional funds, you can apply for funding through provincial and territorial student loans. It is not always easy to obtain a student loan, both from the federal government and from provincial and territorial aid. Your province or territory will have to participate in the Canada Student Loans Program for you to receive the maximum amount of financial assistance, and not all do.

Please do your research before applying for a territorial or provincial student loan, as the application process differs from region to region. Depending on the region in which you apply, you may be eligible for funding through scholarships.

Private student loans in Canada

If you are still short on funds, you can apply for a private student loan. It’s more expensive than other high-interest options, and you may have to start repaying the loan while you’re in school.

If this is the route you choose, start with a credit union or bank where you already have an account. They may be able to offer you special rates or loan terms that apply only to their members. Even if you have a financial institution that you are used to banking with, it doesn’t hurt to research and apply to other banks to get the best deal.

When you submit a private student loan application, the lender will ask you for more information, such as:

  • Your income
  • Your credit score
  • Your borrowing history

This information will determine if you qualify for the loan. So make sure your financial situation is good before you apply. If you have a low credit score, the lender may ask you to find a co-signer before granting the loan.

What happens if your student loan application is accepted?

To apply for both a federal and provincial loan, you will only need to complete one application. Approved funds will be deposited either directly into your bank account or directly into your college account.

Federal student loans don’t start accruing interest until after you graduate, and you have a 6-month grace period after graduation before you have to start repaying the student loan.


Preparing for post-secondary education can be daunting, and you will have many decisions to make. Be sure to do thorough research to determine how you will pay for your tuition. Since student loans are a long-term commitment, make sure you choose the right loan with the best terms for you.

If you’re not sure which path to take, talk to a guidance counselor at your high school or the post-secondary institution you want to attend. They are knowledgeable and can advise you on what is best for you and your financial situation.

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Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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