How does the Canadian Student Loan program work?

Combining full-time higher education courses with a part-time job may be quite of a challenge, especially for a young and rather inexperienced person. To prevent such an unwanted division of the students' attention, the always pragmatic and far-seeing Canadian authorities have developed the Canada Student Loan Program (CSLP) which, in its essence, is meant to provide loans and financial assistance to Canadian citizens who attend post-secondary education in most provinces and territories of the country.

Canada Student Loan Program is a government-funded program, available to students with financial difficulties, living in most of the country’s provinces. It should be noted that the local authorities in each province work in partnership with the federal government in order to provide financial assistance to students under CSLP – the government provides up to sixty percent of the granted loan, but not more than $210 per week of study, while the remaining forty percent are provided in the form of provincial or territorial financial assistance. It has been estimated that over four million students have received loans worth up to thirty-two billion dollars since the start of CSLP in 1964. In the period 2006-2007, over 345,000 students received loans under the program that were worth over two billion dollars.
To qualify for financial assistance under CSLP, the candidate must be a Canadian citizen, permanent resident or a protected person who has been accepted to or enrolled in a program and pursuing a degree, diploma or certificate program. The study should be at least twelve weeks long and taking place at a designated higher education institution.

Students from low income families may apply for financial assistance under Canada Student Loan Program through their local student aid office. Prospective students should keep in mind that CSLP is not available to students whose permanent address is in Quebec, the Northwest Territories or Nunavut. The amount of funding an applicant may obtain under CSLP depends on several factors such as the province or territory in which the applicant resides, his or her education-related costs, including tuition fees, study materials and supplies, costs for the purchase of a computer, and expected financial assistance from his or her parents.

Students who have been granted loans under CSLP must start paying them off half a year after they had graduated or discontinued attending classes on a full-time basis. Although students are not required to pay monthly installments on their loans during the first six months, they are not exempt from paying the interest that accumulates on their loan. Finally, if for some reason the student finds it difficult to pay off the loan, the Repayment Assistance Plan allows him or her to pay back only what they can afford. The new plan had replaced the Debt Reduction in Payment and Interest Relief Measures. During the first phase of the plan, borrowers make reasonable payments or no payments. The government covers the interest while the borrowers make payments of no more than 20 percent of their current income. The duration of the first stage is up to five years. The second stage is intended to help borrowers who continue to experience financial difficulties. The government continues to pay the interest and the borrower repays the remainder of the debt over a period of 10 years.


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