The Government of Canada recognizes the challenges students face in accessing post-secondary education and managing their debt as they transition into the labour force, and remains committed to ensuring that post-secondary education is affordable and student debt manageable, even as the cost of education continues to rise. The Government of Canada, through the Canada Student Loans Program, provides targeted grants and needs-based loans to help students access post-secondary education and offers the Repayment Assistance Plan to borrowers experiencing financial difficulty.

A series of enhancements have been introduced to Canada Student Grants and Loans since 2015 to improve the availability of supports to students.

Canada Student Grantsprovides non-repayable financial assistance to students from low- and middle-income families. In recent years, the Government has increased Canada Student Grants by 50% and expanded eligibility to more students, especially benefiting students from low-income families. As a result, over 478,000 students from low- and middle-income families are receiving up to $3,000 per year in support they do not need to repay, and students with children and students with disabilities receive even more through targeted grants. Thanks to these enhancements, almost one-third of a student’s total federal financial assistance comes from grants that do not need to be repaid, and this contributes to lowering their overall debt load in the long- run.

The Government of Canada also expanded eligibility for the Repayment Assistance Plan (RAP) that provides support to borrowers who have difficulty repaying their Canada Student Loans. Canada Student Loan borrowers using RAP do not have to make a payment until they earn at least $25,000. RAP also makes it easier for student loan borrowers to manage their debt by paying back what they can reasonably afford, and ensures that borrowers who qualify will have an affordable monthly payment for a maximum of ten years after they leave school. In 2018-19, more than 330,000 borrowers benefited from the Repayment Assistance Plan, of which 85% were not required to make any payments on their loans.

Furthermore, beginning November 1, 2019, the Government lowered the interest rate on Canada Student Loans and made the six-month non-repayment period interest-free. The floating interest rate, the rate chosen by approximately 99% of Canada Student Loan borrowers, was lowered to prime, from its previous rate of prime plus 2.5%. The fixed rate was also reduced from prime plus 5% to prime plus 2%. Together, these measures will help over 1.1 million borrowers and provide the average borrower with savings of approximately $2,000 over the life of their loan.

Recognizing that post-secondary students and their families may be facing financial hardship due to the COVID-19 pandemic, we have also announced a $1.9 billion investment in enhancements to the Canada Student Loans Program: