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Repayment Assistance Plan (RAP) Canada 2026: How It Works & How to Apply

Updated

The Repayment Assistance Plan (RAP) is Canada’s primary safety net for student loan borrowers who can’t afford their standard monthly payments. It caps payments based on income, eliminates the possibility of interest accumulating beyond your means, and leads to full loan forgiveness if your balance isn’t paid off after 15 years.

RAP at a Glance

Feature Details
Applies to Canada Student Loans (federal portion only)
Payment cap 20% of family income above threshold
Minimum payment $0 (for income below threshold)
Stage 1 period First 10 years of RAP
Stage 2 period After 10 years of RAP
Maximum forgiveness timeline 15 years of RAP (10 years for borrowers with disabilities)
Re-application required Every 6 months
Effect on credit None — no negative impact

Stage 1 vs Stage 2: How RAP Progresses

Stage 1 (First 10 Years of RAP)

What happens Details
Monthly payment Capped at 20% of income above threshold; may be $0
Interest not covered by your payment Government pays it — your balance does not grow
Principal You make no progress on principal if payment is $0

In Stage 1, the government ensures that interest never outpaces your ability to pay. Your loan balance stays frozen (or slowly declines) rather than growing.

Stage 2 (After 10 Years of RAP)

What happens Details
Monthly payment Still capped at 20% of income above threshold
Government contribution Covers both remaining interest AND a portion of principal
Your balance Actively decreasing each month regardless of payment amount

Stage 2 is more aggressive: the government makes progress on your principal even if your income is too low to do so yourself. This ensures the loan is fully retired by year 15.

Year 15: Full Forgiveness

After 15 cumulative years of repayment assistance (not 15 consecutive years), any remaining balance is fully forgiven. The forgiven amount is not considered taxable income in Canada — no T4A is issued for RAP forgiveness.

For borrowers with a permanent disability, forgiveness occurs after 10 years of RAP.

Income Thresholds and Payment Examples

RAP payment = 20% of income above threshold. The threshold varies by family size.

Family size Approximate annual income threshold (2025–2026)
Single, no dependants ~$25,000–$33,000
1 dependant ~$30,000–$40,000
2 dependants ~$35,000–$45,000
3+ dependants ~$40,000+

Thresholds are indexed and updated annually. Use the RAP calculator at nslsc.ca for your specific situation.

Example: Single borrower, $32,000 income, threshold $28,000

  • Income above threshold: $4,000/year = $333/month
  • 20% of $333 = $67/month maximum RAP payment
  • If standard repayment would be $350/month, RAP reduces the payment to $67/month

Example: Single borrower, $24,000 income, threshold $28,000

  • Income is below threshold
  • RAP payment: $0/month
  • Government covers all accruing interest

How to Apply for RAP

Step Action
1 Log in to your NSLSC account at nslsc.ca
2 Select “Repayment Assistance” from the menu
3 Submit income documentation (CRA Notice of Assessment, T4 slips, or recent pay stubs)
4 Include spouse/partner income if applicable
5 Receive decision within 1–3 weeks
6 New payment amount begins the following billing cycle

Re-apply every 6 months. RAP approval expires after 6 months and is not automatic — missing the re-application window puts you back on your standard repayment schedule immediately.

RAP vs Other Repayment Options

Option Best for Payment reduction
RAP Low income; long-term need Up to 100% (payment = $0)
Revised payment terms Need more time, not lower income 10–30% lower payments
Lump-sum extra payments Higher income; want to pay faster N/A
Permanent disability benefit Permanent disability Full discharge

Provincial Loan RAP Equivalents

RAP applies only to the federal Canada Student Loan portion. Provincial loans have separate programs:

Province Provincial repayment assistance
Ontario Ontario Student Opportunity Grant (applies after 2 years repayment)
British Columbia BC Repayment Assistance Program
Alberta Alberta repayment assistance
Quebec Separate AFE system — own assistance programs
Others Contact your provincial student aid office

If you have both a federal and provincial loan, you may need to apply separately to your provincial office for assistance on the provincial portion.

RAP and Loan Forgiveness Programs

RAP is one of several pathways to student loan forgiveness in Canada:

Program Who qualifies Amount forgiven
RAP — 15 year forgiveness Any Canada Student Loan borrower on RAP 15 years Full remaining balance
RAP — 10 year disability Permanent disability Full remaining balance
Rural doctors and nurses Work in underserved rural area Up to $60,000
Permanent disability benefit NSLSC medical discharge Full loan discharged

See: Student Loan Forgiveness Canada for all national forgiveness programs.

Common RAP Mistakes

Mistake Better approach
Missing the 6-month re-application deadline Set a calendar reminder the month before your RAP period expires
Not applying because income “seems too high” Apply anyway — the NSLSC will calculate your exact payment; you may qualify
Ignoring provincial loan during RAP Apply separately to your province for the provincial portion
Assuming RAP handles taxes RAP does not affect your tax obligations; consult CRA separately
Defaulting instead of applying Default harms your credit; RAP payments can be $0 — there’s no reason not to apply

Sources