When does student loan repayment start in Canada?

Federal student loan repayment begins 6 months after you cease to be a full-time student. This 6-month period is called the non-repayment period (formerly called the grace period). During this period, you do not need to make payments, and since a 2023 federal budget change, interest does not accumulate on the federal Canada Student Loan during this period either. Ontario student loan repayment timing follows the same schedule. Your repayment start date is automatically set by the National Student Loans Service Centre (NSLSC) based on your enrollment records.

What is the NSLSC and how do I use it?

The National Student Loans Service Centre (NSLSC) at nslsc.canlearn.ca is the federal government's designated loan servicer for Canada Student Loans and most provincial student loans (Ontario, Nova Scotia, New Brunswick, PEI, and others). You use it to: view your loan balances and payment history; set up and manage direct debit for payments; apply for the Repayment Assistance Plan (RAP); request a repayment pause; update your contact and banking information. Create an account before your first payment is due — do not wait until you miss a payment to set it up.

What is a standard repayment plan for student loans in Canada?

The standard repayment plan for government student loans is 10 years (120 monthly payments) of equal principal and interest. The NSLSC calculates your monthly payment based on your total loan balance and the applicable interest rate. Federal Canada Student Loans currently charge the prime rate (variable) or prime + 2% (fixed) after the non-repayment period ends. You can choose between fixed and variable rates. If 10-year payments are unaffordable, the Repayment Assistance Plan (RAP) or an extended plan are available.

Can you pause student loan payments in Canada?

Yes. If you return to school full-time at a designated institution for at least 60% of a full-time course load, your student loan payments are automatically paused and no interest accrues on the federal loan during that period. You can also apply for a repayment pause (called a "no-payment period") of up to 6 months if you are experiencing temporary financial hardship — interest may still accrue during this period if you are not on RAP. The Repayment Assistance Plan is the more powerful long-term option; a no-payment period is a short-term bridge.

What happens if you miss a student loan payment in Canada?

Missing a payment does not result in immediate severe consequences, but a loan is considered in default after it is 270 days (9 months) overdue. At that point: the CRA can intercept your tax refunds; the Canada Revenue Agency can pursue collection; your credit bureau file is updated with a collection notation; the government can take legal action including wage garnishment. Before reaching this point, contact the NSLSC — there are tools to prevent default including RAP, payment deferrals, and renegotiating your plan. Proactive contact always produces better outcomes than ignoring the debt.

Can student loans be discharged in bankruptcy in Canada?

Government student loans (federal and provincial) cannot be discharged in bankruptcy until 7 years after you last ceased to be a full-time or part-time student. This is a specific rule that overrides the normal bankruptcy discharge for unsecured debts. After 7 years out of school, student loans can be discharged in bankruptcy like other unsecured debts. A court can reduce this to 5 years if you can demonstrate that repayment would cause "undue financial hardship." Private student loans (e.g., a bank student line of credit) do not have this restriction and can be discharged in bankruptcy after your waiting period like any other unsecured debt.

What interest rate applies to Canada Student Loans?

For loans taken after November 1, 2019: you can choose a variable rate (prime rate) or fixed rate (prime + 2%). The prime rate as of early 2026 is approximately 4.95%, so variable = 4.95%, fixed ≈ 6.95%. You can switch between fixed and variable rates once per calendar year by contacting the NSLSC. Note: as of April 1, 2023, the federal government eliminated interest on Canada Student Loans and Canada Apprentice Loans permanently — no interest charges at all, not just during the non-repayment period. Verify current rules at nslsc.canlearn.ca as policy may change.

Student Loan Repayment Guide Canada: NSLSC, RAP, and Your Options

Your student loan repayment timeline is automatic — 6 months after you leave school, payments begin. Understanding how the NSLSC works, what tools are available, and what to do if you can’t make payments prevents the serious consequences of default.

Your repayment timeline

Stage	When	What happens
Enrolled full-time	During school	No payments; no interest on federal loan
Non-repayment period	6 months after leaving school	No payments required; no federal interest
Repayment begins	Month 7	First payment due at NSLSC
If return to school	Any time	Payments automatically pause again
Default	270 days overdue	CRA collection, credit damage, legal action

The National Student Loans Service Centre (NSLSC)

The NSLSC manages federal Canada Student Loans and most provincial student loans for provinces that have integrated with the federal system (Ontario, Nova Scotia, New Brunswick, PEI, and others). Set up your NSLSC account before repayment begins at nslsc.canlearn.ca.

What you can do in NSLSC

View your current loan balance, principal, and accrued interest
See your payment history and upcoming due dates
Set up pre-authorized debit for automatic monthly payments
Apply for the Repayment Assistance Plan (RAP)
Request a repayment pause or change your repayment plan
Update your address, phone, and banking information
Download your ROESL (Record of Student Loans) for tax purposes

Quebec and British Columbia

Quebec and BC administer their own provincial student loan programs independently and do not use the NSLSC for provincial loans. Federal Canada Student Loans for Quebec/BC residents are still managed by NSLSC, but provincial loans go through:

Quebec: Aide financière aux études (afe.gouv.qc.ca)
BC: StudentAid BC (studentaidbc.ca)

Standard repayment plan

The default repayment plan is 10 years (120 equal monthly payments).

Example:

Loan balance at repayment start: $28,000
Interest rate: prime rate (4.95% variable as of early 2026)
Monthly payment: approximately $295
Total interest over 10 years: approximately $7,400

You can also choose the following timelines (longer plans reduce monthly payments but increase total interest):

Plan	Monthly payment ($28K, 4.95%)	Total interest
10 years	~$295	~$7,400
15 years (RAP extension)	~$220	~$11,600

Make extra payments anytime without penalty — there is no prepayment fee on government student loans.

Interest rates on Canada Student Loans

As of April 1, 2023, the federal government removed all interest on Canada Student Loans and Canada Apprentice Loans permanently. This applies to:

New loans issued after April 1, 2023
Existing loans already in repayment — interest was stopped going forward

Effective rates as of April 1, 2026:

Loan type	Interest rate
Canada Student Loan (federal)	0% (no interest)
Ontario Student Loan (provincial)	Prime rate variable OR fixed; varies — confirm with NSLSC
BC provincial student loan	Check studentaidbc.ca
Quebec provincial loans	Check afe.gouv.qc.ca

This 0% change on federal loans is significant — it means the only interest accumulating is on any provincial loan portion.

Repayment Assistance Plan (RAP): the most powerful tool

If your income after graduation is low, the RAP drastically reduces or eliminates required monthly payments. It is available through the NSLSC to federal loan borrowers.

How RAP works

Apply through the NSLSC (online form, takes ~15 minutes)
NSLSC assesses your family income and size
Your required monthly payment is set at a maximum of 20% of your monthly net income above a basic living allowance
If your income is below the threshold: your required payment is $0
The government covers any shortfall between your required payment and the actual loan payment needed

RAP income thresholds (approximate 2025)

Family size	Monthly net income for $0 payment
1 (single)	Up to ~$2,083/month (~$25,000/year)
2	Up to ~$2,917/month (~$35,000/year)
3	Up to ~$3,583/month (~$43,000/year)
4	Up to ~$4,167/month (~$50,000/year)

Maximum on RAP: You can receive RAP for up to 10 years total (or 15 years if you have a permanent disability). After those RAP periods:

Any remaining federal loan balance may be forgiven
Provincial loan forgiveness depends on provincial rules

RAP Stage 2

If you are still in repayment after 10 years (or after receiving 5 years of RAP), you enter “Stage 2” RAP where the government also covers principal — meaning your loan balance can actually shrink faster.

How to apply for RAP

Apply online at nslsc.canlearn.ca
Your income is verified via CRA NETFILE authorization or income documentation
You reapply every 6 months to confirm continued eligibility
Continue making your normal payment until you receive notice of your RAP payment amount

Returning to school: loan pause

If you return to school full-time (60% course load or more), your student loans automatically enter a new non-payment period. You do not need to apply — your institution reports your enrollment to NSLSC.

What you should do:

Confirm your enrollment is reported correctly in NSLSC after re-enrollment
If payments continue despite returning to school, contact NSLSC immediately to request a retroactive adjustment

Repayment pause (financial hardship short-term)

If you face temporary financial difficulty but don’t qualify for RAP or want a short bridge, you can request a repayment pause of up to 6 months (sometimes extendable). During a pause:

No payment is required
Interest may accrue depending on loan type and current policy
Your credit is not negatively reported as long as the pause is properly documented

This is a short-term fix. If you expect income to remain low for a year or more, RAP is the better solution.

What happens if you miss payments and go into default

A loan becomes delinquent after the first missed payment. At 270 days (9 months) past due, it enters default.

Consequences of default:

CRA intercepts your tax refunds and applies them to the debt
CRA can garnish up to 30% of your wages without a court order (government collection powers are extraordinary)
Default is reported to Equifax/TransUnion — major credit damage (stays 6–7 years)
Legal action, potential judgment

How to get out of default:

Contact NSLSC before it reaches 270 days — earlier is far easier
Make a payment (even partial) to restart the delinquency clock
Apply for RAP to establish a scheduled payment
In some cases, a rehabilitation plan can restore your loan to good standing — allowing you to access new government student aid in the future

Tax benefit: student loan interest credit

The interest paid on government student loans is eligible for a 15% federal non-refundable tax credit (Line 31900 on your T1 return). Only actual interest paid in the current year is claimable — to carry forward up to 5 years if you have no tax owing in the year you pay it. You cannot claim interest on a private student line of credit; only government-issued student loans qualify.