How To Receive Student Loan Forgiveness In Canada

Everything You Need To Know About Student Loan Forgiveness In Canada

Student loan forgiveness is a fantastic tool that is meant to relieve the struggles of students and provide a chance to reset their financial future. A lot of Canada’s loan forgiveness programs are targeted at specific professions, such as healthcare workers, teachers, and those working in underserved rural areas. 

The government of Canada works hard to reward individuals who contribute to essential services. Eligibility for loan forgiveness depends on factors like income, loan type, and employment. Understanding the process can feel overwhelming, but with the right information, applying can be as easy as 123! In this article, we’ll explain everything you need to know and how you can receive student loan forgiveness in Canada.

Understanding Canada’s Student Loan Forgiveness Programs

The cost of higher education is expensive in comparison to some countries in Europe and Asia. The good news is there is a wide range of student loan forgiveness programs available to help you reduce or pay off your student debt.  

The Repayment Assistance Plan (RAP) 

The most popular program is the Repayment Assistance Plan (RAP) and it’s designed to help those struggling with payments by adjusting monthly amounts based on income and family size. The program is administered by the federal government and it’s primary job is to make sure that you only pay what you can afford. If your earnings are below a certain threshold, you may even qualify for further reduced or zero payments. 

You may even be eligible for the reduction of interest and in some cases, part of the principal debt to prevent it from becoming out of hand. It’s an excellent program and that’s why it’s so popular. 

The Public Service Loan Forgiveness Program

For those working in certain public service fields, there’s the Public Service Loan Forgiveness Program, which can forgive outstanding loans after 10 years of qualifying work. It’s a valuable initiative aimed at easing the financial burden of student loans for individuals working in public service roles. This program is generally for highly skilled workers such as those in healthcare, education, or social services, basically, fields that are essential to Canadian Communties. 

To qualify, individuals must consistently make their required payments while meeting program conditions, such as working in approved roles for a specified period. 

The Teachers Loan Forgiveness Program

Another option is the Teacher Loan Forgiveness program which helps reduce student debt for teachers working in underserved areas such as Indigenous or rural communities. It’s a federal program that’s aimed at offering partial loan forgiveness to teachers who work in low-income schools or educational services for a specific period of time. If you teach full-time for five consecutive years in a qualifying school, you could qualify for up to $17,500 in forgiveness on your Direct Subsidized and Unsubsidized Loans or your Federal Stafford Loans.

The application process requires careful documentation, including proof of service and a certification form from your school.

Canada Student Loan Forgiveness For Family Doctors and Nurses

In recent years, doctors have become harder to come by in Canada. For some, a major deterrent is the cost of medical school which can be tens of thousands of dollars. That’s why the government of Canada has introduced the Canada Student Loan Forgiveness Program for Doctors and Nurses. Eligible family doctors can receive up to $40,000 in loan forgiveness, while nurses and nurse practitioners can qualify for up to $20,000. To benefit, you must work in your field for at least 12 months and reapply annually for continued forgiveness. 

Who Is Eligible for Loan Forgiveness in Canada?

For most student loan forgiveness programs in Canada, the eligibility requirements are very specific. Below is a list of eblibility requirements for each program

The Repayment Assistance Plan (RAP) 

• Must be a Canadian citizen, permanent resident, or protected person.
• Applies only to federal student loans under the Canada Student Loans Program. Provincial loans may require separate applications.
• Your loan must be in good standing and not in default.
• Must demonstrate financial hardship, typically through income and family size verification.
• You must be actively repaying your loan or within your six-month grace period post-graduation.
• Your income must fall below a certain threshold (this is subject to change) adjusted based on family size, to qualify for reduced or zero payments.
• Assistance is granted for six months at a time, requiring reapplication if continued support is needed.

The Public Service Loan Forgiveness Program

• Must be a full-time teacher in a qualifying role.
• Serve in a designated low-income or underserved school or area.
• Teach for at least five consecutive academic years.
• Teachers in high-demand fields like math, science, or special education may receive higher forgiveness amounts.
• Must hold qualifying loans, such as federal or provincial student loans.
• Obtain certification from your school administrator verifying your role and service period.
• Loans must be in good standing, not in default.

The Teachers Loan Forgiveness Program

• Must be a full-time teacher in a qualifying role.
• Serve in a designated low-income or underserved school or area.
• Teach for at least five consecutive academic years.
• Teachers in high-demand fields like math, science, or special education may receive higher forgiveness amounts.
• Must hold qualifying loans, such as federal or provincial student loans.
• Obtain certification from your school administrator verifying your role and service period.
• Loans must be in good standing, not in default.

Canada Student Loan Forgiveness For Family Doctors and Nurses

• Must be a family doctor, nurse, or nurse practitioner.
• Work in a designated rural or remote community.
• Provide service for at least 12 months.
• Hold a Canada Student Loan in good standing.
• Reapply annually for continued loan forgiveness.

Provincial Student Loan Forgiveness Programs

Not only are there federal student loan forgiveness options, there are some provincial forgiveness programs available too. Not every province offers student loan forgiveness so here is a break down of what is offered by the applicable provinces. 

British Columbia

BC offers it’s very own program called the B.C. Loan Forgiveness Program, which provides forgiveness for provincial student loans to professionals like doctors, nurses, nurse practitioners, pharmacists, midwives, and even teachers. This program is particularly focused on those serving in remote, rural, or Indigenous communities, where access to essential services is often limited.

The program forgives up to 20% of your provincial student loan for each year of eligible service, up to a maximum of five years. 

Eligibility

• Must be a licensed healthcare professional (e.g., doctor, nurse).
• Provide services in a rural or remote community in BC.
• Commit to a minimum service period, typically 12 months.
• Have Canada Student Loans in good standing.
• Complete and submit the required application forms with proof of eligibility.

Quebec

In Quebec, the Quebec Loan Remission Program is available to help students who successfully complete their studies within a set timeframe by forgiving their student loan debt. For example, if you complete a university undergraduate degree, you could be eligible to have up to 15% of your total loans forgiven. 

Eligibility

• Must have received loans under Quebec’s Loans and Bursaries Program.
• Completion of studies within the prescribed timeframe.
• Successfully obtain the diploma or degree for the program.
• Must not have defaulted on loans or declared bankruptcy.
• Ensure all loan documentation is submitted and up to date.

PEI

If you live in PEI, you’re in luck! The Prince Edward Island (PEI) Debt Reduction Program is a provincial initiative that aims to help with debt reduction depending on the students level of study and successful completion of their program. In order to qualify, you must have borrowed at least $6,000 annually in federal or provincial student loans to qualify for the grant. 

For those who began their studies before August 1, 2018, the program offers a grant of up to $2,000 per year of study. This can be applied directly to your unpaid provincial loan balance, provided you graduate within one year of submitting your application.

If your education started after July 31, 2018, you could be eligible for a grant of up to $3,500 per year of study. The grant funds can also be used to pay off your provincial loan balance, but you must graduate within three years of filing your application, based on guidelines effective March 31, 2019.

Additional Eligibility

• Must be a resident of Prince Edward Island.
• Successfully graduate from an eligible post-secondary program.
• Hold PEI student loans issued through the province.
• Maintain satisfactory academic progress throughout your studies.
• Submit your application within the specified timeframe after graduation.

Nova Scotia

The Nova Scotia Student Loan Forgiveness Program can help qualified students pursue higher education, remain in the province and forgive up to 100% of the Nova Scotia student loan amount for qualifying individuals. If you graduated after August of 2015, Loan forgiveness is automatically applied when you file your application, provided you meet all criteria. 

• Must have earned a first undergraduate degree, diploma, or certificate.
• Graduation date must be after August 2015.
• Attended a recognized post-secondary institution in Nova Scotia.
• Nova Scotia Student Loans must be in good standing.
• Must not have received funding from similar programs outside Nova Scotia.

How To Apply For Student Loan Forgiveness

Now that you’ve had the chance to fully understand the programs available and eligibility, you can start the next step which is actually applying for the forgiveness. 

After you’ve determined your eligibility, you’re going to want to gather all the necessary documents, such as proof of employment, your loan details, and payment history. 

Once you’re prepared, complete the required application forms. Most can be completed online but must be mailed to The National Student Loans Service Centre P.O. Box 4030 Mississauga, ON L5A 4M4. For PSLF, this involves submitting the Employment Certification Form yearly. 

FAQ’s

How Long Do I Need To Work To Qualify For Loan Forgiveness?

Most programs require service for a minimum of 12 months in an underserved area, though some may have longer commitments.

Are Provincial And Federal Loan Forgiveness Programs Separate?

Yes, federal and provincial programs operate independently, and you may be eligible for both depending on your circumstances.

Will Filing For Bankruptcy Help Reduce My Student Debt?

Filing for bankruptcy in Canada can only reduce or eliminate student debt if you’ve been out of school for at least seven years, with exceptions for extreme financial hardship.

Conclusion

Student loan forgiveness is available in Canada and can be very beneficial depending on your profession and how much you owe. The programs above can help you get back on track, so you can focus on building your career without the stress of excess debt.