Student Loan Forgiveness in Canada

If you’re a Canadian who has had a student loan in the past or are looking into applying for a loan, you may be interested to know if there’s relief or forgiveness. Sometimes, it’s not financially possible to pay back your loans. They gain interest once you’ve completed your education, making it even more challenging to pay it back.

Statistics have found that about half of the students who apply for a student loan will enter into the Repayment Assistance Plan because their loan payments are too high. If you’re a Canadian who’s struggling to pay off your student loan debt, it’s possible to get loan forgiveness in a few different ways.

However, the Repayment Assistance Plan might be a better option. This is when the federal and provincial government share the cost of the loan with you. This allows students to pay back only what they can afford. There’s a grace period of 6 months as well if you need to catch up on finances to start paying back your student loan. This plan isn’t a student loan forgiveness but not to worry, there are other options.

Doctors And Nurses In Canada

For those in the medical field like doctors, nurses, and residents in family medicine, the Canada Student Loan forgiveness plan is an option through the federal government. It’s only the federal portion of the loan however. If you borrowed money from the province or territory, that must be paid back.

Eligibility For Student Loan Forgiveness For Doctors and Nurses in Canada

You must qualify for Canada Student Loan forgiveness. To do this, you have to have a Canada Student Loan in good financial standing. You must be work as an eligible medical professional in an area that’s remote or underserved that otherwise wouldn’t have healthcare. While being employed in a remote community or underserved area, you have to provide at least 400 hours of service within a year.

Eligible Medical Professionals

Medical professionals that are working in a remote or underserved area that eligible for the forgiveness of your loan include:

  • Family doctor
  • Registered Nurse
  • Registered Psychiatric Nurse
  • Registered Practical Nurse
  • Licensed Practical Nurse
  • Nurse Practitioner
  • Family Medical Resident
  • Amount That Can Be Forgiven

Those in the medical field that qualify will get up to $40,000 in forgiveness over a five year period. Nurses are eligible for up to $20,000 over a five year span. It’s applied to the unpaid loan principle when the 12-month service period is over. You have to keep paying interest only payments.

Provincial Student Loan Forgiveness Programs

While there is a federal student loan forgiveness option, there are also programs in place that offer provincial and territorial student loan forgiveness.

B.C. Loan Forgiveness Program

Students that are being educated for qualifying occupations that are considered essential can have student loans forgiven. The caveat is that you work for a publicly-funded operation in an under served area. That, or you must work with children in an occupation that has a shortage of workers. For those who are eligible, the BC Government forgives the provincial portion of your student loan up to 20% over a five year span. When you’ve completed five years of work, you may receive a full pardon from your student loan.

Who is Eligible For The BC Loan Forgiveness Program

You have to be paying off your BC student loan and have graduated from an accredited college, university, or other post-secondary education facility. You aren’t enrolled in full-time studies any longer. You need to work between 99 to 400 hours in-person within a year. You need to be employed in an eligible job at a publicly funded facility in a remote or under served community or with children.

Occupation in Under Served Communities

The following are jobs that are eligible when going to work in remote or under served areas in BC:

  • Audiologist
  • Diagnostic Medical Sonographer
  • Medical Laboratory Technologist
  • Midwife
  • Nurse (licensed practical, practitioner, registered, registered psychiatric)
  • Physician (including residents)
  • Speech-Language Pathologist
  • Occupational Therapist
  • Physiotherapist
  • Teacher Educator
  • Respiratory Therapist

Quebec Loan Remission Program

If you’re a Quebec resident during your years of education, you can get up to 15% of your student loan from Quebec forgiven. To qualify, you have to complete studies within a certain period or get a bursary from the Loans and Bursaries Program every year you studied.

Amount of study you need to complete:

  • 27 months – college-level technical program
  • 24 months – undergraduate university program over 3 years
  • 32 months – undergraduate university program over 4 years
  • 16 months – master’s program without a thesis
  • 20 months – master’s program with a thesis
  • 32 months for a doctorate program

Eligibility For Quebec Loan Remission Program

You have to be granted a bursary under the Loans and Bursaries during each award year you studied. You also have to have completed an education program that gives you an undergraduate degree over a certain period of time. Students are eligible if they finished a college-level training program that gives them a Diploma.

PEI Debt Reduction Program

PEI offers a debt reduction plan for residents of PEI. You have to have borrowed a minimum of $6,000 in federal or provincial student loans every year you were studying. This can lead to a special grant to reduce the total amount of debt from the student loans.

Eligible Academic Periods

If you started your studies before August, 2018, you may qualify for the PEI debt reduction grant. It’s good for up to $2,000 for every year you studied. This can be applied onto your unpaid student loan debt in PEI. You have to graduate from your program within a year of filing for the application.

Who Is Eligible For The PEI Debt Reduction Program

If you graduated during the academic year before August, 2018, you can submit an application within a year of your graduation date. You have to submit the application and send in a copy to prove you graduated with a certificate, degree, or diploma.

If you graduated after July 31, 2018, you have a deadline to apply, which is three years after your date of graduation. Apply with the documents mentioned above along with 2 pieces of ID that you were a resident of PEI for 6 months before you submitted the application. This includes a letter from an employer in PEI or a lease agreement proving you had a home in PEI.

Nova Scotia Student Loan Forgiveness Program

The Student Loan Forgiveness Program in Nova Scotia helps you repay the loan you received from the province. This includes a total of $20,400 over a five year period. To qualify, you had to graduate from a non-professional undergraduate program in the province. Your student loan would also need to be issued on or after August 1, 2015.

Who Is Eligible For The Nova Scotia Student Loan Forgiveness Program

Your first degree is eligible for the program and you complete the full degree within 8 years of starting it. Eligible degrees can include transfer of credits through the Letter of Permission.

Bankruptcy Forgiveness

If you are in danger of declaring bankruptcy because you can’t afford to pay back your student loan, there’s the potential of qualifying for the Repayment Assistance Plan. If you do declare bankruptcy, you no longer have to pay it back as long as you do so at least 7 years after completing your studies.

Hardship Provisions

If file for bankruptcy after a period of 7 years, your student loan may be abolished. If your student loan is causing you hardship and you have legitimate proof of this, the waiting period can be reduced to five years.

It’s applicable if you can prove to the court that you’ve acted responsibly when it comes to payment of student loans. You can prove you’ve gone through financial difficulties that have made it impossible for you to pay off the student loan. The court will consider whether you are eligible for loan forgiveness by looking at how you used the student loan money and how much effort you’ve put into paying it back. They will also look into whether you’ve used other assistance programs in Canada.

Frequently Asked Questions About Student Loan Forgiveness in Canada

Do student loans get transferred to the estate if I die?

No, any federal student loans are abolished if you pass away. They aren’t transferred to the family or your estate. Private student loans will be transferred to your estate however.

Will bankruptcy get rid of my student loan?

Yes, it can. You would have to be eligible to be forgiven and have to wait at least 7 years since you finished your studies.

What happens when you miss student loan payments?

When you miss a student loan payment, you’ll get a notice from the lender asking for payment. You may have to pay fees as well as interest charges that may accrue. If you miss many month at a time, your loan provider is going to send your account to a collection agency. When it comes to a federal student loan, this is sent to CRA for collection. This may include having your account frozen or other means to get the money back.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Loraine Couturier

Loraine Couturier is a Canadian that has been working as a freelance writer for the past ten years, specializing in topics that include personal finance, medical journals, and the online gaming industry. She is a published author, digital marketing expert and an authority in the fields in which she writes about.