Budget Basics
Repaying Your Student Loans
Decrease the Amount that You Owe
Debt reduction programs are for those who are facing long-term financial difficulty. This lowers the principle amount of your debt and reduces your monthly payments. Debt Reduction programs are available on Canada Student Loans for total reductions up to $26,000. Some provinces also offer Debt Reduction programs but their terms may differ. Contact the National Student Loans Service Center and/or your Provincial Student Assistance Office for more information.
There are eligibility requirements that you must meet to qualify for Debt Reduction. Also the amount that you qualify for depends on your financial situation as well. Click here for more information on eligibility and the application process.
Permanent Disability
If you are permanently disabled, you may have difficulty meeting your financial obligations. If you qualify for the Permanent Disability Benefit, you will not have to repay your loans.
This benefit applies to Canada Student Loans and integrated loans in Saskatchewan, New Brunswick, Newfoundland, and Labrador.
There are two main eligibility requirements. You must have a permanent disability and you must be experiencing financial hardship repaying your loan.
There are also special criteria that apply to this loan depending on what type of loan you have.
You can contact the National Student Loans Service Center for an application package.
Tax Relief
The Government of Canada offers help to students in the form of tax relief. These include:
- • 17% tax credit on the interest paid on your loans each year
- • Education claim of $400 per month on your tax form for full-time studies
- • A non-refundable textbook tax credit of $65 for each month you are enrolled in a course that entitles you to a full-time education tax credit
- • A full tax exemption for all post-secondary scholarships and bursaries
- • Tax free RRSP withdrawals for the purposes of Lifelong Learning
Check out the Canada Revenue Agency’s Student and Income Tax Brochure for more information.
