A student loan repayment calculator determines the monthly payment required to repay a student loan within a specified period. As of April 1, 2023, federal Canada Student Loans charge zero interest; only the principal must be repaid. Provincial student loans may still carry interest depending on the province.
Federal Interest Elimination (April 2023)
The 2023 federal budget permanently eliminated interest on Canada Student Loans and Canada Apprentice Loans, effective April 1, 2023 (Canada Student Financial Assistance Act, amended). Loans in good standing accrue no interest during repayment. Loans in default continue to accrue interest at the prime rate plus 1% until brought back into good standing through a rehabilitation agreement with the CRA.
For federal loans, the repayment formula simplifies to: monthly payment = outstanding balance / number of months. There is no interest component. A $25,000 federal loan on a 120-month standard term requires $208.33 per month.
Provincial Loan Interest Rates (2025)
| Province | Interest Rate |
|---|---|
| British Columbia | 0% (eliminated 2019) |
| Ontario | Prime rate |
| Alberta | Prime rate |
| Manitoba | Prime plus 1% |
| Saskatchewan | Prime plus 1% |
| Nova Scotia | Prime rate |
| New Brunswick | Prime rate |
| PEI | Prime rate |
| Newfoundland and Labrador | 0% (eliminated 2022) |
Repayment Assistance Plan (RAP)
The Repayment Assistance Plan (RAP) is administered by the National Student Loans Service Centre (NSLSC). Eligibility requires an annual gross family income below a threshold that scales with family size. The maximum monthly payment under RAP is 20% of gross monthly family income.
If the RAP-calculated payment is less than required to repay the loan within the standard 10-year period, the Government of Canada pays the interest shortfall during Stage 1 (first 5 years or first 10 years in repayment). In Stage 2, any remaining principal is eligible for government-covered reduction. Borrowers must reapply for RAP every 6 months.
Canada Student Grants (2025-26)
Grants reduce the amount that becomes a loan and therefore reduce future repayment obligations. For 2025-26, federal grant amounts are:
- Full-time students from low-income families: up to $4,200 per study year
- Full-time students from middle-income families: up to $1,680 per study year
- Part-time students: up to $1,920 per study year
- Students with permanent disabilities: up to $4,200 per study year
- Students with dependants: up to $200 per week per child
Tax Credit for Provincial Loan Interest
ITA s.118.62 allows a 15% federal non-refundable tax credit on interest paid in the year on a qualifying student loan under the Canada Student Financial Assistance Act or equivalent provincial legislation. Since federal loan interest is zero, the credit applies primarily to provincial loan interest in provinces that still charge it. Unused credit amounts can be carried forward up to 5 years.
Bankruptcy and Student Loans
Student loans are not automatically discharged in bankruptcy. Under Bankruptcy and Insolvency Act s.178(1)(g), student loan debt remains enforceable after discharge unless the borrower has been out of school for at least 7 years. A court may reduce the period to 5 years if the borrower can demonstrate undue hardship under BIA s.178(1.1).
Source
Canada Student Financial Assistance Act; National Student Loans Service Centre (NSLSC) repayment information; Budget 2023 interest elimination announcement; ITA s.118.62; Bankruptcy and Insolvency Act s.178.
Frequently asked questions
- How is a Canadian student loan repayment amount calculated?
- Monthly payment = P x r / (1 - (1+r)^-n), where P is the outstanding loan balance, r is the monthly interest rate, and n is the number of repayment months. Federal Canada Student Loans as of April 2023 charge no interest. Provincial loans still carry interest in most provinces. The National Student Loans Service Centre (NSLSC) applies the same amortisation formula.
- Do Canada Student Loans still charge interest?
- No. As of April 1, 2023, the Government of Canada permanently eliminated interest on Canada Student Loans and Canada Apprentice Loans under the Canada Student Financial Assistance Act. Borrowers repay only the principal. This change applies to loans in good standing; loans in default continue to accrue interest.
- What is the repayment period for a Canada Student Loan?
- The standard repayment period is 10 years (120 months) after the non-repayment period ends. The non-repayment period is 6 months after leaving full-time study. Borrowers can request extensions up to 14.5 years (174 months) through the NSLSC, which reduces the monthly payment but does not reduce the principal (no interest accrual on federal loans makes extensions less costly than before 2023).
- What is the Repayment Assistance Plan (RAP) in Canada?
- The Repayment Assistance Plan (RAP) is a federal program under the Canada Student Financial Assistance Act. RAP caps monthly payments at 20% of family income. If the calculated payment under RAP is less than the standard payment, the Government of Canada covers the shortfall for the first 60 months. After 60 months or 10 years of repayment (whichever comes first), remaining balances may be forgiven depending on the stage of RAP assistance.
- Can I claim a tax credit for student loan interest in Canada?
- As of 2023, interest on Canada Student Loans is zero, so there is no interest to claim. For provincial student loans that still charge interest, borrowers can claim a 15% federal non-refundable tax credit on interest paid under ITA s.118.62. The credit can be carried forward up to 5 years.
- What happens if I miss a Canada Student Loan payment?
- Missing a payment does not immediately trigger default. The NSLSC allows a grace period before designating the loan delinquent. After 270 days of non-payment, the loan is declared in default and transferred to the CRA for collection. In default status, interest accrues; the CRA can withhold income tax refunds and GST/HST credit payments.
- Are provincial student loans interest-free in Canada?
- No. As of 2026, only British Columbia has joined the federal government in eliminating interest on provincial student loans. Other provinces continue to charge interest on their portion of student loans, typically at prime rate or prime plus a margin. Ontario charges prime rate; Manitoba charges prime plus 1%; other provincial rates vary.
- What is a Canada Student Grant and does it affect repayment?
- Canada Student Grants are non-repayable portions of student financial assistance under the Canada Student Financial Assistance Act. Low-income full-time students receive up to $4,200 per study year (2025-26). Part-time students receive up to $1,920. Grants reduce the amount that must be borrowed as a loan and therefore reduce the repayment burden directly.
- Can I consolidate provincial and federal student loans in Canada?
- Federal and provincial student loans are managed separately. The NSLSC administers federal loans; provincial agencies administer provincial loans. There is no formal federal consolidation program that combines both. Some provinces allow consolidation of their portion. A private consolidation loan is possible but would convert zero-interest federal debt into interest-bearing private debt, which is generally disadvantageous.
- Is there a student loan forgiveness program in Canada?
- As of 2026, there is no broad federal student loan forgiveness program. Partial forgiveness occurs within the Repayment Assistance Plan after certain milestones. Certain professions and regions may qualify for provincial incentive programs. Bankruptcy does not automatically discharge student loans unless the borrower has been out of school for at least 7 years under the Bankruptcy and Insolvency Act s.178(1)(g).