Canada runs one of the more forgiving student loan systems anywhere: the federal portion of your loan carries no interest at all, grants do not need to be repaid, and if your income after graduation stays low, a formal program reduces your payment — sometimes to zero. The catch is that the system is split between Ottawa and your province, and the details live in that split. Here is how it actually works for the 2025–2026 cycle.
One application, two loans
You never apply to the federal government directly. Your provincial student aid office — OSAP in Ontario, StudentAid BC in British Columbia, Alberta Student Aid in Alberta — takes a single application and assesses you for both the federal and the provincial portion at once. The federal side is interest-free; the provincial side varies, and that difference matters when you plan repayment:
| Province | How to apply | Provincial loan interest |
|---|---|---|
| Ontario (OSAP) | Single OSAP application; first-time applicants for 2025–2026 must complete a short interactive module (~15 minutes) before the form opens | Prime + 1% |
| British Columbia (StudentAid BC) | Single application via a student account with digital ID (BC Services Card) | Prime |
| Alberta (Alberta Student Aid) | One application, both portions assessed automatically | Prime + 1%; no interest during the 6-month grace period |
Grants: money you keep
Before loans, the system hands out grants. Full-time students can receive up to $4,200 per year through the Canada Student Grant, scaled to financial need and family income. On top of that sit targeted grants — for students with dependants, for students with permanent disabilities (including a separate grant for equipment and services), and for part-time students. Grants are assessed from the same single application; there is no separate paperwork.
Part-time students qualify too
If you carry between 20% and 59% of a full course load, you can borrow up to $140 per week federally and claim the part-time version of the Canada Student Grant. Provinces add their own layers — British Columbia, for example, runs a B.C. Access Grant for part-time students worth up to $1,000 a year for lower-income households.
Update — September 2026
For spring graduates the six-month grace period ends around now: repayment begins the first day of the seventh month after leaving school. Before the first payment is drawn, check whether your income qualifies for the Repayment Assistance Plan — below the thresholds in the table above, the required payment is $0 and interest on the federal share stays covered.
After graduation: the six-month cushion and RAP
Repayment starts on the first day of the seventh month after you leave school. During those six months no payments are due, and the federal portion stays interest-free — permanently, in fact. Provincial loans differ: some provinces mirror the interest-free grace, others start charging right away, so check your provincial statement rather than assuming.
If money is tight after that, the Repayment Assistance Plan is the mechanism to know. You apply — and must re-apply every six months — and your payment is capped at no more than 20% of gross family income. Below these monthly income thresholds, your required payment is zero:
| Family size | Monthly income threshold ($0 payment) |
|---|---|
| 1 | $3,788 |
| 2 | $4,444 |
| 3 | $5,444 |
| 4 | $6,283 |
| 5 | $7,026 |
| 6 | $7,696 |
| 7+ | $8,313 |
RAP has two stages. For the first 60 months, the government covers the interest your reduced payment does not. After 60 months in the plan — or ten years after graduation — it starts paying down principal as well. The hard backstop: no one repays for more than 15 years (10 years for borrowers with a permanent disability); whatever remains after that is written off.
Applying, step by step
Start at your province's portal, not canada.ca. Create the student account (BC requires a digital ID; Ontario first-timers complete the information module), have your SIN and program details ready, upload supporting documents, and submit well before your program starts — assessments queue up in late summer. Money arrives split between the school (tuition first) and your bank account.
When a student loan is not the right tool
Student aid covers tuition and living costs while enrolled — it is not designed for consolidating other debts or bridging gaps after graduation. For those situations, compare a regular personal loan in Canada or, if your credit file is thin after years of studying, a credit builder loan to establish history before bigger borrowing. And if you graduated with several debts at once, our guide to debt consolidation loans covers when merging them actually saves money.
Set the payment date just after payday, not before it — NSF fees on student loan payments are avoidable money lost.