Student Loans

Borrowers who participate in a bankruptcy-related event:

  • Are eligible for interest-free status on full-time student loans while in-study
  • Have access to new student loans for a maximum of three years, provided that the borrower remains in the same program of study and does not drop below full-time status; and
  • Are able to access debt management measures, including: Interest Relief and Debt Reduction in Repayment

Debt management measures

Repayment Assistance Plan (RAP)

Effective November 1, 2010, the Repayment Assistance Plan (RAP) replaced the IR and DRR repayment measures; although, borrowers approved under those programs will continue to utilize those measures until the applicable end periods. The RAP is a two-stage repayment program available to assist borrowers in repaying their loans over a maximum 15 years and is based on the borrower’s gross family income, family size and payment to Student Loans.

Stage I consists of the first five years in which loan payments not exceeding 20% of family gross income are applied to the principal amount of the loan while the Government covers the interest portion.

If repayment difficulties persist beyond five years, stage II sees the Government continue to cover the interest portion and, eventually, a portion or all of the principal amount along with the borrower’s loan payments, which will continue to be based on gross family income level, family size and payment to Student Loans.

New loans and interest-free status

Borrowers who participate in a bankruptcy-related event while in full-time study may apply for new Canada Student Loans for a maximum of three additional years. In addition, borrowers will be eligible for interest-free status on all existing Canada Student Loans. In order to remain eligible for new loans and/or interest-free status, these borrowers must remain in the same program of study on a full-time basis.

Student loans and bankruptcy

Student loans will be discharged in a bankruptcy as long as it has been seven years since you last attended school at the time you make a bankruptcy filing. The same seven year cut-off applies for proposals.

For additional information regarding Student Loan issues contact:

National Student Loans Service Centre

Public Institutions Division: 1.888.815.4514

Private Institutions Division: 1.866.587.7452