Canada Student Loans – Everything You Need to Know

If you’re a Canadian student or a recent grad, you’ve probably heard the term “student loan” tossed around a lot. It can feel overwhelming, but the basics are simple. A Canada student loan is money the government (or a private lender) gives you to cover tuition, books, and living costs. You pay it back after you graduate, usually when you start earning.

Most Canadians start repaying their loans once they earn at least $20,200 a year. The government sets the interest rate each July, and you can choose a repayment schedule that matches your cash flow. The key is to understand your options early, so you don’t end up in a panic when the first payment notice arrives.

What Happens If You Skip Payments?

Missing a payment doesn’t instantly ruin your life, but it does set off a chain of events. First, your loan goes into “delinquent” status after 30 days. After 90 days, the government can start collecting through wage garnishment, tax refund offsets, or even legal action. Your credit score takes a hit, which can affect future borrowing, like a mortgage or car loan.

Our article "What Happens If You Never Pay Off Student Loans? Consequences, Timelines, and Fixes (2025)" breaks down each step in clear language. It also lists practical ways to avoid default, such as applying for repayment assistance, requesting a deferral, or consolidating debt. Ignoring the problem only makes it harder to fix later.

How to Manage & Repay Your Canada Student Loans

The best strategy is to stay proactive. First, set up automatic payments; this removes the chance of forgetting a due date. Second, keep an eye on the Canada Student Loans Repayment Assistance Program (RAP). If your income drops or you face unexpected expenses, RAP can lower your monthly payment or even pause it.

For borrowers with bad credit, the post "How to Get a Loan When No One Approves You: Real Solutions for Bad Credit" explains alternative lenders that still consider your student loan history. While private loans often have higher rates, they can be a bridge if you need cash before RAP kicks in.

Another useful tip is to make extra payments whenever you can. Even a $20 extra each month shaves years off the term and saves you interest. Because Canada student loans use a simple interest formula, every dollar you pay early reduces the balance that future interest is calculated on.

If you’re unsure about your payment amount, use the online loan calculator on the government site. Plug in your loan balance, interest rate, and desired monthly payment, and you’ll see a clear amortization schedule. It helps you visualize how quickly you’ll be debt‑free.

Finally, keep all correspondence in one place. Emails, statements, and RAP approvals are easy to lose, and missing a document can delay a payment or assistance request. Creating a dedicated “student loan” folder—digital or paper—keeps everything organized.

Whether you’re just starting your repayment journey or already juggling multiple debts, understanding the mechanics of Canada student loans puts you in control. Use the resources on this page, read the linked guides for deeper dives, and remember: staying informed beats panic every time.