Graduating is exciting, but for many Ontario students, it also brings the reality of student loan repayment into focus. If you borrowed through OSAP, you now have a federal loan (through the Canada Student Loans Program) and a provincial loan (through the Ontario government). These two portions are managed slightly differently.
This guide walks you through exactly what happens when OSAP repayment begins — the timeline, the amounts, the options if you can't afford payments, and how to handle your loans strategically so they don't derail your financial start.
You have a 6-month grace period after you leave school before OSAP repayment begins. This applies whether you graduated, withdrew, or reduced your course load below the eligible threshold. The 6-month clock starts from the date you leave full-time studies, not from your convocation ceremony.
During this 6-month period, no interest accrues on the federal portion of your OSAP loans. For the Ontario provincial portion, Ontario also provides an interest-free grace period during these 6 months.
At the end of the 6 months, both portions enter repayment automatically. If you go back to school full-time, repayment pauses again — but you need to notify the National Student Loans Service Centre (NSLSC) and submit a new confirmation of enrollment.
After graduation, your OSAP loans are split between two servicers:
For most OSAP borrowers who graduated after 2017, both portions are managed in the same NSLSC portal, making repayment fairly streamlined.
By default, you're placed on a 10-year (120-month) repayment plan. Your monthly payment is calculated by dividing your total outstanding balance across 120 equal payments.
For example, if you graduate with $25,000 in total OSAP debt:
These are approximate figures. Your actual payment depends on your specific balance split between federal and provincial.
If you can't afford your standard monthly payments, the Repayment Assistance Plan (RAP) is the single most important tool available to you. RAP caps your monthly payment based on your income — never more than 20% of your gross income, and often much less.
Under RAP, if your income is below approximately $25,000 annually (for a single person), your required monthly payment may be $0. You won't be in default, your credit won't be harmed, and your loan balance won't grow because federal loans are interest-free.
You can apply for RAP at any point during repayment — you don't need to wait until you miss a payment. If you know your income won't support standard payments, apply immediately when repayment begins.
RAP has two phases:
After a maximum of 15 years of repayment (or 10 years of RAP), any remaining federal student loan balance is forgiven.
Unlike the federal portion, Ontario's provincial student loans still charge interest during repayment. The interest rate for Ontario provincial student loans is either prime + 1% (floating rate) or a fixed rate, depending on your election at the start of repayment.
Over a 10-year repayment on a $100 provincial balance at a rate of roughly 6–7%, you could pay $3,000–$4,000 in interest on just the provincial portion. This makes it worth considering paying down the provincial balance faster if you have the means to do so.
You are not locked into the standard 10-year plan. You can:
Because federal loans are now interest-free, there is no financial penalty to taking longer to repay the federal portion. However, paying off the Ontario provincial portion faster does save you interest money.
Missing payments has serious consequences:
If you're struggling, always contact the NSLSC before missing payments. They have hardship provisions and RAP is far better than default.
If you go back to school full-time after graduation, your OSAP loans re-enter non-repayment status. You don't need to make payments while you're studying full-time again. You do need to submit a new confirmation of enrollment to the NSLSC to activate this deferral.
You can claim a federal tax credit for interest paid on student loans. Since federal loans are now interest-free, this credit mainly applies to interest paid on your Ontario provincial portion. The credit is 15% of the interest you paid during the year — not a deduction but a direct reduction in taxes owed.
Keep your year-end loan statements from the NSLSC each February, as they show how much interest you paid during the year for tax purposes.
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Open KOHO Free — No Fees — Code 45ET55JSYAThe best time to think about OSAP repayment is before you're in it. In your final year, review your total OSAP balance in the NSLSC portal. Calculate what your monthly payment will be on the standard plan. Compare that to your expected starting salary in your field.
If your expected payments are manageable — great. If they look like they'll strain your budget, plan to apply for RAP as soon as repayment starts. There's no shame in using RAP; it's exactly what the program is designed for.
Many graduates find that starting with RAP for the first year or two after school, then moving to standard payments as their income grows, is a comfortable approach to balancing loan repayment with the other costs of early career life.