Student debt is a reality for most Canadian post-secondary graduates. The average university graduate leaves school with roughly $28,000 in student loans. For professional programs like law, dentistry, and medicine, that number can reach $100,000–$200,000.
But student debt in 2025 is meaningfully different from what it was a decade ago. Federal loans are now interest-free. The Repayment Assistance Plan provides a genuine safety net. And with clear repayment strategies, most graduates can eliminate their student debt in 5–10 years while still building their financial lives.
The first step in managing student debt is understanding exactly what you owe. Most graduates have at least two loan accounts:
Log in to your NSLSC account and note: the total outstanding balance of each loan, the interest rate on each, and what your standard monthly payment will be.
A common guideline is that your annual student loan payment should not exceed 10–15% of your gross income. If you earn $50,000 per year, a manageable annual payment is $5,000–$7,500, or roughly $415–$625/month.
Use this as a starting benchmark. If your standard 10-year payment falls within this range, you are likely fine on the standard plan. If it exceeds this, consider RAP or an extended repayment schedule.
The default. You pay equal monthly installments over 10 years and your loans are done. This is the right strategy if your payments are comfortably within your budget and you have no high-interest other debt to prioritize first.
Because federal loans are interest-free, there is no financial benefit to paying off the federal portion faster than the 10-year schedule (unless you simply want the psychological benefit of being debt-free sooner). However, paying down provincial loans faster does save interest money.
Making lump-sum payments on your provincial loans whenever you have extra money — tax refunds, bonuses, side income — reduces your principal and therefore the total interest you pay.
Direct extra payments specifically to your provincial loan (the one with interest) rather than your federal loan (which is interest-free). This is the mathematically optimal approach.
RAP is for graduates whose income does not comfortably support standard payments. Under RAP, your monthly payment is capped based on income — potentially $0/month if your income is below a threshold.
RAP is not failure — it is a design feature. The program exists precisely because society recognizes that income growth takes time after graduation. Using RAP for the first 1–3 years while your career develops is entirely rational.
Apply through nslsc.canada.ca. Reapply every 6 months. You can exit RAP at any time and return to standard payments when your income grows.
If you have multiple loan types — federal (interest-free), provincial (with interest), and perhaps a student line of credit or credit card balance — prioritize repaying the highest-interest debt first while making minimum payments on the others.
Typical priority order:
Student debt anxiety is real and common. Seeing a $28,000 or $50,000 number in your NSLSC account after graduation can feel overwhelming. Some practical perspectives:
Student loans appear on your credit report. Making every payment on time builds your credit history — a positive effect. Missing payments damages it. As long as you are making payments (or are on approved RAP), student loans are a positive credit-building tool.
After you pay off your student loans, the positive account history remains on your credit report for years, continuing to benefit your score.
Many graduates wonder how student debt affects their ability to buy a home, get a car loan, or pursue other financial goals. The reality:
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Open KOHO Free — No Fees — Code 45ET55JSYAIf you are struggling with student debt, resources available include:
Repaying student debt and building wealth are not mutually exclusive. Even small parallel actions help:
A balanced approach — steady loan repayment plus modest savings — typically produces better long-term outcomes than going all-in on debt repayment at the expense of any savings or financial security.