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🌟 Key 2025 Update: Federal student loans now carry 0% interest. You only repay the principal — no interest charges on Canada Student Loans since April 1, 2023.
How Canadian Student Loans Work
Canadian student financial aid comes from two levels of government: federal (Canada Student Loans & Grants through NSLSC) and provincial (OSAP in Ontario, StudentAid BC, Alberta Student Aid, etc.). Most students receive integrated federal-provincial assistance processed through their province.
Federal: Canada Student Loans (NSLSC)
The National Student Loans Service Centre (NSLSC) administers federal Canada Student Loans and Canada Student Grants. Since April 2023, federal student loans carry 0% interest — you only repay the principal. Federal loans are available to full-time and part-time students at designated post-secondary institutions.
- Interest rate: 0% (no interest on Canada Student Loans)
- Maximum loan: Up to $300/week for full-time students
- Repayment begins 6 months after you leave school
- 10-year standard repayment period
- Access at nslsc.canada.ca
Grants vs. Loans — What's the Difference?
Grants are free money you don't repay. Loans must be repaid. Most provinces combine both in a single application:
- Canada Student Grant (low-income): Up to $4,200/year for full-time students from low-income families
- Canada Student Grant (middle-income): Up to $2,000/year
- Canada Student Grant (part-time): Up to $1,920/year
- Provincial grants: Vary by province — Ontario's OSAP grants can cover full tuition for low-income students
- Loans: Must be repaid after graduation, but federal loans now at 0% interest
Provincial Student Aid by Province (2025)
| Province | Program | Max Annual Aid | Interest Rate |
|---|
| Ontario | OSAP | ~$17,000/yr | Federal: 0% / Provincial: Prime + 1% |
| BC | StudentAid BC | ~$17,000/yr | Federal: 0% / Provincial: 0% (since 2019) |
| Alberta | Alberta Student Aid | ~$16,000/yr | Federal: 0% / Provincial: Prime + 1% |
| Quebec | Aide financière aux études | Varies | Provincial system only |
| Nova Scotia | Nova Scotia Student Assistance | ~$14,000/yr | Federal: 0% / Provincial: Prime + 1% |
| Manitoba | Manitoba Student Aid | ~$13,500/yr | Federal: 0% / Provincial: Prime |
Repayment Assistance Plan (RAP)
Canada's Repayment Assistance Plan (RAP)
If you can't afford your student loan payments after graduation, RAP lets you pay based on your income:
- No payments required if income is below ~$25,000/year
- Payments capped at 20% of gross income
- After 10 years on RAP, remaining federal loan balance is forgiven
- Apply at nslsc.canada.ca — no credit check required
- Provincial loans have separate RAP programs
Best Banking for Students in Canada 2025
#1 Pick: KOHO — Best for Students
KOHO is Canada's top student banking choice because it has $0 monthly fees, no credit check, and 5% cashback on groceries and dining. Use code 45ET55JSYA for a $100 welcome bonus — more than most big banks offer on student accounts. KOHO works perfectly with OSAP and NSLSC direct deposits.
Other student banking options: TD Student Banking ($0 while in school), Scotiabank Student Banking, RBC Student Banking, BMO Student Banking, CIBC Smart Account for Students.
Frequently Asked Questions — Student Loans Canada
Do Canadian student loans charge interest in 2025?
Federal Canada Student Loans charge 0% interest — this was made permanent in the 2023 federal budget. You only repay the principal borrowed. However, provincial portions of student loans (like Ontario's provincial OSAP loan) may still charge interest at Prime + 1% or similar. Check your specific province's current rate.
How do I apply for Canada Student Loans?
Apply through your province's student aid portal — in Ontario it's OSAP (osap.gov.on.ca), in BC it's StudentAid BC. The federal and provincial portions are combined in a single application. You'll need your SIN, income information, school enrollment confirmation, and bank account details for direct deposit. Apply at least 4 weeks before school starts.
How much student loan can I get in Canada?
Most full-time students can receive between $8,000–$17,000/year in combined federal and provincial student aid. The amount depends on your family income, school costs, and province. Low-income students may receive a larger grant portion (which doesn't need to be repaid). Use your province's student aid estimator for a personalized estimate.
When do I start repaying my Canadian student loans?
Repayment on federal Canada Student Loans begins 6 months after you graduate or leave school. This 6-month grace period is non-repayment — no interest accrues (since federal loans are now 0% interest). Provincial loan grace periods vary. You can start repaying early to reduce your principal faster.
What happens if I can't repay my student loan in Canada?
Apply for the Repayment Assistance Plan (RAP) through NSLSC. RAP reduces or eliminates payments based on your income. If income is under ~$25,000, no payment is required. After 10 years on RAP, the remaining federal loan balance may be forgiven. Contact NSLSC before defaulting — they have multiple options to help borrowers in difficulty.
What is the best bank account for a student with OSAP in Ontario?
KOHO is the best option for OSAP recipients — $0 fees, 5% cashback promo, and a $100 bonus with code 45ET55JSYA. OSAP payments can be deposited directly to KOHO. TD, Scotiabank, RBC, BMO, and CIBC all offer fee-free student chequing accounts while you're enrolled. After graduation, keep using KOHO to avoid monthly fees while managing loan repayments.
Disclaimer: Student loan amounts and interest rates are subject to change. Verify current rates and eligibility at nslsc.canada.ca and your provincial student aid portal. This page is for informational purposes only and does not constitute financial advice.