Student Loan Debt – Repayment Assistance Options

A bachelor’s degree is the new High School Diploma.  You need one for most entry level jobs.  However, as tuition increases, the pay for those entry level jobs fails to keep up, and more and more people find themselves with thousands of dollars of student loan debt.

Average graduating debt per province:

  1. B.C. – $34,886
  2. Atlantic provinces – $30,725
  3. Ontario – $29,520
  4. Manitoba/Saskatchewan – $28,296
  5. Alberta – $27,334
  6. Quebec – $13,180

BC in particular is in crisis.  BC students come in well above the national average of $27,000 and student loan debt in BC has the highest interest rates on student loans of any province in Canada– 2.5% above prime.  In comparison NF abolished interest on student loans in 2008. Student debt is reaching a crisis level and many people cannot afford the payments that begin only 6 months after they have graduated.

Repayment Assistance Plan

If you are in a situation where your student loan debt is crippling and you cannot afford to make the payments the Federal government has a program in place called the Repayment Assistance Plan, which could help.

The goal of the plan is to reduce your monthly payments to a manageable level, and in some cases abolish them altogether.  Your manageable payment will be calculated using your family income and family size, and your payment cannot exceed 20% of your family income.  If you are eligible for the plan you repayment term for your student loan debt maxes out at 15 years.  You must reapply every 6 months, but for those that qualify it can be a huge help.

The Plan works in two stages;

Stage one:

The first 60 months of your enrollment in the RAP, within the 10 year period after you leave school

The Government pays the interest that is not covered by your affordable payment

Stage 2:

After you have been paying off your loan for 10 years, or have completed 60 months of stage 1 (whichever comes first).

The Government continues to pay your interest and begins to pay part of the principal, reducing your debt so that you will be student loan debt free 15 years after you began paying your loan back.

Eligibility and Application

To see whether you are likely to qualify for the Repayment Assistance plan visit the link below and input your information into the Estimator

If you are eligible you can apply online through the National Student Loans Service Centre, or you can download a paper application and fax it in.


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