The Government Of Canada Makes Repayment Assistance Plans More Flexible For Canada Student Loan And Canada Apprentice Loan Borrowers
Wednesday, 02 November 2022 04:11.PM
Canada's future prosperity depends on youth getting the education and training they need to find good jobs. The Government of Canada continues to make significant investments to ensure that young people have access to the supports they need to complete their studies and transition successfully to the workforce, and build the careers they want for themselves.
Today, the Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough, announced enhancements to the Canada Student Financial Assistance Program's Repayment Assistance Plan. These enhancements will provide important financial relief to young Canadians as they begin their careers.
As of November 1, 2022, the zero-payment income threshold for Canada Student Loans and Canada Apprentice Loans will increase from $25,000 to $40,000 for a family size of one. Repayment will not be required until borrowers are earning at least $40,000 per year. This amount will be adjusted upward based on family size. Additionally, the cap on monthly affordable payments will be lowered from 20% to 10% of a borrower's household income, ensuring that no borrower has to pay more than they can reasonably afford. These enhancements to the Repayment Assistance Plan are estimated to benefit approximately 180,000 borrowers each year.
These changes align with the Government of Canada's implementation of the 2030 Agenda for Sustainable Development, which was adopted by the United Nations to help build stronger, safer and more inclusive communities that leave no one behind. In particular, the changes support Canada's commitment to inclusive and equitable quality education and lifelong learning opportunities for all, to help achieve Sustainable Development Goal 4: Quality Education.
"Starting today, more graduates can focus on building their careers, instead of worrying about student loans. This is so important. A strong, skilled workforce depends on affordable, accessible education, and this change will ensure more Canadians have more flexibility when paying for school."
– Minister of Employment, Workforce Development and Disability Inclusion, Carla Qualtrough
• To ensure that eligibility for the Repayment Assistance Plan keeps pace with the cost of living, the new zero-payment income threshold will be indexed to inflation annually.
• The governments of Manitoba, Newfoundland and Labrador, Saskatchewan, New Brunswick, and Nova Scotia will also introduce the same enhancements to their Repayment Assistance Plans.
• These changes are part of Budget 2021's historic investment of $5.7 billion over five years to help young Canadians pursue and complete their education, acquire new skills and access more work opportunities.
• Quebec, the Northwest Territories and Nunavut do not participate in the Canada Student Financial Assistance Program. They receive alternative payments from the Government of Canada to administer their own student financial assistance measures.
• Moving Forward Together: Canada's 2030 Agenda National Strategy, released in February 2021, promotes a whole-of-society approach to achieving the Sustainable Development Goals. It builds on the 30 actions and five core principles outlined in Towards Canada's 2030 Agenda National Strategy, with feedback from in-person and online consultations and outreach across Canada.
The Repayment Assistance Plan makes it easier for borrowers who are experiencing financial difficulties to repay the federal portion of their student or apprentice loans. Under the Repayment Assistance Plan, borrowers may qualify for a reduced monthly payment or no monthly payment for up to six months at a time, and no borrower will have a repayment period of more than 15 years (or 10 years for borrowers with disabilities). With the new enhancements to the Repayment Assistance Plan, no borrower has to repay their student loan until they are earning at least $40,000 per year. This amount will be adjusted upward based on family size. Also, the monthly affordable payment is capped at 10% of household income. To ensure that eligibility for repayment assistance keeps pace with the cost of living, the new zero-payment thresholds will be indexed to inflation annually.
Canada Student Loan and Canada Apprentice Loan borrowers may qualify for repayment assistance if:
• they live in Canada, they are a reservist or the spouse of a reservist deployed abroad, or they are on an international internship for a year or less;
•their loan is in repayment; and
• they are up-to-date on their loan payments.
To receive repayment assistance, borrowers must apply online through the National Student Loans Service Centre (NSLSC), or by filling out the Repayment Assistance Plan application form. Borrowers can apply for repayment assistance at any time during repayment. They must re-apply every six months if they require ongoing repayment supports.
SOURCE: Employment and Social Development Canada
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