How Student Loans Work in Canada – Do You Qualify?

Students in Canada who wish to take post-secondary courses have a recourse in terms of financial assistance.

To apply for a government student loan, a student must initially meet certain requirements on citizenship and residence; evidence of a need for financial assistance; course load at a particular period; and ability to share in the cost of the education.

Provincial & Federal Assistance

Whether a student plans to attend a post-secondary school on a full-time or part-time basis, he or she should apply for student financial assistance through his or her province or territory of permanent residence.

Once a student applies for a loan, he or she is assessed for both federal and provincial student loans. He or she is also automatically assessed for a student grant which when awarded, the student need not pay back.

Where the province of residence has a provincial student loan that is integrated with the federal student loan, a single loan may be extended, combining both of these.

There are however, provinces where after evaluation, a student qualifies for both and two separate loans are to be granted.

How government student loans work

The federal government of Canada usually provides sixty percent (60%) of the assessed need, or up to a maximum of $210 in loans per week of study. The forty percent (40%) may be provided in the form of provincial or territorial student loans.

If a student qualifies for a loan, a Letter of Assessment will be sent to him or her, together with a Certificate of Eligibility that will indicate how much loan is to be granted based on financial need and the course that the student is taking.

To continue to be eligible for the loan, the student will have to maintain satisfactory grades as well.

The loan is interest-free while he or she is studying and will only be computed after he or she has graduated. Payment of the loan principal and interest will start only after six months from the student’s graduation from the course.

Aside from government loans, students can also apply for loans from banks or private companies.

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