Simple Ways to Manage Your Canada Student Loan

  • By Jillian Taylor-Mancusi


Paying back money you borrowed to finance your education may seem like a huge task. Large balances can be intimidating, but there are several simple ways to manage your Canada student loan debt and enjoy life as a college graduate.

Get an Early Start

You are not required to begin repayment until you graduate. However, making payments before you graduate is a great way to save on interest charges and reduce your principal loan balance. After graduation, any payment you make first applies to interest charges that have accrued. The remainder is then credited to your principal balance.

Interest charges eat up a large percentage of your monthly payment, especially in the first five or ten years. However, payments you make before you are required to begin repayment all go to principal. Even small payments can add up to big savings later. Cash gifts or a percentage of a part time job paycheck are all good sources of these extra payments.

Bump up Your Monthly Payment

The amount you are required to pay each month is your minimum monthly payment. Student loans are usually low interest loans, but large balances and longer terms make the interest charges climb. If you can afford to make a larger payment, you can save a lot of money. For example, adding just $50 each month to your minimum payment will save you almost $1600 on a $25,000, 5.5% interest loan.

Take Advantage of Tax Credits

File for a yearly tax credit once you begin repaying your student loans. The government will refund 15% of your interest charges annually on both federal and provincial student loans. There is no tax credit for privately funded loans.

Students may also receive tax credits while attending school. Full-time students get a credit of $400 for each month they attend school. Part time students receive a credit of $120 for each month attended. There is also a $65 per month textbook credit. Check out for useful links and more information.

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Help for Hard Times

If you are having a hard time making payments, government programs can help you manage your Canada student loan. Your first step should be to contact your loan originator and tell them you are having problems. It’s best to speak with them before you miss a payment, but help is available even if you’ve already missed a payment.

Contact the National Student Loans Centre if your loan is from the federal government. If you have a provincial or territorial loan, contact the student financial aid office. Many loans qualify for many assistance programs that include reducing your monthly payment or putting them on hold. If you are permanently disabled, your loan may be forgiven altogether. For contact information and more details, visit

Don’t let yourself be burdened with hefty student loans as a college graduate. You can manage your Canada student loan with a bit of planning and good money management skills. Handling your repayment wisely will help you earn a good credit score and help you pay off your loan quickly.

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