Which student loan forgiveness programs are available in Canada?
In Canada, there are several repayment programs available for students with federal student loans.
These programs are called “direct loans” or “debt forgiveness”.
Direct loans can be forgiven through either the Canadian Student Loan Corporation (CSLC) or the Guaranteed Payments Program (GPP).
In the GPP, borrowers are eligible to receive a direct payment from their Canadian parent or guardian.
Direct payments are generally lower than direct loans.
Direct loans for students enrolled in a Bachelor of Arts or higher education can be used as long as they have the equivalent of four years of post-secondary education, have not earned more than $50,000, and have a loan balance of no more than five per cent of their discretionary income.
Students can apply for direct loans with the Student Loan Guarantee Corporation.
Direct Loans for Students with Direct Loans The Guaranteed Payment Program is a provincial program that provides direct payments to students who have outstanding student loans from a federal government program.
Students in this program are entitled to a maximum payment of $15,000 in monthly instalments.
Direct loan payments are not eligible for direct loan forgiveness under the Guarantee Payments Program.
Students enrolled in the Bachelor of Science or higher degree program at the University of Toronto (UT) may be eligible for Direct Loan forgiveness through the Guaranted Payments Program if their student loan debt is under the maximum monthly amount.
Students are not required to repay their loans.
If students receive a Direct Loan payment, they are entitled, for up to three years, to repay the loan in full in a single payment.
Direct Loan payments may also be used to purchase private education.
Students who have a total outstanding student loan balance (excluding Direct Loan repayments) can apply to the Guarantied Payments Program for a Direct Payment.
Students must apply online and submit a Request for Payment form to receive Direct Loan Direct Payments.
Students also must be enrolled in an approved bachelor’s or higher undergraduate program at an approved Canadian post-high school.
Students whose parents or guardians have a minimum income of $150,000 (including the federal poverty line of $22,700) can qualify for Direct Loans Direct Payments from the Guarantees Program.
The Direct Loan Program is available to students with Federal Direct Loans, Provincial Direct Loans and Ontario Direct Loans.
Students with Federal, Provincial or Ontario Direct loans may apply for Direct loan forgiveness through their federal or provincial student loans, provincial government student loans or Ontario government student loan.
Students without a Federal, provincial or Ontario student loan may apply to a guarantor to receive the Direct Loan Payments.
Direct Payment for Students With Direct Loans Students can also receive Direct Payment from their provincial or territorial government student aid, provincial social assistance or student aid administered by the federal government.
Direct Payments for Students Who Have Direct Loans (GUIDs) Direct Payments are made by the Guarantor for Students to whom a Direct Loans payment has been made, and the Guarantyee Payments Corporation for the Guarantant.
Direct payment is made directly to the guarantor and is not transferred to the student.
A Guarantyance Payments Corporation (GPC) representative will make direct payments of Direct Loans to eligible students who are enrolled in their Guarantee Programs.
Direct Direct Payments may also have their repayment schedules changed to reduce or eliminate the interest.
For example, a Direct Payment may have its payment schedule reduced to one month from the regular payment schedule.
The Guarantee Payment Program provides the Guarantys payment for students who were previously enrolled in federal or federal-provincial student loans to be used towards their Direct Loan repayment.
Students receiving Direct Loans direct payments are entitled only to a Direct Payments payment.
Students may not be eligible to apply for forgiveness of Direct Loan or Guarantee Program Direct Loans if their loans have been cancelled or restructured.
For more information about Direct Loans in Canada, visit Canada Student Loans.
Direct-Loan Direct Payment Programs Direct Loan and Guarantee Direct Payments can also be made by banks and financial institutions.
These direct payments can be made directly into a student’s bank account or through a financial institution to an individual who is eligible for an income-related benefit, such as a health-care benefit or disability-related payment.
Financial institutions that are not banks may offer Direct Loans through a “gift” program.
Gifts are often used by individuals to pay for educational expenses.
Direct Bank Direct Loan Gift Programs For borrowers who are eligible for a federal, provincial, or territorial Guaranteed Payable Direct Payment, the Direct Bank Guarantee payment may be made into a bank account, by transferring money to the account of the eligible borrower and paying to the Direct Payments account of that eligible borrower.
Direct bank Direct Loan Gifts are typically made into an account or into a personal cheque to an eligible borrower’s account.
This account or cheque can then be used by the borrower to make a direct Direct Loan Payment to the eligible student.
If a Direct Bank Gift is made into the account or the account is held by the eligible individual, the payment is automatically made to the beneficiary