Most people have been concerned about bills and debt in the last year as the pandemic has rocked the economy. The Canadian government has been providing all sorts of programs to help Canadians from rent subsidies to Canadian Emergency Response Benefits (CERB) there have been many options for those facing difficulties. But one great program has been around for a long time, and that’s Canada’s Repayment Assistance Plan (RAP).
How to RAP
If you are running into problems paying your federal or provincial Canadian government student loans you can apply to have the government of Canada help you. It works based on your income. The great thing is that you are not required to make any payments that exceed 20% of your income, so you may not have to make any payments at all for the period of your RAP. But to be clear, it doesn’t get rid of your student loan, just postpones the payments for a time.
You can apply for RAP as soon as you are required to start making payments. Once you have applied, your student loan payments will be paused until a decision is made on your application. If your application is approved your required payment will be reduced and the government will pay the interest owing that your revised payment doesn’t cover. Each RAP period is six months and at the end of the six months you can apply again as needed.
How to know if you qualify
It’s simple to figure out if you qualify. To be eligible:
- You must reside in Canada (or be on an international internship or a reservist deployed abroad)
- At least six months must have passed since you graduated or left school (your loans are in repayment)
- You must be up-to-date on your loan payments
- You must meet the income threshold
If your family income falls below a certain level per month you may qualify to make no payments for the six-month period. Otherwise, you may qualify for reduced monthly payments.
Monthly Gross Family Income Thresholds for Zero Payment under RAP by Family Size
| Family Size | Income Threshold |
|---|---|
| 1 | $2,083 |
| 2 | $3,254 |
| 3 | $4,205 |
| 4 | $4,959 |
| 5+ | $5,652 |
How to apply for RAP
Applications for RAP are submitted through the government’s National Student Loans Service Centre (NSLSC) Online Services account. If you don’t have an account already you can easily register for one here. All payments and issues with your government student loan are managed through this account.
Going back to school
However, the RAP program is not your best choice if you’re planning to go back to school. If you have government student loans you have a six-month period before you have to start making payments. This period starts when:
- You finish your final term
- Go from full-time to part-time studies
- Leave or take time off school (there is a program if the issue is due to medical or parental issues)
Once the government has contributed to the payments on the principal of your student loan, you can’t get any further government student loans until your existing loans are fully paid off. If you are continuing your education but not getting additional loans you need to let the National Student Loans Service Centre know.
The Repayment Assistance Plan program is a great help for people struggling with their Canadian government student loans. Another option is HigherEdPoints which allows you to turn your credit card points into money for student loans! Students, grads, parents, grandparents and friends can all use their credit card points to help others get on top of their student loans at this challenging time.
For more information on RAP please see the government website at https://www.canada.ca/en/services/benefits/education/student-aid/grants-loans/repay/assistance/rap.html