Ontario Student Loans-OSAP Repayment Assistance

Ontario Student Loans-OSAP Repayment Assistance

Navigating the realm of student loans can be complex and overwhelming. This comprehensive guide will help you understand the Ontario Student Assistance Program (OSAP) and its repayment assistance options. If you’re dealing with student debt, this post is a must-read!

Understanding Ontario Student Loans and Student Debt

In Canada, acquiring a post-secondary education often involves a significant financial investment. With the average cost of an undergraduate degree standing at approximately CA$6,463 per year, many students rely on student loans to fund their studies. These loans, provided by private lenders or government assistance, are designed to support students in their educational pursuits. However, they can also lead to substantial debt post-graduation.

The average student debt at graduation is around $28,000, with most students taking up to 10 years to repay their loans. This debt can impede graduates from reaching major life milestones like starting a family or buying a house, and can sometimes lead to insolvency.

Consequences of Non-Repayment

The implications of not paying your student loans can be severe. For federal or provincial loans like the OSAP, if payments are not made for 270 days, the loan automatically defaults and is sent to the Canada Revenue Agency for collection. This can lead to serious repercussions such as wage garnishment, tax refund withholding, and freezing of bank accounts.

Private student loans, like credit cards or lines of credit, are treated as unsecured debts. If defaulted, they are referred to a collection agency, and you may start receiving collection calls and letters.

Government Aid for Student Debt

Fortunately, the government offers several debt relief options for struggling students.

OSAP Repayment Assistance Plan (RAP)

The RAP program is designed for individuals who are having trouble making their minimum payments. If you earn below a certain threshold, you may qualify for interest relief and principal reduction.

Revision of Terms

Under the Revision of Terms plan, you can extend your loan repayment period to make more manageable monthly payments. However, this may result in higher interest payments in the long run.

Ontario Student Loan Forgiveness Programs

The government also offers loan forgiveness programs for specific professions.

Canada Student Loan Forgiveness for Doctors and Nurses

Doctors and nurses working in remote or rural areas may qualify for loan forgiveness. Family doctors or residents in family medicine can get up to $40,000 in loan forgiveness over five years. Nurses or nurse practitioners can receive up to $20,000 over the same period.

Other Potential Options

Filing a Consumer Proposal

If you have been out of school for seven years or longer, filing a consumer proposal may be an option. This allows you to combine your Ontario student loans with other unsecured debts into one monthly repayment plan, which you can pay off over 3-5 years.

Filing for Bankruptcy

In the same vein as a consumer proposal, outstanding student loans can be discharged through bankruptcy if you have been out of school for more than seven years. However, this option should be considered as a last resort.

Seeking Help for Student Debt in Canada

If you’re struggling with student debt, don’t hesitate to seek help. Contacting a licensed insolvency trustee can provide you with valuable advice on your options for student debt relief.


While Ontario student loans are designed to assist students, they can also lead to significant debt. However, with effective management and utilization of available resources like the Ontario Student Loans-OSAP Repayment Assistance, you can navigate your way through this financial challenge. Remember, help is always available – you just need to reach out and take it.

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