Student Loan Debt Forgiveness in Canada: How Relief Really Works

Short Answer: Is Student Loan Debt Forgiveness Available in Canada?

Yes, but not in the way most people imagine. In Canada, “student loan debt forgiveness” can happen in three main ways:

• Through specific government student loan forgiveness programs (for certain professions in designated areas).
• Through the Repayment Assistance Plan (RAP), where long-term assistance can eventually lead to some principal being written off.
• Through formal insolvency options — a consumer proposal or bankruptcy — when your student loans are old enough and you meet certain rules.

The Government of Canada outlines student loan forgiveness programs here: Government of Canada – Student Loan Forgiveness.

What Is Student Loan Debt Forgiveness in Canada?

Student loan debt forgiveness means having some or all of your government student loan balance officially written off so you no longer owe it. In Canada, this can occur through:

• Targeted forgiveness programs for certain occupations and locations.
• Long-term use of the Repayment Assistance Plan (RAP), which can eventually reduce or cancel remaining debt for eligible borrowers.
• Being discharged from student loan debt through bankruptcy or a consumer proposal, once specific time limits are met.

It’s important to distinguish between:

• Forgiveness: Debt written off (you no longer owe it).
• Relief / assistance: Lowered or suspended payments, or reduced interest, which may or may not lead to eventual forgiveness.

Government Student Loan Forgiveness Programs

The Government of Canada offers specific student loan forgiveness programs for certain professions working in underserved or rural communities. Examples include:

• Canada Student Loan forgiveness for family doctors, residents, nurses and nurse practitioners who work in eligible rural or remote communities.
• Certain provincial loan forgiveness programs for health and education professionals.

You can read about federal student loan forgiveness here: Student Loan Forgiveness – Canada.ca.

Provincial Examples

Some provinces offer their own programs that forgive a portion of provincial student loans if you meet certain criteria. For example:

• British Columbia has a loan forgiveness program for eligible professionals who work in designated communities. Learn more at StudentAid BC – Loan Forgiveness.
• Other provinces may offer similar programs for specific professions and fields in high demand.

These programs are powerful but targeted. If you’re not in a qualifying profession or location, your route to student loan debt forgiveness in Canada will likely involve repayment assistance or insolvency options instead.

Repayment Assistance Plan (RAP) and Long-Term Relief

The Repayment Assistance Plan (RAP) is a key tool for student loan debt relief in Canada. RAP is not “instant forgiveness,” but it can lead to eventual debt reduction or elimination for eligible borrowers.

Under RAP:

• Your monthly student loan payment is based on your income and family size.
• If your income is low enough, your required payment can be reduced or even reduced to $0 for a period.
• After a certain number of years of qualifying assistance, any remaining student loan principal and interest may be forgiven.

Full details are available here: Repayment Assistance Plan (RAP) – Canada.ca.

When RAP Works Well

RAP may be a good choice if:

• Your income is currently low or unstable, but you expect it to improve.
• You can manage your other debts and expenses with reduced student loan payments.
• You want to avoid insolvency and protect your credit as much as possible.

If your student loans are just one part of a larger debt problem, or if your overall debt level is unmanageable, a consumer proposal or bankruptcy may provide more comprehensive relief.

Student Loans in Bankruptcy or Consumer Proposal

Many people are surprised to learn that student loans can be discharged in a consumer proposal or bankruptcy — but only if they meet specific timing rules under the Bankruptcy and Insolvency Act.

The 7-Year Rule

In most situations, government student loans (federal and provincial) can be eligible for discharge in a bankruptcy or consumer proposal if:

• At least 7 years have passed since you ceased to be a full-time or part-time student.

If this condition is met, your student loans are treated like other unsecured debts in a consumer proposal or personal bankruptcy, and may be partially or fully forgiven when you complete the process.

The 5-Year “Hardship” Rule

In some cases, you may be able to seek earlier relief under a special court application if:

• At least 5 years have passed since you ceased to be a student; and
• You can demonstrate genuine financial hardship and a good-faith attempt to repay.

This route is more complex and typically requires legal advice and court involvement. A Licensed Insolvency Trustee can explain how it works and when it might apply.

For a plain-language explanation of how student loans interact with insolvency, see this external overview: Student Debt Help FAQs – Hoyes Michalos.

For broader context on the insolvency process, read our guides: How to File Bankruptcy in Canada and Bankruptcy Cost in Canada.

Key Eligibility Rules You Must Understand

Before you decide how to pursue student loan debt forgiveness in Canada, it’s crucial to understand these key rules:

• Type of loans: Most of the rules discussed here apply to government student loans (Canada/Provincial). Private student lines of credit are treated like normal bank debt in insolvency.
• School end date matters: The 7-year (and possible 5-year) rule is counted from when you last ceased being a student, not from when the loan was issued.
• Programs are separate: RAP, forgiveness programs, and insolvency are different tools. You may use more than one over time, depending on your situation.
• Provincial variations: Some provinces have their own policies and forgiveness programs that interact with federal loans.

A Licensed Insolvency Trustee can review your transcripts, loan documents, and timelines to determine exactly when your student loans would be dischargeable in a proposal or bankruptcy.

Steps to Seek Student Loan Debt Relief and Forgiveness

Here is a practical roadmap if you’re struggling with student loans in Canada:

1. Gather your loan information. List all government and private student loans, interest rates, monthly payments, and current balances.
2. Confirm your “end of study” date. Note when you were last a full-time or part-time student for each loan.
3. Check government forgiveness programs. If you are a doctor, nurse, teacher, or another professional in an underserved area, review federal and provincial forgiveness programs such as federal forgiveness and BC’s program.
4. Apply for RAP if you qualify. Explore the Repayment Assistance Plan to reduce or pause payments based on income.
5. Look at the big picture. Add in your credit cards, lines of credit, tax debt, and other obligations. Ask whether student loans are your only problem or part of a larger debt situation.
6. Book a free consultation with a LIT. If your student loans are old enough or your overall debt is unmanageable, talk to a Licensed Insolvency Trustee about a consumer proposal in Canada or bankruptcy.
7. Choose a plan and act quickly. The sooner you act, the more options you typically have, and the less interest and stress build up.

What Student Loan Debt Forgiveness Does Not Do

To avoid disappointment, it’s important to have realistic expectations about student loan debt forgiveness in Canada:

• There is no broad, automatic program that simply erases all student loans for everyone.
• Most government programs have strict eligibility criteria based on profession, location, or income.
• RAP can reduce payments to zero, but it may take years before any remaining principal is written off.
• Bankruptcy and consumer proposals only discharge student loans if the timing rules (7-year or 5-year hardship) are met.
• Private student lines of credit from banks are not covered by government forgiveness programs — but they can usually be included in a proposal or bankruptcy like other unsecured debt.

This is why many Canadians end up combining strategies: using government repayment assistance in the early years, and later turning to a consumer proposal or bankruptcy when overall debt becomes unmanageable.