Canada Student Loan Interest and Repayment While You're Living Abroad

Federal interest is permanently gone since April 2023

The Government of Canada permanently eliminated interest on the federal portion of Canada Student Loans and Canada Apprentice Loans starting April 1, 2023, as confirmed by Employment and Social Development Canada . This applies to every borrower, including those living outside Canada. You still owe any interest that built up before April 1, 2023, but nothing new accrues on the federal balance after that date, regardless of your country of residence.

This does not touch your principal. You still owe back what you borrowed. The change only removes the interest charge on the federal share of the loan.

Staying payment-free while you study abroad

If you are still enrolled full-time at a Canadian institution and go on an exchange or study-abroad term, your loan status does not change automatically. You need to confirm your enrolment with the National Student Loans Service Centre (NSLSC) through your online account, or submit a paper Confirmation of Enrolment if your school cannot confirm electronically. Without this step, NSLSC may treat you as having left school and start your non-repayment clock even though you are still a full-time student.

Log in to your NSLSC account before you leave and update your mailing address to your temporary address abroad, along with an email address you check regularly. NSLSC communicates mostly online, and a missed notice does not pause your repayment obligations.

What happens once you stop being a full-time student

Once you graduate or drop below full-time status, you enter a 6-month non-repayment period before your first payment is due. Since federal interest is eliminated, nothing accrues on the federal portion during this window either. After the 6 months, NSLSC sets your fixed monthly payment based on your total balance and the standard repayment term, and this obligation applies whether you live in Toronto, Berlin, or Tokyo. Moving abroad does not pause or cancel your loan.

Repayment Assistance Plan and living outside Canada

The Repayment Assistance Plan (RAP) reduces your monthly payment based on income when you cannot afford the standard amount. Under the official eligibility rules , RAP generally requires that you live in Canada. The main exceptions are reservists (or their spouses) deployed abroad and borrowers on an international internship of one year or less. If you move abroad for work or further study outside these exceptions, plan around the standard fixed payment schedule instead of counting on RAP to lower it.

Your provincial loan portion works differently

Education and student aid are provincial responsibilities, and interest rules on the provincial share of your loan depend on where you studied. Some provinces have made their own changes to provincial student loan interest, so contact your provincial student aid office (for example your OSAP, StudentAid BC, or Alberta Student Aid account) to confirm how the provincial portion of your balance is being charged while you are abroad. Do not assume the federal interest elimination automatically covers your provincial loan.

Why this change matters for students planning to go abroad

Alongside the interest elimination, Budget 2023 raised the weekly limit on interest-free federal loan borrowing for full-time study from 210 CAD to 300 CAD per week, and increased Canada Student Grants by 40 percent starting with the school year that began August 1, 2023, per Employment and Social Development Canada . If you are planning a year abroad and financing part of it with a Canada Student Loan, these figures affect how much you can borrow before you leave and how much of that borrowing comes as a grant you never repay. Confirm the current academic year's grant and loan limits with your provincial student aid office when you apply, since the exact dollar figures move from year to year.

If a payment is going to be late

Contact NSLSC before a payment due date passes, not after. Being upfront about a delay, whether from a slow international transfer or a banking mismatch after a move, gives NSLSC the chance to work with you on timing. A missed payment with no communication is far more damaging to your credit file than a payment that arrives a few days late with advance notice.

Practical steps before you leave Canada

• Confirm your enrolment with NSLSC if you are still a full-time student studying abroad on exchange.

• Update your address and contact details in your NSLSC account to your temporary or new address.

• Set up pre-authorized debit or online bill payment before you leave so payments do not lapse once your non-repayment period ends.

• Contact your provincial student aid office separately about the provincial portion of your loan.

• Check RAP eligibility before assuming it will lower your payment abroad.

• Confirm current grant and loan limits for the academic year you are borrowing against before you finalize your abroad budget.

• Keep a record of every enrolment confirmation and NSLSC communication in case a dispute comes up later.