Repayment Assistance Plan Versus Provincial Loan Forgiveness: How the Two Programs Interact

Two tools solving two different problems

The Repayment Assistance Plan and a provincial loan forgiveness program both help graduates struggling with student debt, but they work on different parts of the problem. RAP adjusts what you are required to pay each period based on your income. Provincial forgiveness programs erase part of your loan principal outright, usually as a one-time reduction tied to finishing your program. Confusing the two leads some graduates to assume one covers what only the other actually does.

What the Repayment Assistance Plan does

The Repayment Assistance Plan compares an affordable payment, calculated from your gross family income, your family size and your total loan balance, against your standard required payment. If the affordable figure is lower, RAP caps your payment at that lower number for a six-month period, and you reapply every six months to keep the reduction going. If your affordable payment works out to zero, you make no payment at all for that period.

Stage 1: Interest Relief

For up to 60 months after your period-of-study end date, or until 10 years after that date, whichever comes first, RAP's Stage 1 (Interest Relief) covers the gap between your affordable payment and what you actually owe, keeping your required payment at or below what your income supports. This 60-month or 10-year clock runs from your study end date, not from when repayment itself began, since repayment normally starts six months after study end. Since the federal portion of your Canada Student Loan carries no interest since April 1, 2023, a zero-payment period on RAP holds your federal balance steady rather than letting it grow.

Stage 2: Debt Reduction

Once you reach that 60-month or 10-year point, your file moves into Stage 2 (Debt Reduction), which can reduce principal even if your income stays low, provided you keep reapplying and qualifying every six months. Total repayment obligations under RAP cannot extend past 15 years after your study end date, after which any remaining balance is written off. This gives a borrower who still cannot reach a standard payment a path toward zero balance over time rather than staying capped indefinitely with no progress.

What a provincial forgiveness program does

Nova Scotia runs one of the clearest examples of a provincial forgiveness program. Finish an undergraduate, non-professional degree at a Nova Scotia university and the Nova Scotia Student Loan Forgiveness Program forgives part of your Nova Scotia Student Loan automatically, no application needed, covering up to five years of study and up to $20,400 total, for loans issued on or after August 1, 2015. It has to be your first undergraduate degree, and you need to finish within eight years of starting. Student Assistance reviews your file once your school confirms graduation and sends a letter naming your forgiveness amount within three to six weeks. This forgiveness touches only your Nova Scotia loan, not your federal Canada Student Loan.

The key differences at a glance

Using both together

Nothing about qualifying for provincial forgiveness blocks you from also using RAP, and nothing about using RAP affects your eligibility for forgiveness. A Nova Scotia graduate can receive the automatic Nova Scotia forgiveness at graduation, which reduces the provincial loan principal, and separately apply for RAP if their income after graduation is too low to manage payments on whatever federal and remaining provincial balance is left. According to Nova Scotia Student Assistance , RAP applies to your combined federal and Nova Scotia loan balance, so the reduced payment RAP calculates reflects your post-forgiveness debt, not your original loan amount.

What forgiveness does not touch

Provincial forgiveness is not a repayment plan and does not adjust your monthly payment on its own. If your remaining balance after forgiveness still produces a payment you cannot manage, you still need to apply for RAP separately to bring that payment down. Forgiveness also does not apply to federal debt, graduate or professional degrees in most provincial programs, or a second undergraduate degree, so confirm exactly what your province's version of this program covers before assuming your whole balance qualifies.

What this looks like in practice

Take a Nova Scotia student who borrows the maximum Nova Scotia Student Loan of $200 a week across a four-year degree, alongside the federal Canada Student Loan. At graduation, the Nova Scotia Student Loan Forgiveness Program cancels part of that provincial debt automatically, up to $20,400, based on the actual years of study and the loan issued from August 1, 2015 onward. The federal loan, and any remaining Nova Scotia balance above the forgiven amount, moves into standard repayment six months later. If the graduate's income at that point is too low to manage the remaining payment, they apply for RAP through NSLSC, and RAP recalculates their required payment against the post-forgiveness balance, not the original amount borrowed.

Check your own province

Nova Scotia's program is one example of a wider pattern. Other provinces run their own forgiveness, debt reduction or remission programs with different amounts, eligibility rules and application processes, so confirm what your specific province offers directly with your provincial student aid office rather than assuming Nova Scotia's terms apply elsewhere. Contact the National Student Loans Service Centre about RAP regardless of which province issued your loan, since RAP is a federal program available to any qualifying borrower.