Post-Secondary Students’ Education Assistance Confirmed

Evelyn Jacks

Is there a prospective teacher, social worker or midwife in the family?   An educational seminar about the new tax and student debt assistance available to Canadian families may be a good way to celebrate the busy back to school month of September.    Here’s an overview:

The Federal government confirmed this week that $7.3 billion in grants and interest-free loans are available for students this academic year, as well as loan forgiveness measures for an expanded list of graduates who work in remote areas.  Now is a good time to discuss post-secondary education funding with parents as well, given the savings incentives available.

• Extension of Increases to Canada Student Grants.  For one more year the extension of these grants from $3,000 to $4,200 per year will be offered.  Grants for part-time students, students with disabilities, and students with dependants will also increase proportionately.
• Research Grant Increases.  A 30 per cent increase over five years is available under Canada’s core research grant programs for faculty-led research projects. This will provide assistance to graduate student and post-doctoral fellows with research, including work on climate action, health emergencies, artificial intelligence, and psychological health.
• Increased Scholarships For Master’s And Doctoral Students.Qualifying students will receive scholarships of  $27,000 and $40,000, respectively, and post-doctoral fellowships to $70,000.
• Permanent Elimination of Credit Screening. Targeted at students aged 22 and older who are returning to school but have low credit scores, this measure will help up to 1000 more students receive student aid.  
• Canada Student Loan Forgiveness Extended. Graduates who  have been employed for a full year and provide in-person services for a minimum of 400 hours in an eligible community (does not apply to residents in family medicine) and who have a Canada Student Loan in good standing may qualify for loan forgiveness of up to $60,000.   The following professionals have been added to the list of doctors and nurses who previously qualified:
  • Doctors;
  • Dentists;
  • Dental hygienists;
  • Pharmacists;
  • Midwives;
  • Early childhood educators;
  • Teachers;
  • Social workers;
  • Personal support workers;
  • Physiotherapists; and,
  • Psychologists.
• Eliminated Student Loan Interest.  Since April 1, 2023, interest charges have been permanently eliminated on all Canada Student Loans and Canada Apprentice Loans.  According to Finance Canada this will save the average student loan borrower an average of $610 every year.
• Loan Repayment Postponement for Low Income Earners.  After graduation, borrowers do not need to make payments on their interest-free loans until earning at least $44,388 per year. 
• Canada Training Credit.  The qualifying minimum income required to be earned in the previous year will now include EI Adoption Benefits.  The refundable credit has been increased by another $250 this year.
• The RRSP Lifelong Learning Plan is also available to fund education.   Unfortunately, this is not available to fund a child’s education but it can be used to fund an education for the taxpayer or spouse/common-law spouse.   For full time training it is possible to draw up to $10,000 in a calendar year from RRSP savings. As long LLP conditions are met every year, it is possible to withdraw amounts until January of the fourth calendar year after the year the first LLP withdrawal is made to a maximum of $20,000 in total.

Bottom Line – It is easier to fund education in Canada now; but an education on debt repayments is still required.  This is where caring tax and financial advisors come in to set up good debt management habits and enjoy the opportunity to build new client relationships for life.

Evelyn Jacks is President of Knowledge Bureau and an award-winning financial educator and business woman and author of 55 books on tax efficient family wealth management.