Lana Oconnell
If you've taken out a student loan in Quebec, you'll need to start thinking about repayment when you graduate or interrupt your studies. The Quebec government pays the interest on your loan while you're a full-time student, but after your last day of full-time studies, interest starts accruing on your loan at the beginning of the next month. You can choose to repay your loan in full or in part upon graduation, or you can wait six months after the end of your studies and pay the interest that has accumulated. If you're unable to start repaying your loan, you may be eligible for a Deferred Payment Plan, which allows you to postpone repayment without interest. Additionally, if you studied full-time, received a bursary each year, and completed your program on time, you may be eligible for a 15% loan remission.
| Characteristics | Values |
|---|---|
| Loan provider | Gouvernement du Québec |
| Interest charges | Accrue during the six-month exemption period after graduation |
| Interest payer | Quebec government, while the student is considered full-time |
| Repayment start | Six months after the end of studies |
| Repayment options | Full or partial repayment upon graduation, or Deferred Payment Plan |
| Loan remission | 15% debt reduction for completing studies on time |
| Loan and Scholarships Program | Offered by the Quebec Ministry of Education and Higher Education |
| Application validation | Monthly or one-off funding based on the level of support from the banking institution |
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What You'll Learn
Loan remission and collection agreements
The Quebec government offers a Loan Remission Program that allows you to reduce your student loan debt by 15% if you studied full-time and completed your program within the expected deadline. To be eligible, you must have received a bursary from the Loans and Bursaries Program for each award year during which you were studying. You have three years after completing your program to submit your application for loan remission. The amount of the loan remission is paid to the financial institution that awarded your student loan and is used to repay part of your loan.
If you are unable to start repaying your loan due to financial difficulties, contact your financial institution to discuss alternatives. You may be eligible for a Deferred Payment Plan, which allows you to reduce your payments for a renewable period of six months. During this grace period, interest will be added to your debt.
If you stop repaying your loan, your financial institution will transfer your file to the Collection Department, which will ask you to enter into a repayment agreement. Your provincial tax refunds and Social Solidarity credits will be used to pay off your loan without notice, even if you are making payments.
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Part-time study loans
The Part-Time Education Loan Program provides financial assistance to eligible part-time students in the form of a loan per term of study. To be eligible, you must be a Canadian citizen and a resident of Quebec. The loan amount is calculated based on your family situation, allowable expenses, and student category.
To apply for a part-time study loan, you must complete a loan application and, if necessary, have another person (such as a spouse, parent, or sponsor) complete a Schedule. You must also submit a Guarantee Certificate to your educational institution. If your situation changes during your studies, be sure to notify the relevant parties.
You are still responsible for repaying your part-time study loan. However, if you need to interrupt your studies, you may be able to defer your loan payments. The period covered by the deferred repayment is generally 6 months, and you can apply for a renewable period. If you do not repay your student debt, you will need to make an agreement with Student Financial Assistance Collections. Your provincial tax refunds and Social Solidarity credits may also be used to pay off your loan.
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Deferring payments
If you are in a precarious financial situation, you may be able to reduce the amount of your payments or pause them for a set period of time using the Deferred Payment Plan. To be eligible, you must meet the following requirements:
- You are in a precarious financial situation.
- You have discontinued your studies for more than 6 months.
- You must repay a loan obtained through the Loans and Bursaries Program or the Loans Program for Part-time Studies to a recognized financial institution.
Each application covers a period of 6 months. If a payment is scheduled, your financial institution will only deduct the set amount for the 6 months of your application. The government will pay the interest on your behalf, and you will not be required to repay it. If you are in part-time studies, the Deferred Payment Plan allows you to pause payments on your full-time studies loan during this period.
It is possible to make a retroactive application, but the application must not go back more than 6 months from the date when you submit it. In this case, if payments are due for past months, the payments will be collected in a single payment within days after your application is accepted.
Please note that you can no longer make an application for the Deferred Payment Plan. Your provincial tax refunds and Social Solidarity credits (if you have them) will be used to pay off your loan without notice, even if you make payments.
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Repayment plans
Repaying your Quebec student loan is a critical aspect of your financial journey. Understanding the available repayment plans is essential to make informed decisions. Here is a detailed guide to help you navigate the repayment process:
Immediate Repayment:
You have the option to start repaying your Quebec student loan as soon as you finish your studies. While this plan may result in higher initial payments, it can save you money in the long run by reducing the overall interest charges on your loan. Immediate repayment demonstrates financial discipline and can help you become debt-free faster.
Deferred Payment Plan:
If you face financial difficulties after completing your studies, you may be eligible for the Deferred Payment Plan. This plan allows you to postpone your loan repayments for a renewable period of six months. During this time, you won't be required to make any payments, but interest will continue to accrue, increasing your overall debt. The Deferred Payment Plan can provide temporary relief, giving you time to improve your financial situation.
Partial Repayment:
If your budget allows, you can choose to make partial repayments on your Quebec student loan. This option lets you repay a portion of your loan upon graduation, while also taking advantage of the six-month exemption period. By making partial repayments, you can reduce the overall interest charges and decrease your debt burden over time. This plan offers flexibility, allowing you to balance your financial obligations and manage your cash flow effectively.
Loan Remission Program:
The Quebec government offers a Loan Remission Program to incentivize timely completion of studies. If you complete your program of study within the normal time limit and receive a bursary under the Loans and Bursaries Program each year, you may be eligible for a 15% reduction in your student loan debt. This program rewards students who finish their studies as planned, providing a significant financial benefit.
Financial Institution Arrangements:
If you are unable to repay your loan as agreed due to financial constraints, you should contact your financial institution. They can advise you on alternative arrangements or repayment plans that take your current financial situation into account. Each financial institution has its own processes, so it's important to communicate with them directly to explore these options.
Remember, it's crucial to stay informed about the terms and conditions of your Quebec student loan and to make repayment decisions that align with your financial capabilities and goals.
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Tax credits
If you are struggling to make payments on your Quebec student loan, you can apply for a deferred payment plan. This will allow you to reduce the amount of your payments for a renewable period of 6 months. However, if you stop repaying your loan, your financial institution will transfer your file to the Collection Department, and you will need to make a repayment agreement with them.
If you are a Canadian citizen, permanent resident, or protected person, you may be eligible for a non-refundable tax credit of 15% on any money you put toward your government student loans. This credit can be saved for up to five years and claimed when needed. To be eligible, you must be a permanent resident of a province or territory that issues student loans, demonstrate financial need, and be enrolled in an eligible degree, diploma, or certificate program. There are different requirements for full-time students, part-time students, and students with permanent disabilities.
You can claim a tax credit for interest paid on your student loan if it was granted to you under the Act respecting financial assistance for education expenses, the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act (federal statute), or a similar provincial or territorial law. However, you cannot claim an amount for interest paid on any other type of loan (such as a line of credit) or on a student loan that was combined with another type of loan. Only the person who took out the loan can claim the interest paid. To claim the tax credit, complete Schedule M and file it with your return.
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Frequently asked questions
You must repay your student loan to the financial institution that gave you your guarantee certificate at the beginning of your studies. You will receive a notice 6 months after the end of your studies, but you can also choose to start paying sooner to save money on interest charges.
If you are strapped for cash, contact your financial institution to work out an arrangement. You may also be eligible for a Deferred Payment Plan, which allows you to postpone repaying your debt for a few months without interest.
The Quebec Student Loan Remission Program forgives 15% of the student loan debt of anyone who completes their studies within the given period and received a bursary under the Loans and Bursaries Program each year of study.
To be eligible for a Quebec student loan, you must have Canadian citizenship, permanent resident status, refugee status, or protected person status. You must also be a Quebec resident, be admitted to a recognized educational institution, and be pursuing full-time studies in a recognized program.
