Canada GSL Deposit and Payment – Things to Know in June 2024

WRITTEN BY Dan Kent | UPDATED ON: May 24, 2024

Canada GSL Payment and Deposit

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The progression from finishing high school to starting university is an exciting time for young adults, although it can also be somewhat daunting.

The world of post-secondary can be an incredibly complex place. Students must successfully navigate everything from scholarships to budgeting, all while tackling many different problems -- like what they want to be when they "grow up," something that can change multiple times before graduation.

Many students are completely overwhelmed, and it's easy to see why. 

Fortunately, the government has a multitude of options to provide Canadians with relief. Whether it be the Climate Action Incentive Payment or what we'll talk about in this article, the Canadian GSL, there is likely some opportunities as a student to gain access to funding or grants. 

Here's everything you need to know about the Canadian Government Student Loan (GSL) program, including eligibility, how to apply, and the various rules used by each province and territory. 

What is the Canada GSL program?

The Canada GSL program is a financial aid program for eligible full-time students. Part-time students can also apply but won't qualify for as many financial rewards. It is available to Canadian citizens, as well as any permanent residents. 

Is Canada GSL a loan or grant?

The federal government issues this form of student financial assistance through loans or grant payments. Canada Student Grants are gifts from the government, while Canada Student Loans must be paid back. Both these are grouped under one program, GSL. 

It is available for undergraduate students, graduate students, and even those pursuing post-doctoral studies. Additional resources for serving or former Canadian forces member and their families include special Royal Military College scholarships.

The program is run by the Canada Revenue Agency (CRA), distributing on behalf of the federal government. In addition, many provincial and territorial governments also use the federal government to distribute their student aid programs. 

How does the Canada GSL work?

Students can apply for free, but approval isn't guaranteed. It is based on a merit system which factors in things like your chosen program's tuition fees, family income, family size, the number of dependents, or whether the applicant has a disability. Your course load also matters since being a part-time student doesn't cost as much. 

Note the program isn't only available for traditional students who have enrolled in a college or university. Students in a registered apprenticeship program can also apply for grants and loans.

The nice part of the system is that applicants only have to apply in one place for federal and provincial programs -- unless the applicant lives in Quebec, Nunavut, or the Northwest Territories. If those are your province or territory of residence, you'll be forced to apply locally. 

The first step is determining the various grants each student is eligible for. This includes provincial and federal grants, and this amount can be surprisingly large for many students. Some will be able to combine grants and RESPs and have enough to cover their entire education, with no loans required.

Do you pay back Canada student grants?

Grants don't need to be paid back, so they are especially powerful. There are also more grants available to lower-income families. The grant portion of the program is designed to get more flexible student funding to those who have a greater need for it.

Students can use the Federal Student Aid Estimator to get a rough idea of the dollar amounts of potential grants they may qualify for and the maximum federal student loan they could expect.

A student is only eligible for a Federal Student Loan if they aren't eligible for a grant or if the grant isn't enough to cover the entire education cost. Each province will also have different eligibility standards based on where students live, where they go to school, and more. 

Both grant and loan money is combined into GSL deposits, with only the loan part needing to be paid back. In addition, interest on a Canadian government student loan doesn't accrue until after a student graduates. Student loans are also tax-free since the money is expected to be paid back. 

Federal student loans originate from the National Student Loans Service Centre (NSLSC), which operates a portal where borrowers can access their loan balance, see the interest rate, etc. 

How the provinces differ in terms of GSL

As mentioned earlier, the rules and eligibility criteria differ from province to province. Still, they are essentially broken down into four buckets of similar rules. 

The first bucket consists of British Columbia, Saskatchewan, Ontario, New Brunswick, and Newfoundland and Labrador. These provinces have fully combined their student loan and grant programs with the federal government's. 

Alberta, Manitoba, Prince Edward Island, and Nova Scotia do things differently. They have provincial student aid programs which combine with the federal program. These provinces offer separate student loan programs.

Next is the third basket of provinces and territories, including Quebec, Nunavut, and the Northwest Territories. These places offer their own student loan and territorial student aid programs. Citizens of those jurisdictions aren't eligible for federal student loans. 

Finally, we have Yukon, which has its own unique plan. It offers territorial grants, but it also offers the Canada GSL. 

Most provinces offer online portals where students apply for provincial loans, learn about the status of an application, and get info on repaying their loan when that time comes. Ontario's portal is operated by the Ontario Student Assistance Program (OSAP), while Alberta's is the responsibility of Alberta Student Aid. British Columbia's portal is run by Student Aid B.C. 

Repaying your Canada GSL

A student's Canada GSL deposit will consist of a grant and loan portions. Only the latter must be paid back. 

A universal rule of student loans is borrowers aren't required to make any payments until six months after they graduate from their specific program, but depending on the program, where you went to school, and the area where you go to live after graduation, loans can be deferred for years. Interest is also deferred for the first six months after graduation.

Student loans come with different interest rates depending on whether they come from the federal government or various provincial governments. Until recently, the interest rate charged on federal student loans was prime plus 2.5%. However, new rules were passed by the feds, and now borrowers won't have to pay any interest on their federal student loans. 

Federal and provincial loans will also have different payment schedules and repayment plans

Provincial student loans are as different as the province that offers it. For instance, Manitoba offers a 0% student loans program, provided the borrower is a citizen of the province. Nova Scotia offers 0% loans as well. Prince Edward Island not only offers 0% interest on their student loans, but they automatically apply for bursaries on the student's behalf once they've enrolled in an eligible post-secondary education program. 

Other provinces aren't nearly as aggressive in their programs. Ontario offers an interest rate of prime plus 1%. Alberta's interest rate is prime plus 2%, the same as Saskatchewan and New Brunswick. Quebec's program is notable for its low rates (prime plus 0.5%) plus the province's famous low-cost tuition. 

Both federal and provincial student loan payments are automatically taken from a borrower's bank account each month, and you're free to make extra payments to cut down on long-term interest costs.

The repayment assistance plan

Many graduates cannot find good employment soon after graduation, or they may choose to pursue further education. Suppose borrowers find their monthly payment too high or have too many other expenses to comfortably start paying back their loan when the time comes. In that case, they can apply for a repayment assistance plan (RAP). This income-based program determines the affordability of loans depending on family income and the size of the family.

For instance, borrowers living alone who earn up to $3,334 gross per month would qualify for repayment assistance. A family of seven, meanwhile, can earn up to $7,316 gross per month and still qualify for repayment assistance.

There's also a special repayment assistance program for borrowers with poor health status, including those with permanent disabilities. These folks will qualify for additional benefits but must reapply every six months to stay on the program. 

Those who owe money to provincial student aid programs can also apply for repayment assistance. Still, rules will differ on a province-to-province basis. Some provinces have the same rules as the feds. Others don't. 

Governments are ultimately willing to work with graduates who have encountered temporary difficulties. But be proactive; many repayment assistance programs are only open to those who are current on their loans.