What Is the Student Loan Grace Period in Canada and When Does Interest Start?

You’ve just finished your last exam, handed in your final paper, or walked across the stage — and somewhere in the back of your mind, you know your student loan is waiting. You’ve probably heard there’s a “grace period” after graduation, but it’s surprisingly hard to find a straight answer on what it actually means for you: when does interest start? Do you have to make payments? What’s the clock on this thing?

Here’s everything you need to know about Canada’s student loan grace period, broken down simply, so you can make smart moves in the months after school ends.

Quick answer: Federal student loans in Canada (through the NSLSC) have a 6-month non-repayment period after you leave school. During this time, you don’t have to make payments. As of 2023, the federal government eliminated interest on Canada Student Loans permanently — so no interest accrues on the federal portion at any point. If you also have a provincial loan, the rules differ by province, and some provinces still charge interest during the grace period.

How Does the Federal Student Loan Grace Period Work in Canada?

The grace period on federal Canada Student Loans lasts six months from the date you leave school — whether that’s graduation, a program change, or dropping below full-time status. During this period, you are not required to make any payments.

The big news: since November 1, 2023, the federal government permanently removed interest on Canada Student Loans. This means the federal portion of your loan does not accumulate interest — ever. Not during school, not during the grace period, and not once repayment begins. That’s a genuinely meaningful change. If you borrowed $30,000 federally, that $30,000 is what you owe when repayment starts, full stop.

Your grace period begins automatically once the National Student Loans Service Centre (NSLSC) confirms you’ve left school. You don’t need to apply for it or notify anyone — it kicks in on its own.

Does Interest Accrue During the Grace Period in Canada?

On the federal loan side: no interest accrues during the grace period, thanks to the 2023 policy change.

On the provincial loan side, it depends entirely on your province. This is where people get tripped up. Canada Student Loans and provincial student loans are separate products that are often bundled together — but they have different rules.

• Ontario: Ontario eliminated interest on OSAP loans starting in 2019 for most borrowers, and that zero-interest policy still applies during the grace period.
• British Columbia: BC eliminated interest on provincial student loans in 2022.
• Alberta, Saskatchewan, Nova Scotia, and others: Some still charge interest during the grace period on the provincial portion. The rate varies.

If you’re unsure about your province, log into your provincial student loan portal or call the relevant office — your loan documents should list the lender. Don’t assume your provincial loan follows the same rules as the federal one.

Quick tip: Log into the NSLSC portal (nslsc.ca) as soon as you graduate and confirm your loan balance and repayment start date. It takes about 10 minutes and saves you from an unpleasant surprise six months later.

When Do You Have to Start Making Payments?

Your first required payment on federal student loans is due the month after your 6-month grace period ends. So if you finish school in April, your grace period runs May through October, and your first payment is due in November.

The NSLSC will send you a repayment notice before that deadline — but don’t rely on that as your only reminder. They send it to the contact information on file, which might be your school email you never check anymore. Update your contact info in your NSLSC account now.

One thing to know: you can start making voluntary payments during the grace period, and there’s sometimes good reason to. Even though no federal interest accrues, paying down principal early means a lower total balance when repayment officially begins. If you land a good job right out of school and have extra cash flow, it’s worth considering — though it’s not urgent the way it would be with a high-interest private loan.

If you have both a student loan and a student line of credit, note that the line of credit is an entirely separate product from a bank, not the government. Lines of credit typically begin charging interest the moment you graduate or finish school — there’s no grace period. That’s a key distinction.

What Are Your Repayment Options After the Grace Period?

Once repayment begins, you have several options for how you structure your payments through the NSLSC. The default is a standard 10-year repayment plan with fixed monthly payments. But you can also:

Choose a longer amortization period. Extending to 15 years lowers each monthly payment, which can help if your income is low in the first year or two after school. Since there’s no interest on the federal loan anyway, stretching out payments costs you nothing extra in interest — you just owe for longer.

Apply for the Repayment Assistance Plan (RAP). If your income is low, RAP can reduce or pause your monthly payments. The government covers any outstanding interest above what you’d pay under the plan — though since federal interest is now zero, RAP’s main benefit is just capping your payments at an affordable percentage of income. You apply through the NSLSC and need to reapply every six months.

Consider whether to pay more aggressively. If you also have high-interest debt — a credit card at 19.99%, for example — it almost always makes more sense to pay that down first before putting extra money toward your student loan. Your student loan repayment strategy should fit into your whole debt picture.

Frequently Asked Questions

Does the grace period mean I don’t have to pay anything for 6 months?

Yes — you’re not required to make any payments during the 6-month non-repayment period on federal Canada Student Loans. You can choose to make voluntary payments during this time, but there’s no penalty if you don’t.

Does interest still build up during my grace period in Canada?

Not on the federal portion. Since November 2023, the federal government permanently eliminated interest on Canada Student Loans, so no interest builds up during the grace period or at any point. However, some provincial loan programs still charge interest during the grace period — check your specific province’s rules.

What happens if I go back to school during the grace period?

If you return to full-time studies at an eligible institution, your loan re-enters in-study status and your grace period essentially resets. You’ll get a new 6-month non-repayment window when you leave school again. Let the NSLSC know you’ve re-enrolled.

Can I extend my grace period on a Canada Student Loan?

The standard grace period is fixed at 6 months. However, if you face financial hardship when repayment starts, you can apply for the Repayment Assistance Plan (RAP) to reduce or pause your payments. It’s not technically extending the grace period, but it achieves a similar result.

How is a student loan different from a student line of credit during the grace period?

Government student loans (through the NSLSC) have a 6-month grace period where no payments are required and no federal interest accrues. A student line of credit from a bank is a private product — it typically requires you to start paying interest immediately upon graduation, with no grace period. If you have both, the line of credit is the one to watch first.

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