Understanding Student Loan Repayment in Canada
Managing student debt is a priority for graduates from schools like Sheridan College, Humber, and York University. This calculator helps you estimate monthly payments for OSAP, Alberta Student Aid, and Canada Student Loans.
The Repayment Formula
Student loans in Canada are amortized loans. The formula to calculate your monthly payment ($M$) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- P: Principal Loan Amount.
- i: Monthly Interest Rate (Annual Rate / 12).
- n: Total Number of Payments (Months).
Current Interest Rules (2025)
As of 2023, the Government of Canada has permanently eliminated interest on the Federal portion of Canada Student Loans. However, the Provincial portion (e.g., Ontario, Alberta) may still carry interest.
Frequently Asked Questions
What is the average interest rate for student loans?
Currently, the Federal portion is 0%. Provincial portions often track the Prime Rate (approx 6.45% - 7.2%). If you have a private line of credit from a bank (TD, RBC, Scotiabank), your rate is likely Prime + 1%.