Student Debt in Canada: A Christian Guide to Tackling Your Loans

The email from the National Student Loans Service Centre lands about five months after convocation. Your six-month grace period is ending; repayment begins soon; here is your schedule.

You read it on your phone somewhere between shifts, and your stomach does the thing it does, because between the diploma and the job hunt you had almost managed to forget the loan existed. Now it has your new address.

I know something of that weight. My wife and I started our marriage with student debt. She had two years of school left when we got married, so we lived on my income while she finished, and we paid off her loans as soon as she graduated. I will not pretend it was fun. It was slow and it was boring. It worked.

This guide is the map I wish someone had handed me at the start of that stretch. What you actually owe, in Canadian terms, with the rules as they stand. The order to attack it. What to do about giving and investing while you owe. And underneath all of it, the honest question of what this season is doing to your heart, because debt is rarely just a math problem.

Let's start where every real plan starts.

Before You Feel Anything About the Debt, Find Out What It Actually Is

Most graduates I talk to cannot tell me what they owe. They have never once looked at the whole thing in one place, and some part of them suspects that looking will make it worse.

It won't. The vagueness is what is making it worse. Repayment starts the night the fog becomes a list.

So build the list. Canadian student debt usually hides in up to four places, and they behave very differently.

The federal portion of your student loan. If you borrowed through your province's student aid program, OSAP in Ontario's case, part of that money came from the Government of Canada. Here is the single most important fact in this article: as of April 1, 2023, Canada Student Loans are permanently interest-free. The balance still has to be repaid, but it is no longer growing while you sleep.

The provincial portion. The rest of that same loan came from your province, and this is where geography matters. Ontario still charges interest on its share, at prime plus 1%, floating. Several other provinces have eliminated interest on their portions entirely. If you studied in Ontario, log in to the NSLSC and find the split. A typical integrated loan is roughly 60% federal and 40% Ontario, which means close to half your balance may be quietly compounding.

A bank student line of credit. If you topped up with a student line of credit, that debt lives at your bank and follows the bank's rules. There is no government repayment assistance behind it, and its interest earns no tax credit. Whatever grace the bank extends is the bank's to withdraw.

A credit card remainder. The groceries and textbooks of third year, still riding at 20% or so. If any of your student life ended up on a card that never got cleared, it belongs on the list too, near the top.

One more number for context: Statistics Canada's graduate survey puts average debt for a bachelor's graduate who borrowed at roughly $30,000. You are a thoroughly normal Canadian graduate with a thoroughly normal Canadian problem, and as of tonight, a plan.

Open a notebook or a blank note on your phone. Four columns: who you owe, the balance, the interest rate, the minimum payment. Twenty minutes, every account, one page.

That page is worth more than this whole article.

The Weight You Feel Is Real, Even When the Interest Rate Is Zero

Here is what surprised me in my own season of repayment, and what I have heard from men since. The federal government can set your interest rate to zero. Nobody can set the shame to zero for you.

The balance is a number on a screen. The story you have been telling yourself about the balance is where the real damage happens.

The story usually sounds like this: I am behind. Everyone else my age is buying condos and I am mailing money into a hole I dug at nineteen. If people knew, they would think less of me.

Scripture is more honest about debt than most of us are. "The borrower is the slave of the lender," says Proverbs 22:7, and anyone who has watched a payment leave his account on the 15th of every month knows exactly what that verse means. It is a warning about weight, written by someone who understood weight.

But notice what Scripture does not say. It does not say the borrower is worthless. It does not say the borrower is disqualified. The Bible treats debt as a burden to be lifted, with patience and effort, the way you would treat any heavy thing. Nowhere does God treat your loan as your identity. The underlying question is worth settling plainly, and whether it is a sin to be in debt has a shorter answer than most men expect.

That distinction matters, because guilt and conviction do very different work. Conviction draws you toward God and toward action. It says: this weight is real, let's carry it out of here. Guilt just pins you to the floor and tells you to stop checking the balance.

If the shame around your student debt has you avoiding the numbers and hiding the real total from the people closest to you, then the debt is doing spiritual damage ahead of the financial kind. That is worth taking seriously, and it is worth taking to God, because your standing before him was settled at the cross, and it did not have a balance attached.

You are allowed to start from where you are.

The Repayment Order That Fits How Canadian Student Debt Actually Works

Now the mechanics. Because Canada made federal student loans interest-free, the smart order of attack changed, and a lot of older advice quietly expired. Here is the sequence I would give a friend, once the minimums on everything are being paid on time. It follows the same convictions as the broader 7 Biblical Steps to a Debt-Free Plan, tuned for the way student debt is actually built in this country.

First, keep a small buffer between you and the credit card. Before any extra repayment, set aside a starter emergency fund of about $1,000. Without it, the first car repair goes straight onto the card and undoes two months of progress. This is the boring foundation everything else stands on.

Second, kill the credit card balance. Anything at 20% is a five-alarm fire. A $3,000 balance at 21% quietly takes about $52 a month in interest before a single dollar of principal moves. Every spare dollar goes here until it is gone, and then the card gets paid in full every month, forever.

Third, take down the bank line of credit. It is likely floating somewhere in the prime-plus range, with none of the government protections. Once the card is dead, this is the target.

Fourth, attack the Ontario portion of your student loan. In Ontario this is the last of your balances that actually grows. When you make an extra payment through the NSLSC, direct it against the provincial portion and confirm it is being applied to principal.

Fifth, and last, the interest-free federal portion. With the rate at zero, there is no mathematical fire here, just a schedule. The NSLSC default amortization runs about nine and a half years, which is longer than most men need. Shorten it if the weight bothers you more than the flexibility helps you, and there is real wisdom in being done. But if the choice is between an extra federal loan payment and starting your TFSA, the spreadsheet leans toward the TFSA. I have written a full guide on that exact tension in Should You Pay Off Debt or Invest?, because the honest answer has more moving parts than one paragraph can hold.

A word about the six-month grace period, because it is quieter than it looks. No payments are required, and that breathing room is a genuine mercy while you hunt for work. But in Ontario, interest is already accumulating on the provincial portion during those months. If you are living at home with low expenses, the grace period is the single cheapest stretch of your entire repayment to get ahead in. A payment made in month two is all principal against a balance that has barely started to grow. The rules give you six months off; nothing in the rules says you have to take them.

Two protections to know before someone talks you out of them.

The Repayment Assistance Plan. If your income is low, RAP is the difference between falling behind and breathing. Apply through your NSLSC account. Below the income threshold for your family size, around $40,000 for a single person, your required payment can drop to zero for the six-month term, and the government covers the interest that accrues. Reapply every six months for as long as you qualify. Missing payments wrecks your credit; RAP does not.

The tax credit on student loan interest. Interest paid on government student loans earns a 15% federal non-refundable credit, and unused amounts carry forward five years. Interest on a private line of credit earns nothing. This is one big reason to be suspicious when a bank offers to "consolidate" your government loans into their product: you would lose RAP and the interest tax credit, and you would hand back an interest-free federal rate, all for a slightly tidier statement.

If your debt has already spiraled past student loans into something broader, start with the wider map in A Christian Guide to Getting Out of Debt and come back here for the student-loan specifics.

Yes, You Can Still Give While You Owe

Somewhere in month three of repayment, a reasonable-sounding voice will suggest pausing your giving until the debt is gone. It will frame this as stewardship. Wouldn't God rather you be debt-free?

I want to push back on that gently, as a pastor who has asked himself the same question.

When a man starts constructing careful arguments about why this particular season exempts him from generosity, the real question is usually underneath: are you trying to reason your way out of giving to God? I have given the direct version of this in should you tithe while paying off debt. The tithe was never a bill God needs paid. Giving is how a man learns, in his actual chequing account, that God provides and money serves. Repayment season is when that lesson costs something, which is exactly when it forms something.

My wife and I kept giving through our own debt years, and I will tell you plainly that it was hard some months. I will also tell you that I do not remember a single one of those gifts with regret.

There is a real exception, and I will name it rather than pretend it away. If you genuinely cannot make your minimum payments, and you have already cut the frivolous spending, then keeping your word to your creditors is itself an act of integrity, and a smaller gift for a season is honest. That is a conversation to have with your pastor, out loud, rather than a quiet decision made alone. For most men reading this, though, the honest math says the giving could survive if the spending flinched first.

And if you are just starting your working life and wondering how all these pieces stack together, the fuller sequence lives in Christian Personal Finance in Your 20s.

This Season Is Building the Man Who Handles Every Dollar After It

Here is the part nobody tells you at convocation.

The habits you build getting out of this debt will outlive the debt by decades. The man who learns at twenty-five to live below his income and to keep giving when it pinches has learned the core curriculum of stewardship. Most of what my wife and I do with money today took its shape while we paid off her student loans on one income. The amounts changed. The muscles didn't.

Paying down debt is hard work. It takes sacrifice. It takes lifestyle change. But "let us not grow weary of doing good," Paul writes, "for in due season we will reap." Due season is a farming phrase. It means the harvest comes after a long stretch of unglamorous mornings, and it does come.

There will be a month, sooner than the amortization schedule claims, when you log in to the NSLSC and the number starts with a smaller digit than you remembered. Then a month when a whole loan disappears from the list. Nobody throws a party. You will want to tell someone anyway.

Tell them. Progress a man never speaks out loud stops feeling real to him.

Start With One Move This Week

Here is your one move. Just one, because five-step plans are usually dead by Thursday.

Pick a night this week and build the list. Log in to the NSLSC and write down the federal and provincial balances separately, with the Ontario rate beside its portion. Add the line of credit from your bank's app. Add the credit card. Four columns on one page: who, how much, what rate, what minimum.

Then, while the page is still in front of you, set up one automatic payment above the minimum, aimed at whichever debt on your list carries the highest rate. It does not need to be heroic. Fifty dollars every payday, leaving your account the morning the paycheque lands, will do more than a hundred sincere intentions, because it never asks how motivated you feel in week thirty.

If you are married, or close to it, show her the page. The number is easier to carry in daylight, and she would rather know the real total than sense a vague weight you keep flinching around.

The Diploma Was Not the Only Thing You Were Earning

That email from the NSLSC felt like an ending when it landed. Grace period over, and the bill for your education arriving just as you were starting to feel like an adult.

But grace, the real kind, does not run out after six months. God is not waiting at the end of your amortization schedule to be pleased with you. He walks the whole nine and a half years, or the four you turn it into, forming a steward out of a stressed-out graduate one automatic payment at a time.

The loan paid for the degree. The repayment is paying for the man.