A guide to loan forgiveness and relief programs for med school students and recent grads
Now that you've graduated from medical school, you may have considerable accumulated medical school debt you'll need to tackle. Even with a well-paying position in the medical field, it can take years to pay back what you owe. But there is some good news. There are ways to have a portion of your debt relieved or forgiven through several federal and provincial government programs.
What are student loan relief and forgiveness programs? How does it work?
When it comes to paying for medical school in Canada, there are several government programs that can help relieve the financial burden.
Student loan relief programs in Canada
Student loan relief programs provide a break from paying principal or interest on any government student loans during medical residency, making repayment a bit more manageable. Some of these programs have conditions and eligibility requirements, though, so if you don't abide by the specific terms, you'll have to pay your medical school loans in full.
In April 2021, the federal government announced an interest-free period on Canada Student Loans that will extend to March 31, 2023. If you have a federal student loan, interest won't accumulate during this period.
Student loan forgiveness in Canada
Student loan forgiveness programs may erase some of your student loan debt, but they can also come with strings attached. For example, as a family physician or resident, you may qualify for loan forgiveness for your student loan through the federal government's Canada Student Loan forgiveness program, but only if you choose to work in underserved or rural communities.
Before submitting your application for the Canada Student Loan forgiveness program, make sure you're eligible. You must have started your employment in an underserved or rural community on or after July 1, 2011, have been employed for a full year while providing in-person services for a minimum of 400 hours in that community, and your Canada Student Loan must be in good standing. If you are eligible, you can qualify for up to $40,000 in forgiveness over a maximum of five years.
Student loan forgiveness and relief options: by Canadian province, territory
Canada’s student loan forgiveness program covers only the portion of the loan that comes from the federal government. However, many provinces have student loan forgiveness or relief programs for individuals working in specific medical professions or certain areas.
Here's how it breaks down:
British Columbia
B.C. Loan Forgiveness Program
Program highlights
For recent graduates in select in-demand occupations, the province will forgive the outstanding balance of the BC portion of your student loan at a rate of up to a maximum 20% per year for up to five years — and pay any accumulated interest if you agree to work in an underserved community, or working with children in occupations where there is an identified shortage in the province.
Who is eligible
You must be currently repaying an outstanding BC student loan and are presently (or plan to be) employed as a physician, including residency, at a publicly funded facility in an underserved community in BC.
How to apply
Complete the B.C. Loan Forgiveness Program application and submit it to StudentAid BC, along with an employment letter.
Alberta
Interest-free status for medical residents
Program highlights
If you have an Alberta student loan, you are not required to pay interest or make payments while you are in residency.
Who is eligible
You must be a physician engaged in medical residency training.
How to apply
Complete a Confirmation of Registration (Form B) and submit to Alberta Student Aid Service Centre.
Saskatchewan
Graduate Retention Program
Program highlights
If you're a post-secondary graduate living in Saskatchewan, you can receive a rebate of up to $20,000 for tuition fees.
Who is eligible
You must live and file your income tax return in Saskatchewan.
How to apply
Most Saskatchewan post-secondary institutions apply on your behalf. If you are a resident but attended a post-secondary institution elsewhere in Canada, you can apply directly to the Ministry of Advanced Education.
Ontario
Resident Loan Interest Relief Program
Program highlights
Get a break from paying principal or interest on any government student loans during medical residency, if you agree to practice in Ontario for five years after completing residency.
Who is eligible
You must be a registered Ontario medical resident and have outstanding federal, Ontario or other province/territory student loans.
How to apply
Apply for the program by completing a Return of Service Agreement with the Ministry of Health and Long-Term Care and be approved for a Medical Resident Loan with the Ministry of Colleges and Universities.
Quebec
Quebec Loan Remission Program
Program highlights
Up to 15% of your provincial student loan will be forgiven if you meet the criteria.
Who is eligible
You must have completed your degree and have received a bursary under the Loans and Bursaries Program every award year while studying in that program.
How to apply
Complete and submit the Loan Remission Application form.
Note: Quebec has also suspended interest on student loans — you don't have to pay interest on your provincial loan until March 31, 2023. This applies only to loans obtained through Aide financière aux études.
Nova Scotia
Nova Scotia Student Loan Forgiveness Program
Program highlights
The program may help you repay the provincial portion of your loan for five years, up to $20,400 of forgiveness.
Who is eligible
You must be graduating from a Nova Scotia non-professional undergraduate program, have completed your entire degree within eight years of starting it, and have eligible Nova Scotia student loans.
How to apply
No application is required. Nova Scotia Student Assistance automatically reviews your provincial student loan account after your school tells them you've graduated. If you're eligible, you'll receive a letter in the mail which includes the amount of your loan that will be forgiven.
0% Interest on Nova Scotia Student Loans
Program highlights
If you live in Nova Scotia and have had Nova Scotia student loans since 2007, you can apply for 0% interest on the provincial portion. While your payment will remain the same, 100% of your payment will go towards paying the loan principal.
Who is eligible
You must be a graduate, have started to repay your loan since Nov. 1, 2007, and have filed last year's income tax as a resident of Nova Scotia.
How to apply
Complete the application and reapply in January of each calendar year to continue to receive 0% interest.
Prince Edward Island
Medical Residency Provincial Loan Repayment Relief
Program highlights
You may be able to temporarily set your loan balance to “non-payment" status while you complete your residency program
Who is eligible
You must be a resident of PEI, be enrolled in a medical residency program, and have a provincial student loan balance.
How to apply
Complete a Medical Residency Interest Relief Program application along with verification of your residency program (a contract or confirmation letter from your program administrator) and written proof of your student loan balance.
Debt Reduction Grant Program
Program highlights
If you plan to live and work in PEI following graduation, and you have borrowed at least $6,000 in provincial student loans, you could be eligible for a grant that you can use to reduce this debt. If you started schooling before Aug. 1, 2018, you could qualify for up to $2,000 per year of your studies; if you started after this date, you may be eligible for up to $3,500 per year of study.
Who is eligible
You must be a PEI resident (have been living in the province for a minimum of six months), have graduated in the last three years, and have a PEI student loan balance.
How to apply
Complete the Debt Reduction Grant Application form, obtain a copy of your degree or transcript, and provide proof of residency.
Northwest Territories
Northern Bonus
Program highlights
If you return to or reside in the NWT, you can apply for the Northern Bonus. It's applied to student loans from any province or territory in Canada and worth $2,000 a year up to a lifetime maximum of $10,000.
Who is eligible
If you have a federal or provincial/territorial loan and you've chosen the NWT to begin your career, you may qualify – if you've lived there for 12 consecutive months.
How to apply
Complete the form and include the required documentation from your lending agency.
Paying for medical school in Canada: The rest is up to you
While student loan forgiveness and relief programs may help you eliminate a portion of your debt, it's up to you to create a payment strategy for the rest. MD Financial Management can help. If you're having difficulty paying your student loan, one option could include consolidating your student loan (and other debt, like credit cards) into a line of credit to help lower your interest rate, reduce multiple payments to a single monthly payment and save you money.
For more information, contact an MD Early Career Advisor* today.
* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.
The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.