Loan Forgiveness Expansion to 10 Occupations

Summary#

This is a proposed change to the Canada Student Loans Regulations and the Canada Student Financial Assistance Regulations that would expand federal student loan forgiveness to 10 more health and social‑service occupations in under‑served rural or remote communities. If approved, the rules would set different maximum forgiveness levels by occupation group and are expected to take effect on November 1, 2025.

What it does#

• Adds these 10 occupations to the existing loan‑forgiveness program: early childhood educators, dentists, dental hygienists, pharmacists, midwives, teachers, social workers, personal support workers, physiotherapists, and psychologists.
• Organizes eligible occupations into three groups with different maximum forgiveness amounts over five years:
  • Group 1 (longer professional training): up to $60,000 total.
  • Group 2 (medium training): up to $30,000 total.
  • Group 3 (shorter training): up to $15,000 total.
• Keeps an annual step-up schedule for the amounts a borrower can receive each year of service (larger amounts in later years of the five‑year window).
• Requires at least 400 hours of in‑person work in the previous year to qualify (with exemptions for illness, caregiving, pregnancy, or parental leave).
• Limits total forgiveness to five years per borrower across all eligible occupations (so time used in one job reduces remaining eligibility for another).
• Uses the existing definition of eligible communities (population centres of no more than 30,000 or rural areas); note that some previously eligible “legacy” communities are not included for the newly added occupations.
• The item in the Canada Gazette is a proposal. The government invited comments for 30 days after publication on February 15, 2025.

Who's affected#

• Borrowers with outstanding federal student loans who work (or plan to work) in the newly listed occupations in eligible rural or remote communities.
• Residents of those rural and remote communities who may gain better access to health, education and social services.
• The federal government (program costs and administration).
• The proposal estimates it would incentivize about 27,822 professionals to work in eligible communities over a 10‑year period, and directly benefit about 7,968 borrowers in the first year rising to about 19,025 annually by year ten.

Why it matters#

• It aims to reduce shortages of essential health and social‑service workers in smaller and remote communities by using a financial incentive (loan forgiveness) to encourage relocation and longer local service.
• More early childhood educators could increase child‑care availability, which the government expects would help parents return to work in rural areas.
• The government’s cost‑benefit estimate shows a projected net positive fiscal impact (monetized benefit $944.1 million vs. cost $653.8 million, net $290.3 million over 10 years), though those figures are the government’s estimates and depend on how many people take up the program.
• This is a proposal, not yet law. The public comment period and final approval will determine whether and in what form these rules come into force (the draft sets a planned start date of November 1, 2025).