Student Loan Cap Raised; Grant Eligibility Limited

Summary#

These are final amendments to the Canada Student Financial Assistance Regulations that take effect on August 1, 2026. They raise the cap on outstanding federal student loans from $34 billion to $40 billion, and they limit who can get the Canada Student Grant for Full‑Time Students to students at public and not‑for‑profit private institutions, with some short‑term and later exemptions for selected programs at for‑profit private institutions.

What it does#

• Increases the portfolio loan limit from $34 billion to $40 billion so the federal government can keep issuing new Canada Student Loans.
• Restricts eligibility for the Canada Student Grant for Full‑Time Students so it is generally only available to students attending:
  • public institutions, and
  • not‑for‑profit private institutions.
• Creates exemptions for the 2026–2027 school year that allow certain students at for‑profit private institutions to still get the full‑time grant. For 2026–2027 the exemption applies to programs of at least two years / 60 weeks that lead to one of these occupations:
  • nurse
  • dental hygienist
  • early childhood educator
  • paramedic
• For the 2026–2027 year, most participating provinces/territories will implement exemptions at the institution level; British Columbia and Manitoba will implement them at the program level.
• Starting in the 2027–2028 year, a for‑profit private institution or a province/territory can apply for an exemption for a specific program by October 15 before the school year. The Minister will grant an exemption if at least two of these three conditions are met:
  • the Minister sees a labour‑market need for the occupation;
  • the occupation is regulated by the province where the institution is located;
  • the province where the institution is located does not oppose the exemption.
• The Regulations come into force on August 1, 2026.

Who's affected#

• Students who rely on federal student loans and grants, especially:
  • students at for‑profit private institutions (many of whom may lose grant eligibility);
  • students at public institutions and not‑for‑profit private institutions (unaffected or may see more applicants).
• For‑profit private institutions that offer two‑year programs. Some of their students will no longer qualify for the full‑time grant unless the program is exempted.
• Provincial and territorial governments that take part in the federal student aid program. Some provinces (notably British Columbia and Manitoba) will apply the first‑year exemptions differently.
• The federal government (it can keep issuing more loans and expects additional loan disbursements of about $9.5 billion over 10 years under the new cap).

If anything is unclear about which specific programs will be exempt beyond 2026–2027, that will depend on exemption applications and the Minister’s decisions.

Why it matters#

• Prevents a pause in loan payments: raising the loan cap to $40 billion avoids a situation where the Minister would no longer have legal authority to issue new Canada Student Loans. That keeps students’ access to loans running normally.
• Changes who gets grant money: the full‑time grant will no longer be generally available to students at for‑profit private institutions. The government estimates an average reduction of about $2,800 in full‑time grant funding per affected student and projects savings to the government of roughly $1,090.2 million (present value) over 10 years.
• Real choices for students: some students at for‑profit institutions may:
  • switch to a public or not‑for‑profit institution to keep grant support,
  • accept more loan funding instead of grants, or
  • face higher out‑of‑pocket costs if they stay.
• Short‑term exceptions and a clear application process for later years are in place for programs tied to labour‑market needs. That is intended to protect training in some health and care occupations while the new rules settle in.
• The immediate effects and longer‑term impacts will depend on how many programs receive exemptions and how students and institutions respond.