Expanded Student Loan Forgiveness for Rural Workers

Summary#

This is a proposed change to the Canada Student Loans Regulations and the Canada Student Financial Assistance Regulations that would widen the federal loan-forgiveness program for people who work in under-served rural or remote communities. If adopted, 10 more occupations (like dentists, teachers and early childhood educators) would become eligible for staged loan forgiveness, with the rules planned to come into force on November 1, 2025 (proposal stage — comments were invited for 30 days).

What it does#

• Adds these 10 occupations to the forgiveness program: early childhood educators, dentists, dental hygienists, pharmacists, midwives, teachers, social workers, personal support workers, physiotherapists, and psychologists.
• Groups occupations into three tracks with different forgiveness totals over five years:
  • Group 1 (longer training): up to $60,000 total; annual schedule $8,000, $10,000, $12,000, $14,000, $16,000.
  • Group 2 (4–6 years study): up to $30,000 total; annual schedule $4,000, $5,000, $6,000, $7,000, $8,000.
  • Group 3 (shorter programs): up to $15,000 total; annual schedule $2,000, $2,500, $3,000, $3,500, $4,000.
• Keeps a requirement that applicants provide at least 400 hours of in-person service in the year to qualify, but allows exemptions if someone was sick, pregnant, caring for a newborn or providing urgent care for a family member.
• Changes the cap so each borrower can receive forgiveness for a maximum of five years total (not five years per occupation).
• Sets rules for who counts as working in these occupations. Where provinces or territories regulate an occupation, the federal rules defer to those local definitions. Because personal support worker is not regulated anywhere, the proposed regulations create a federal definition for that role.
• Uses the existing definition of an eligible community: a population centre of no more than 30,000 people or a rural area. Some previously eligible “legacy” communities are treated differently and will not automatically be eligible for the newly added occupations.
• Keeps the current practice that someone has 90 days after the end of their work year to apply for forgiveness.

Who's affected#

• Primary impact: federal student-loan borrowers who work (or choose to work) in the newly eligible occupations in small towns and remote communities.
• People living in those under-served rural or remote communities who need health, education, childcare, or social services.
• The federal government (the Canada Student Financial Assistance Program administered by Employment and Social Development) which would pay the expanded forgiveness amounts and handle more applications.
• Estimated scope and costs from the government analysis:
  • About 7,968 beneficiaries in the first year (2025–26), rising to about 19,025 per year by 2034–35.
  • Over 10 years, an estimated 27,822 professionals would be incentivized to move to or work in rural/remote areas because of the program change.
  • The analysis forecasts total monetized benefits of $944.1 million, costs of $653.8 million, and a net present value of $290.3 million over 10 years.
• Provincial and territorial governments and local employers may notice workforce shifts; Quebec, Nunavut and the Northwest Territories administer their own student-aid programs but individuals who took federal loans can still be eligible for this federal forgiveness if they work in those jurisdictions.

Why it matters#

• It aims to encourage more health, social service and education workers to go to small towns and remote communities by reducing their student debt. That can mean better local access to doctors, nurses, dentists, teachers, childcare and social supports.
• Adding early childhood educators is expected to increase child-care spaces in rural areas, which could help parents (especially women) return to work and raise household incomes locally.
• The government’s analysis projects a net financial benefit to taxpayers over 10 years, but it also increases federal spending on loan forgiveness and on processing applications.
• Many of the occupations targeted are female-dominated, so the change may have disproportionate benefits for women borrowers and for services they provide in communities that currently lack enough providers.