Higher RAP zero-payment thresholds

Summary#

These are the final rules titled Regulations Amending the Canada Student Financial Assistance Regulations and the Apprentice Loans Regulations: SOR/2022-141. They raise who can make zero loan payments under the Repayment Assistance Plan (RAP), cut the maximum affordable payment, and add technical changes to line up apprentice loan rules with the two‑year interest waiver. Most of the repayment changes take effect on November 1, 2022; some technical fixes came into force on registration (June 21, 2022).

What it does#

• Increases the RAP “zero payment” threshold for a borrower living alone from $25,000 to $40,000 per year.
• Aligns zero payment thresholds for larger families with the thresholds used for Canada Student Grants for Full‑Time Students. The new monthly thresholds (Schedule amounts) are:
  • Family size 1: $3,334
  • Family size 2: $3,911
  • Family size 3: $4,790
  • Family size 4: $5,530
  • Family size 5: $6,183
  • Family size 6: $6,773
  • Family size 7 or more: $7,316
• Indexes those thresholds to inflation. Starting in 2023, they will be adjusted each August 1 by the annual change in the Consumer Price Index (published by Statistics Canada). If the calculated amount would be lower than the previous year’s threshold, no decrease is made.
• Lowers the cap on the monthly affordable payment for borrowers on RAP from 20% of family income to 10%.
• Updates the Apprentice Loans Regulations to add an “interest suspension period” definition and to make clear how timing rules (when repayments or restrictions start) work during the two‑year interest waiver (no interest accrual from April 1, 2021 to March 31, 2023).
• Timing:
  • Technical amendments tied to the interest waiver came into force on registration (June 21, 2022).
  • The main RAP changes come into force on November 1, 2022.

Who's affected#

• Student and apprentice loan borrowers across participating provinces and Yukon. The largest effects are for:
  • Single borrowers earning up to $40,000 a year.
  • Borrowers with families at the new family‑size thresholds listed above.
  • Borrowers already on or applying for RAP.
  • Borrowers with disabilities and low‑income or young borrowers, who are more likely to qualify under the higher thresholds.
• The National Student Loans Service Centre (NSLSC) and provincial/territorial student-aid administrators who operate RAP and adjust systems and communications.
• The federal government, which will pay more under RAP (estimated costs are provided in the regulatory analysis).
• Some provinces may choose not to match the new federal thresholds for the provincial portion of loans. That could mean different federal and provincial rules for some borrowers.

Why it matters#

• More borrowers will qualify to pay nothing on their federal student or apprentice loan. The higher thresholds and the move from a 20% cap to 10% mean lower monthly payments for many people.
• Indexing thresholds to inflation prevents the support level from shrinking over time as prices rise.
• The government estimates roughly 118,000 borrowers will get more affordable repayment in 2022–2023, growing to about 150,000 by 2031–2032. These are projections.
• The regulatory impact statement estimates a present‑value cost to the federal government of about $465 million over 10 years and monetized benefits (including reduced defaults) of about $582 million over 10 years. These are the government’s estimates and involve modelling assumptions.
• The apprentice loan wording fixes clarify how the earlier two‑year interest waiver affects repayment timing. That removes confusion for apprentices about when repayments, restrictions, or RAP periods begin during the interest‑free window.