Canada Student Financial Assistance Program annual report 2021 to 2022

Employment and Social Development Canada

The mission of Employment and Social Development Canada (ESDC), including the Labour Program and Service Canada, is to build a stronger and more inclusive Canada, to help Canadians live productive and rewarding lives and to improve Canadians' quality of life.

Canada Student Financial Assistance Program

The CSFA Program provides targeted grants and needs based loans to help students access post-secondary education. It also offers repayment assistance to borrowers with financial difficulty.

Skills Boost and opportunities for Canada’s youth (2019 to 2021)

In Budget 2017, the 3-year Skills Boost pilot project was introduced, to help adults afford the cost of returning to school to upgrade their skills. This measure, implemented in 2018 to 2019, includes a $1,600 top-up to the full-time CSG for students who have been out of high school for at least 10 years, as well as flexibility to assess a student’s eligibility for CSGs based on current (instead of previous) year’s income for applicants whose financial circumstances have changed significantly.

In Budget 2021, the Government announced that it would extend the Skills Boost adult top-up grant funding for 2 years (until July 31, 2023) and make permanent the flexibility to assess a student’s eligibility for CSGs based on current (instead of previous) year’s income.

Program results

The following are key highlights and results of the CSFA Program in the 2021 to 2022 academic year.

A. Canada Student Grants

In 2021 to 2022, 544,000 students received $3.3 billion in financial assistance they will not have to pay back. This represents an increase of 0.4% in the number of recipients, and an increase of 2.2% in the value of grants relative to the previous academic year. Currently, select grants continue to be temporarily doubled until academic year 2022 to 2023.

CSGs provide non-repayable funding to full- and part-time students and are targeted to students from low- and middle-income families, students with permanent disabilities, and those with dependants. Students are automatically assessed for CSGs when applying for student financial assistance through their province or territory of residence.

In 2021 to 2022, the CSFA Program provided the following grants to eligible students:

• CSG for Full-Time Students: up to $750 per month of study ($6,000 for an 8-month study period)
• CSG for Full-Time Students with Dependants: up to $400 per month of study ($3,200 for an 8-month study period) for each dependant under 12 years of age (and for each dependant over 12 years of age with a permanent disability)
• CSG for Students with Permanent Disabilities: $4,000 per academic year for full- and part-time students with permanent disabilities
• CSG for Services and Equipment for Students with Permanent Disabilities: up to $20,000 per academic year to cover exceptional education-related costs
• CSG for Part-Time Students: up to $3,600 per academic year
• CSG for Part-Time Students with Dependants: up to a maximum of $3,840 per academic year

The following table provides a summary of the distribution of Canada Students Grants by type.

Table 1:  Canada Student Grants by type

Table 1A:  Canada Student Grants – Number of recipients¹

Canada Student Grant	2019 to 2020	2020 to 2021	2021 to 2022
For full-time students	467,805	471,826	470,663
For Skills Boost Top-up2	70,615	82,784	94,138
For Full-Time Students with Dependants	67,773	80,930	89,140
For Full-Time Students with Permanent Disabilities	50,773	52,519	57,873
For Services and Equipment for Full-Time Students with Permanent Disabilities	10,437	9,597	10,342
For Part-Time Students	36,374	40,902	39,501
For Part-Time Students with Dependants	3,158	2,020	2,485
For Part-Time Students with Permanent Disabilities	1,848	2,115	2,361
For Services and Equipment for Part-Time Students with Permanent Disabilities	484	443	452
Total	528,079	541,777	544,055

Table 1B:  Canada Student Grants – Millions of dollars

Canada Student Grant	2019 to 2020	2020 to 2021	2021 to 2022
For Full-Time Students	1,180.9	2,365.1	2,338.6
For Skills Boost Top-up2	107.5	127.1	143.5
For Full-Time Students with Dependants	160.0	377.5	431.5
For Full-Time Students with Permanent Disabilities	97.5	200.7	221.5
For Services and Equipment for Full-Time Students with Permanent Disabilities	27.1	26.6	28.5
For Part-Time Students	54.5	78.6	79.1
For Part-Time Students with Dependants	2.3	2.2	2.9
For Part-Time Students with Permanent Disabilities	3.7	8.4	9.3
For Services and Equipment for Part-Time Students with Permanent Disabilities	1.3	1.4	1.3
Total	1,634.8	3,187.5	3,256.2

• ¹ Students can receive multiple grants but are only counted as 1 recipient in the total number of recipients. Therefore, the total is smaller than the sum of all recipients.
• ² The Skills Boost Top-up to the CSG for Full-Time Students was temporarily introduced in the 2018 to 2019 academic year and is intended for adult learners from low- and middle-income families who have been out of high school for at least 10 years.

The following figure shows the distribution of CSGs for full- and part-time students by province or territory.

Figure 1 – Text version

Province or territory	Number of recipients	Millions of dollars
Newfoundland and Labrador	5,841	38.1
Prince Edward Island	2,693	15.6
Nova Scotia	14,684	96.7
New Brunswick	9,785	58.7
Ontario	325,043	1,828.5
Manitoba	13,976	83.1
Saskatchewan	19,028	126.0
Alberta	100,407	707.9
British Columbia	52,341	300.0
Yukon	257	1.6
Total	544,055	3,256.2

C. Loan repayment, assistance, and forgiveness

Unlike traditional loans, CSLs do not accrue interest while borrowers are in school. Following the end of their studies, borrowers enter a 6-month non-repayment period, wherein they are not required to make payments and do not accrue interest on their CSLs. Before April 2021, interest started to accrue once the 6-month non-repayment period had elapsed. In April 2021, the Government of Canada temporarily eliminated interest on the repayment of CSLs and CALs.

Borrowers repay their loans through monthly required payments, typically over a 114-month period (9.5 years). Depending on their financial situation, borrowers may revise their repayment terms to pay more quickly or extend their repayment period by reducing their monthly payments (up to a maximum of 14.5 years).

The average CSL balance at the time of leaving school was $15,578 for the 2021 to 2022 academic year. This represents an 8% increase compared to the previous year.

Differences in loan balances reflect each student’s particular situation. Loan balances are measured at the time of leaving school, which includes students who graduate as well as those who do not complete their program of study. Among the key factors attributed to differences are the type and location of the post-secondary education institution, and the program of study. In the 2021 to 2022 academic year, the average loan balance of university students was $19,109, higher than that of college students at $11,797, and those attending private institutions at $14,506.

Repayment Assistance Plan

Approximately 285,000 student loan borrowers received support under the Repayment Assistance Plan (RAP) in the 2021 to 2022 academic year, which represents a decrease of 8% from the previous academic year.

RAP is available to help borrowers who experience difficulty in repaying their student loans.

Under RAP, a single borrower does not have to repay their CSL until their earnings reach a minimum threshold of at least $25,000 per year. This income threshold is adjusted based on family size, meaning that for a family of 4, no payment is required until they earn at least $59,512. Through this RAP option, their monthly required payment is also capped at 20% of their monthly family income. To remain on RAP, borrowers must re-apply every 6 months. Budget 2021 announced several enhancements to RAP, for implementation in November 2022. These changes will be reflected in the 2022 to 2023 CSFA Program Annual Report.

RAP offers different benefits depending on whether borrowers need short-term assistance soon after entering repayment or longer-term assistance after multiple years in repayment.

For the first 5 years on RAP (RAP Stage 1), the Government of Canada pays the interest not covered by a borrower’s monthly payment on their CSL. For borrowers with longer-term financial difficulty (beyond 5 years), the Government begins to contribute towards both the principal and interest (RAP Stage 2) such that the loan is fully paid off 15 years after leaving school. If a borrower has always had a loan in good standing and they have already spent at least 10 years in repayment when they first apply for RAP, they immediately enter Stage 2; that is, the Government contributes to both interest and principal payments. However, if a borrower had previously defaulted on their loan, these timelines are reset to when the loan was brought back into good standing.

There is also the Repayment Assistance Plan for Borrowers with a Permanent Disability (RAP-PD). For borrowers eligible for RAP-PD, the Government pays both the interest and principal not covered by the monthly affordable payments, such that the loan is paid off 10 years after the completion of studies, for those who remain on RAP-PD. In addition, disability-related expenses are taken into account in the eligibility assessment, which may further reduce the individual’s monthly payments.

The following figure provides a summary of the number of RAP recipients by RAP stage and payment type in 2021 to 2022.

Figure 2 – Text version

Province or territory	All Stages	Stage 1	Stage 2	Permanent Disability (PD)
Newfoundland and Labrador	4,020	2,559	1,042	419
Prince Edward Island	1,434	923	x	x
Nova Scotia	13,104	8,547	2,873	1,684
New Brunswick	11,688	7,568	3,307	813
Ontario	166,675	115,161	35,054	16,460
Manitoba	3,963	2,997	636	330
Saskatchewan	6,848	5,057	858	933
Alberta	45,610	37,988	4,681	2,941
British Columbia	31,629	21,223	7,721	2,685
Yukon	60	47	x	x
Total	285,031	202,070	56,534	26,427

x Denotes values that are suppressed to prevent statistical disclosure of number of recipients greater than 0 but less than 10.

Severe Permanent Disability Benefit

In very particular cases, borrowers with a severe permanent disability may be eligible for loan forgiveness. The Severe Permanent Disability Benefit makes it possible to cancel the repayment obligations of borrowers who have a severe permanent disability.

In order to determine eligibility, a medical assessment must be completed by a physician or nurse practitioner stating that the borrower suffers from a severe permanent disability. This is defined as a functional limitation caused by a physical or mental impairment that prevents a borrower from performing the daily activities necessary to participate in substantially gainful employment and is expected to remain with the person for life.

In the 2021 to 2022 academic year, 461 borrowers were forgiven an average amount of $15,003 in CSLs under this measure, for a total of $6.9^{Footnote 1} million. This represents a 9% decrease in the number of borrowers and a 13% decrease in total CSLs forgiven as compared to the previous year.

Loan forgiveness for family doctors and nurses

The Government of Canada offers CSL forgiveness for eligible family doctors, residents in family medicine, nurse practitioners, and nurses who work in under-served rural or remote communities. This benefit is aimed at increasing health care services across Canada.

Family doctors or residents in family medicine may receive up to $40,000 in CSL forgiveness over a maximum of 5 years ($8,000 per year), and nurse practitioners and nurses may receive up to $20,000 in loan forgiveness over a maximum of 5 years ($4,000 per year).

In the 2021 to 2022 fiscal year, almost 5,400 health care professionals working in various under-served rural and remote communities received an average of $4,678 of CSL forgiveness for a total of $25.1 million. This represents a 22% increase in the number of recipients and a 27% increase in total CSL forgiveness, as compared to the previous year.

Working with partners

The CSFA Program works collaboratively with provincial and territorial governments to deliver student financial assistance to eligible students. In participating provinces and territories, approximately 60% of a full-time student’s assessed financial need is funded by the Government of Canada, while the province or territory covers the remaining 40%.

A private-sector service provider, contracted by the Government of Canada, and branded as the National Student Loans Service Centre (NSLSC), administers federal grant and loan disbursement as well as federal loan repayment. The NSLSC administers federal and provincial student aid in 5 integrated provinces (British Columbia, Saskatchewan, Ontario, New Brunswick and Newfoundland and Labrador) as a single, integrated loan. Manitoba is currently in the process of being integrated, with the first phase of integration completed as of July 1, 2022.  Manitoba’s integration process is expected to be completed in 2023. Provinces and territories that have not integrated their program administration with the CSFA Program manage the provincial/territorial portion of financial assistance themselves.

In support of their own student aid programs, the 3 non-participating jurisdictions (Quebec, Nunavut, and the Northwest Territories) receive alternative payments each year according to the CSFA Program’s expenses and revenues from the previous year. In January 2023, these jurisdictions received $999.2 million based on expenses and revenues from the 2021 to 2022 academic year, as follows:

• Quebec received $986.3 million – an increase of $70.5 million from the last payment of $915.8 million
• Nunavut received $6.6 million – an increase of $0.7 million from the last payment of $5.9 million
• the Northwest Territories received $6.3 million – an increase of $0.6 million from the last payment of $5.7 million

Service modernization

The Government of Canada is committed to the continuous improvement of the CSFA Program for the benefit of students. In order to respond to the expectations of Canadians with respect to e-services, the Government introduced a series of enhancements to online services for students in academic year 2021 to 2022. These enhancements helped to advance the CSFA Program's progress towards a digital-first service delivery model. In collaboration with the service provider and provincial and territorial partners, the CSFA Program will continue these efforts to provide students with additional digital self-service options.

Below is an overview of recent achievements and planned improvements to enhance the service experience of students.

Client satisfaction

The CSFA Program is committed to ensuring that clients receive quality service. An annual client satisfaction survey assesses clients’ satisfaction with services related to their grants and loans. Overall, satisfaction levels remained high over the past number of years. In the 2021 to 2022 academic year, the CSFA Program fully transitioned from a phone survey to an online survey to better reflect the digital-first service delivery method offered to clients through their NSLSC account. The average results showed that 81.2% of clients were satisfied with the quality of service they received from the NSLSC.

Portfolio performance

The CSFA Program’s direct loan portfolio includes the balance of outstanding loans (in-study and in-repayment) and the balance of loans in default. With 1.9 million active recipients, its value as of July 31, 2022, was $23.5 billion, representing a 2% increase as compared to the previous year. The CSFA Program works with the service provider to minimize the number of loans going into default. Although most students repay their loans in full and on time, some borrowers experience difficulty in repayment. A loan is deemed in default when in arrears for more than 270 days (roughly equivalent to missing 9 monthly payments).

The CSFA Program uses a 3-year default rate as the main indicator of the portfolio performance. This rate compares the value of loans that enter repayment in a given academic year and default within 3 years to the value of all loans that entered repayment in that academic year. As such, the most recent 3-year default rate available in academic year 2021 to 2022 is that of borrowers who entered repayment during the 2019 to 2020 academic year.

As noted in the following table, the default rate has decreased by 8 percentage points over the last decade, from 15% in 2009 to 2010, to its new all-time low of 7% in 2019 to 2020. The introduction of grants and RAP, coupled with increased and targeted communications by the service provider, have helped a greater number of students manage their repayment obligations, leading to a lower default rate. Furthermore, major enhancements in student financial supports in recent years (for example, doubling of grants and interest waiver on CSLs) have all contributed to the improvement in repayment outcomes.

RAP expense

RAP is a benefit provided by the Government of Canada to help borrowers who experience difficulty in repaying their student loans. To measure the total amount of support the Government provides through RAP in a given year, the CSFA Program has developed a RAP expense indicator. This indicator measures the amount of principal repaid by the Government of Canada through RAP in a given year, as a percentage of the total loan principal in repayment during the same year.

The following table provides a summary of the Government of Canada’s yearly expenses in providing RAP as a support benefit.

For the 2021 to 2022 academic year, the Government of Canada’s RAP expenses represented 1.3% of the loan principal in repayment.

Loan rehabilitation

The CSFA Program offers loan rehabilitation as a way for borrowers to bring their defaulted loans back into good standing. Borrowers can rehabilitate their defaulted loans by paying the equivalent of 2 regular monthly payments plus their outstanding interest. Borrowers also have the 1-time option to capitalize the interest owing on their student loans, and moving the outstanding balance to their loan principal. If they choose to exercise this option, they would still have to make an equivalent payment of 2 regular monthly payments. The CSFA Program works closely with the Canada Revenue Agency to raise awareness of loan rehabilitation. Loan rehabilitation helps borrowers by making them eligible for RAP or additional grants and loans to continue their studies.

During the 2021 to 2022 academic year, 6,103 borrowers rehabilitated a total of $83.5 million in CSLs. This represents a 20% increase in the total number of rehabilitated borrowers and a 26% increase in the value of rehabilitated CSLs, as compared to the previous year.

Loan write-off

The Government of Canada writes off some CSLs from the Public Accounts on an annual basis. This includes loans deemed unrecoverable after all reasonable collection efforts are undertaken by the Program and the Canada Revenue Agency. The majority of the write-off dollar-value is attributed to loans that have not been acknowledged or for which no payment has been received, and have subsequently reached the 6-year statute of limitations. Other reasons for write-off include bankruptcy, financial hardship, compromise settlements, and low dollar-value balances remaining on the account (less than $20).

The total amount written-off in 2021 to 2022 for directly financed student loans was $168.8 million. This value is lower than the 2020 to 2021 write-off value of $185.5 million, and represents less than 1% of the directly financed student loan portfolio. The write-off of any debt does not mean the debt is forgiven. Should an individual who had their student loan written-off wish to access student financial assistance from the CSFA Program in the future, the debt must be repaid in full. In a situation where a CSL debt is reinstated after write-off, any interest charges that accrued on the debt are also reinstated.

Program integrity

The CSFA Program strives to safeguard the integrity of the Program by ensuring that all aspects of the Program are operating within the legal framework of the Canada Student Financial Assistance Act and the Canada Student Loans Act.

The CSFA Program has in place a number of policies and activities designed to ensure its integrity and to enhance governance and accountability:

• administrative measures may be imposed when individuals knowingly misrepresent themselves to obtain student financial assistance. These can include being restricted from receiving student financial assistance for a specified period, being required to immediately repay any money obtained as a result of false information and having their grants converted to repayable loans. If warranted, further action may be taken such as criminal investigation or civil litigation. In the 2021 to 2022 academic year, 17 cases of misrepresentation resulted in administrative measures being imposed
• in keeping with provisions of the Canada Student Financial Assistance Act, the Office of the Chief Actuary conducts a statutory actuarial review of the Program in order to provide a long-term forecast of the portfolio and program costs. The most recent Actuarial Report (2022) (PDF format) is available on the website of the Office of the Superintendent of Financial Institutions
• the Designation Policy Framework establishes Canada-wide criteria for designation, the process whereby post-secondary educational institutions are deemed eligible for student financial assistance programs. The Framework ensures that federal, provincial and territorial student financial assistance portfolios operate within the principles and practices of reasonable financial stewardship. As a part of this framework, the CSFA Program calculates and tracks the repayment rates of CSLs for designated Canadian institutions. The 2022 repayment rate for borrowers who entered repayment in 2020 to 2021 was 92.6%. This means that 92.6% of the total loans to students who entered repayment in the 2020-2021 academic year have been repaid or are being repaid on time and those accounts are in good standing. This is the highest repayment rate (and the lowest default rate – consult Table 5) that the CSFA Program has recorded since direct loans were introduced in 2000

Support for apprentices

The Canada Apprentice Loan (CAL) provides financial support to apprentices in Red Seal trades during periods of technical training. This helps them complete their apprenticeship and encourages more Canadians to consider a career in the skilled trades.

Eligible apprentices may apply for loans of up to $4,000 per period of technical training, for a maximum of 5 periods. The loans are interest-free for up to 6 years as long as borrowers are confirmed as being registered in a Red Seal Trade apprenticeship program and no loan payment is due during this period. Given the timing of technical training requirements in their province, apprentices in Quebec do not qualify for CAL. Instead, Quebec receives an annual special payment.

In the 2021 to 2022 academic year, CALs amounting to $34.4 million were disbursed to 8,249 apprentices. This represents a 0.5% increase in total CALs disbursed and 3% increase of the number of apprentices, as compared to the previous year. Most disbursed apprenticeship loans (80%) went to apprentices from 3 provinces: Alberta (37%), British Columbia (26%) and Ontario (17%).

Consolidated report on the Canada Student Financial Assistance Program

Since 2000, the Government of Canada has provided student financial assistance directly to borrowers. Prior to 2000, Program lending regimes were administered by financial institutions. Under direct lending, the Government of Canada finances and administers the CSFA Program, contracting with a private-sector service provider (NSLSC) to manage student loan accounts from disbursement to repayment.

Reporting entity

The entity detailed in this report is the CSFA Program only and does not include departmental operations related to the delivery of the CSFA Program. Expenditure figures are primarily statutory in nature, made under the authority of the Canada Student Financial Assistance Act and the Canada Student Loans Act. Information in Table 7 is reported on a fiscal year basis (April 1 to March 31), rather than on an academic year basis (August 1 to July 31).

Table 7: Direct loan portfolio¹

• ¹ This table shows the direct loan portfolio related expenses and interest received from student loans in repayment on a fiscal year basis (April 1 to March 31). This is not a financial statement.
• ² This line item represents the interest portion of payments received on direct loans.

• ³ Payments made to non-participating jurisdictions to support them with their own student loan program. Payments are reported in the year in which they were received by non-participating jurisdictions.
• ⁴ Amounts are different than those in Table 6 because they are presented on a fiscal year basis rather than an academic year basis.

• ⁵ Estimated cost to fund CSLs reported by the Department of Finance.
• ⁶ These are costs incurred by the Canada Revenue Agency to collect on loans in default.

• ⁷ CSFA Program delivery expenses include portfolio management, third-party administration, audit, actuarial and survey fees.