Canada Student Financial Assistance Program annual report 2022 to 2023

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 and afford post-secondary education. It also offers repayment assistance to borrowers with financial difficulty.

Program results

The following are key highlights and results of the CSFA Program in the 2022 to 2023 academic year.

A. Canada Student Grants

In 2022 to 2023, nearly 558,000 students received $3.5 billion in financial assistance they will not have to pay back. This represents an increase of 3% in the number of recipients, and an increase of 8% in the value of grants relative to the previous academic year. Select grants continue to be temporarily doubled until the end of the 2022 to 2023 academic year.

CSGs provide non-repayable funding to full- and part-time students and are targeted to students from low- and middle-income families, students with 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 2022 to 2023, 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 disability)
• CSG for students with disabilities: $4,000 per academic year for full- and part-time students with permanent or persistent or prolonged disabilities
• CSG for services and equipment for students with 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 CSFA Program also provides the Skills Boost Top-up grant of $1,600 to eligible recipients of the CSG for Full-Time Students. This top-up is intended for adult learners from low- and middle-income families who have been out of high school for at least 10 years. Initially introduced in the 2018 to 2019 academic year as a temporary measure, the Skills Boost adult learner top-up grant was extended for an additional 2 years through Budget 2021, until July 31, 2023.

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 recipients^*

Canada Student Grant	2020 to 2021	2021 to 2022	2022 to 2023
For Full-Time students	471,826	470,663	481,165
For Skills Boost Top-up	82,784	94,138	113,884
For Full-Time Students with Dependants	80,930	89,140	101,904
For Full-Time Students with Disabilities	52,519	57,873	67,166
For Services and Equipment for Full-Time Students with Disabilities	9,597	10,342	12,584
For Part-Time Students	40,902	39,501	41,145
For Part-Time Students with Dependants	2,020	2,485	2,604
For Part-Time Students with Disabilities	2,115	2,361	2,642
For Services and Equipment for Part-Time Students with Disabilities	443	452	498
Total	541,777	544,055	557,684

• ^*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.

Table 1B: Canada Student Grants – Millions of dollars

Canada Student Grant	2020 to 2021	2021 to 2022	2022 to 2023
For Full‑Time Students	2,365.1	2,338.6	2,434.6
For Skills Boost Top-up	127.1	143.5	177.3
For Full-Time Students with Dependants	377.5	431.5	515.2
For Full-Time Students with Disabilities	200.7	221.5	258.7
For Services and Equipment for Full-Time Students with Disabilities	26.6	28.5	35.4
For Part-Time Students	78.6	79.1	84.0
For Part-Time Students with Dependants	2.2	2.9	3.2
For Part-Time Students with Disabilities	8.4	9.3	10.4
For Services and Equipment for Part-Time Students with Disabilities	1.4	1.3	1.5
Total	3,187.5	3,256.2	3,520.3

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	6,143	40.9
Prince Edward Island	2,691	16.0
Nova Scotia	14,753	99.7
New Brunswick	9,538	57.8
Ontario	321,520	1,868.8
Manitoba	14,770	90.2
Saskatchewan	19,318	131.9
Alberta	116,637	909.6
British Columbia	52,065	303.8
Yukon	249	1.7
Total	557,684	3,520.3

C. Loan repayment, assistance, and forgiveness

As of April 2023, the CSFA Program no longer charges interest on federal student loans, making student loan repayment more affordable for all borrowers in repayment. This measure follows the temporary elimination of interest accrual on student loans, from April 2021 to March 2023.

Following the end of their studies, borrowers enter a 6-month non-repayment period, wherein they are not required to make payments on their CSLs. 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).

Prior to the permanent elimination of interest, the Government of Canada temporarily eliminated interest on the repayment of CSLs and CALs, between April 2021 and March 2023. Borrowers continue to be responsible to pay any interest that may have accrued on their federal student loans prior to the measures to eliminate interest.

The average CSL balance at the time of leaving school was $15,091 for the 2022 to 2023 academic year. This represents an 3% decrease 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 2022 to 2023 academic year, the average loan balance of university students was $18,704, compared to the average loan balance of college students at $11,107, and those attending private institutions at $13,818.

Repayment Assistance Plan

Approximately 283,000 student loan borrowers received support under the Repayment Assistance Plan (RAP) in the 2022 to 2023 academic year, which is similar to the previous academic year. Significant enhancements were made to RAP in the 2022 to 2023 academic year in order to make repayment more affordable for borrowers who need assistance repaying their loans.

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. To remain on RAP, borrowers must re-apply every 6 months.

In November 2022, the CSFA Program implemented significant changes to expand RAP eligibility and support repayment affordability. The new RAP enhancements significantly increased the income thresholds for eligibility. Income thresholds are adjusted upwards based on family size and indexed to inflation annually, accounting for annual cost of living and wage increases. For example, a single borrower does not have to repay their CSL until their earnings reach a minimum threshold of at least $40,000 per year (for academic year 2022 to 2023), a significant increase from the previous threshold of $25,000. For a family of 4, no payment is required until they earn at least $66,360 (previously this threshold was $59,512).

Furthermore, for borrowers on RAP with a reduced affordable payment, their monthly required payment has been capped at 10% of their monthly family income, compared to the previous requirement to cap at 20% of monthly family income.

During the first 5 years on RAP (RAP Stage 1), no borrower has to repay their CSL until they are earning at least $40,000 per year (2022 to 2023 threshold); this income threshold is adjusted upward based on family size. For those with an income over this threshold, they could be eligible for a reduced affordable payment. For borrowers with longer-term financial difficulty (beyond 5 years), the Government begins to contribute towards the principal (RAP Stage 2) such that the loan is fully paid off 15 years after leaving school. If a borrower has not defaulted on a loan and they have already spent at least 10 years in repayment when they first apply for RAP, they immediately enter Stage 2 and the Government contributes to 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 Disabilities (RAP-D). For borrowers eligible for RAP-D, the Government pays the 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-D. 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 2022 to 2023.

Figure 2 – Text version

Province or territory	All Stages	Stage 1	Stage 2	Disability (D)
Newfoundland and Labrador	3,963	2,481	944	538
Prince Edward Island	1,388	885	x	x
Nova Scotia	13,109	8,258	2,875	1,976
New Brunswick	11,030	7,123	3,073	834
Ontario	160,029	108,828	34,444	16,757
Manitoba	4,490	3,466	650	374
Saskatchewan	7,910	5,907	848	1,155
Alberta	49,763	40,784	5,337	3,642
British Columbia	30,968	20,608	7,301	3,059
Yukon	66	52	x	x
Total	282,716	198,392	55,815	28,509

• 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 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 any impairment, including a physical, mental, intellectual, cognitive, learning, communication or sensory impairment - or a functional limitation - that prevents a person from performing the daily activities necessary to participate in the labour force in a manner that is substantially gainful, as defined in section 68.1 of the Canada Pension Plan Regulations, and is expected to remain with the person for their expected life.

In the 2022 to 2023 academic year, 479 borrowers were forgiven an average amount of $15,765 in CSLs under this measure, for a total of $7.6^{Footnote 1} million. This represents a 4% increase in the number of borrowers and a 9% decrease in total CSLs forgiven 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 2022 to 2023 fiscal year, almost 5,600 health care professionals working in various under-served rural and remote communities received an average of $4,757 of CSL forgiveness for a total of $26.5 million. This represents a 4% increase in the number of recipients and a 6% increase in total CSL forgiveness, 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 6 integrated provinces (British Columbia, Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador, and the newly integrated Manitoba) as a single, integrated loan. The Government of Canada and the Government of Manitoba fully completed Manitoba's integration in July 2023, meaning all of Manitoba's new and existing borrowers now benefit from the use of a single point of service. 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 2024, these jurisdictions received $1,138.0 million based on expenses and revenues from the 2022 to 2023 academic year, as follows:

• Quebec received $1,123.3 million - an increase of $137.0 million from the last payment of $986.3 million
• Nunavut received $7.6 million - an increase of $1.0 million from the last payment of $6.6 million
• the Northwest Territories received $7.1 million - an increase of $0.8 million from the last payment of $6.3 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 2022 to 2023. 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 2022 to 2023 academic year, 75.6% 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 more than 1.9 million active recipients, its value as of July 31, 2023, was $23.8 billion, representing a 1% 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 2022 to 2023 is that of borrowers who entered repayment during the 2020 to 2021 academic year.

As noted in the following table, the default rate has been reduced by half by over the last decade, from 14% in 2010 to 2011, to 7% in 2020 to 2021. 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, increase in 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.

For the 2022 to 2023 academic year, the Government of Canada's RAP expenses represented 1.3% of the loan principal in repayment.

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

• ^*Revised

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 (CRA) 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 2022 to 2023 academic year, 7,573 borrowers rehabilitated a total of $98.1 million in CSLs. This represents a 24.1% increase in the total number of rehabilitated borrowers and a 17.5% 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 CRA. Prior to recommending CSLs for write-off, the CRA's comprehensive collections model to recover Crown debt focuses on 4 distinct activities: contacting the debtor via telephone; contact tracing to locate debtors and sources of revenue for collection; collection activities; and legal action. 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 2022 to 2023 for directly financed student loans was $220.6 million. This value is higher than the 2021 to 2022 write-off value of $168.8 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. In most cases, 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:

• losses of public money due to fraud or misrepresentation are reported in the Public Accounts of Canada on a fiscal year basis. For the academic year 2022 to 2023, the CSFA Program identified 131 cases, of which 113 were due to identity theft where an individual used another person's information to obtain funds. The remaining 18 cases involved individuals who misrepresented themselves to obtain student financial assistance. For these cases, administrative measures were imposed. Administrative measures can include restricting an individual from receiving student financial assistance for a specified period, requiring them to immediately repay any money obtained as a result of false information and converting grants to repayable loans. If warranted, further action may be taken such as criminal investigation or civil litigation
• 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 (2023) (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 students to receive student financial assistance while attending the educational institution. 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 2023 repayment rate for borrowers who entered repayment in 2021 to 2022 was 91.9%. This means that 91.9% of the total loans to students who entered repayment in the 2021 to 2022 academic year have been repaid or are being repaid on time and those accounts are in good standing. This is one of the highest repayment rates that the CSFA Program has recorded since direct loans were introduced in 2000
• starting in February 2023, the CSFA Program, provinces and territories instituted a federal-provincial-territorial Sub Committee on Fraud and Integrity aimed at rapidly informing members of potential and confirmed fraud attempts, as well as identifying integrity gaps and mitigation strategies to identify and deter fraud attempts

Support for apprentices

The Canada Apprentice Loan (CAL) provides financial support to apprentices in listed 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. As of April 1, 2023, CALs are permanently interest-free. Apprentices are not required to start repaying their CAL until 6 months after they end their apprenticeship, as long as their registration in a Red Seal Trade apprenticeship program is confirmed every 12 months. Apprentice loans can be payment free for up to 6 years to give borrowers time to complete their apprenticeship program. 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 September 2023, Quebec received $3.3 million based on expenses and revenues from the 2022 to 2023 fiscal year.

In the 2022 to 2023 academic year, CALs amounting to $39.3 million were disbursed to 9,400 apprentices. This represents a 14% increase in total CALs disbursed and 15% increase of the number of apprentices, as compared to the previous year. Most disbursed apprenticeship loans (78%) went to apprentices from 3 provinces: Alberta (34%), British Columbia (26%) and Ontario (18%).

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 (branded as the 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 portfolio*

• ^*This is not a financial statement. This table shows the direct loan portfolio related expenses and interest received on student loans in repayment on a fiscal year basis (April 1 to March 31).
• ^**This line item represents the interest portion of payments received on certain direct loans in collection accrued before September 2020.

• ^***Payments made to non-participating jurisdictions to support them with their own student financial assistance program. Payments are reported in the year in which they were received by non-participating jurisdictions.
• ^****Amounts are different than those in Table 6 because they are presented on a fiscal year basis rather than an academic year basis.
• ^*****Previous amounts were adjusted to conform to the current year's presentation.

• ^******Estimated cost to fund Canada Student Loans reported by the Department of Finance.
• ^*******These are costs incurred by the Canada Revenue Agency to collect on loans in default.

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