A Parent’s Guide to Student Loans, RESPs, and Tax Implications

How much money can my child receive?

According to the federal government, it covers “approximately 60% of a student's assessed financial need, with provinces and territories providing the remaining amount.”

Here are some key figures (for the 2026–2027 school year), but keep in mind that what your child can get will be based on their assessed financial need, where they live, their school program, and the school's location. Student aid is designed to bridge the gap between the cost of education and what a student's family can afford, not to cover the entire cost. The student must also remain qualified to keep receiving grants and loans each year. 

• Federal grants: Full-time students, up to $4,200 per year; part-time students, up to $2,520 per year; full-time students with dependants, up to $2,240 per child, per year; part-time students with dependants, up to $2,688 per year; students with disabilities, $2,800 per year; services and equipment for students with disabilities, up to $20,000 per year.
• Federal loans: Loans for full-time students are provided up to the lesser of: 60% of their assessed financial need, or the weekly maximum of $300. Loans for part-time students have no weekly limit, but the total is capped at $10,000. (To estimate how much aid you could receive from the federal government, use its Student Aid Estimator tool.)
• Provincial and territorial loans: Up to approximately $200 to $300 per week. 
• Your province or territory may also offer additional grants, scholarships, and bursaries. 

How student loans work in Canada

Most Canadian students registered at a designated educational institution, including the majority of public colleges and universities, can apply for both federal and provincial/territorial student aid. 

One notable exception is private, for-profit international schools. As of 2026, students enrolled at these schools are no longer eligible for federal funding, although students who received aid in these programs may still qualify until mid-2029. 

Canada Student Financial Assistance Program

This federal program provides Canada Student Grants and Loans to students from low- and middle-income families, as well as students with dependants or disabilities. 

To simplify things, some provinces (B.C., Man., N.B., N.L, Ont., and Sask.) integrate these federal grants and loans with their own provincial grants and loans, while others (Alta., N.S., PEI, Y.T.) issue federal and provincial/territorial student aid separately.

Regardless of where you live, your child only needs to submit one application to be considered for both federal and provincial or territorial student aid programs of their home province or territory:

• Alberta Student Aid
• British Columbia Student Aid
• Manitoba Student Aid
• New Brunswick Student Financial Services
• Newfoundland and Labrador Student Aid
• Northwest Territories Student Financial Assistance*
• Nova Scotia Student Assistance
• Nunavut Student Funding*
• Ontario Student Assistance Program (OSAP)
• Prince Edward Island Student Financial Services
• Quebec Student Financial Aid*
• Saskatchewan Student Loans
• Yukon Student Financial Assistance

*Note that Canada Student Grants and Loans are not available to students from Quebec, Nunavut, and the Northwest Territories, as these jurisdictions have their own student aid programs.

Grant vs loan: What's the difference?

A grant is money awarded mainly based on financial need and doesn't need to be repaid, while a loan is borrowed money for tuition, living costs, and school expenses that must be paid back in the future. 

Your child is automatically assessed for both. Every grant dollar received is one less dollar they need to borrow.

Student loan repayment basics

Typically, student loan repayment begins 6 months after your child finishes their final term, drops to part-time studies, or leaves school. That half-year grace period (some provincial loans have different guidelines) is meant to allow them to find work first. 

More good news: many of the loans are interest-free. In April 2023, the federal government stopped charging interest on the Canada Student Loan portion, and some provincial student loans (including B.C., Man., N.B., N.L, and P.E.I.) are also interest-free.

If your child is struggling to pay off student loans because of low income or disability, the Repayment Assistance Plan may temporarily reduce or eliminate their payments. 

The Canada Student Loan Forgiveness program can also write off part of the loan for doctors, nurses, teachers, and other professionals who work in underserved or remote communities.

How financial need is determined

Whether your child qualifies for aid depends on financial need—a calculation that weighs their ability to pay against the total cost of attending school, including tuition and living expenses. 

For full-time students, if the total education and living expenses exceed available resources, the student may qualify for financial aid.

But exactly which resources work into the equation? Here's a rundown: 

• Household income: For a dependant student, parents' income sits at the centre of the assessment.
• Student income and savings: A student's earnings, savings, and scholarships count too.
• Family contributions: Parents are generally expected to contribute an amount scaled to income and family size.
• Assets, in some provinces: Rules differ sharply—for example, StudentAid BC weighs parents' assets like GICs and rental property, while OSAP counts the student's assets, including savings accounts, TFSAs, and trust funds, but not the parents'.

One notable exception: Having an RESP is not a factor in determining how much government financial aid a student can receive. However, keep in mind that RESP withdrawals categorized as Educational Assistance Payments (EAPs) count as taxable income, and that could affect a student's eligibility for financial aid in the next tax year. 

Also important to know: generally, if a student has been out of high school for several years or has worked full-time for two years, they may be classified as independent, meaning their eligibility is assessed on their own finances, with no parental contribution expected (although the rules vary by province). 

The same goes for married students and single parents, although in some cases, the spouse's income or assets will also be considered.

Family situations that affect student aid

Divorce, remarriage, shared custody, and guardianship all raise the same question: whose income counts? Usually, it comes down to who the student lives with or who supports them—not who's related to them on paper.

• Divorced, separated, or single parents: Generally, only one parent needs to provide their financial information in these situations. But determining which parent offers that support depends on the province. For example, in B.C., it's the parent who is the child's main financial supporter, while in Ontario, it's the parent with primary custody. If custody is shared evenly in Ontario, the parent the student currently lives with—or last lived with before moving away for school—should complete the parental finances section of the application.

• Remarried and blended families: If the parent completing the application has remarried or has a common-law partner, that partner's income is usually counted, too.

• Legal guardians: Where a guardian is the student's primary financial supporter, their income generally stands in for the parents' in the assessment.

Because the rules shift from province to province, Andronikova offers the following reassurance: “Don't assume a complicated family situation disqualifies you. The rules bend more than people expect, which is why, if you need financial support, it always pays to apply.”

Understanding grants and non-repayable assistance

Grants, scholarships, and other types of student funding that don't need to be repaid are the most coveted, for obvious reasons. There's more of this money around than you might realize:

Canada Student Grants

Dedicated federal grants are available for full- and part-time students, with or without dependants, and eligibility is income-tested by family size. 

Your child is automatically assessed for these grants when they apply for student aid through their province or territory. 

There are separate federal grants for students with disabilities, which require additional paperwork but can be applied for at the same time as other loans and grants.

Provincial grants

Provinces run their own grants too, often tied to local priorities. Ontario's Learn and Stay Grant, for example, covers tuition, fees, and books for students in certain in-demand programs in underserved and growing communities—on the condition they work in the region afterward. 

Check with your child's provincial/territorial student aid offices to find out what grants they provide.

Scholarships and bursaries

Scholarships and bursaries—awarded for merit, need, or both—can meaningfully cut costs for post-secondary students. Most colleges and universities offer their own scholarships and bursaries, and many high schools provide them for graduating students who continue their education. 

Also check databases like StudentAwards and ScholarshipsCanada.com, which offer a wide range of awards, from acupuncture and archaeology to wine studies and zoology. It pays to start looking early, since many deadlines fall well before the school year begins.

RESPs and other education savings

An RESP is a tax-sheltered account built specifically to save for a child's education—with free government money attached to it. The Canada Education Savings Grant (CESG) matches 20% of your contributions, up to $500 a year and a lifetime maximum of $7,200 per child (under age 18). 

Lower-income families can receive an additional top-up on the CESG and may also qualify for the Canada Learning Bond (CLB): up to $2,000 per child with no contributions required. 

As soon as your child is enrolled in an eligible post-secondary school and program, you can begin accessing the funds to pay for tuition, accommodation, books or any other expense related to their education. 

RESP withdrawals for student expenses arrive in two streams. Your original contributions, made with after-tax dollars, come back to you tax-free. 

The rest—CESG and CLB funds from the government, plus investment growth—is taxable, but in the student's hands. These taxable funds, called Educational Assistance Payments (EAPs), are reported as income on your child's return for the tax year in which the withdrawals are made. 

RESP withdrawals won't directly reduce the financial aid your child is eligible to receive. However, taking out sizable EAPs can increase a student's annual taxable income in a given tax year. 

And since student income is one of the factors considered in needs assessments for financial aid, EAPs may indirectly affect their eligibility in subsequent years. Take this into consideration when planning the timing and amount of annual EAP withdrawals.

Aside from RESPs, you might also consider tapping into the following sources for education funding:

• Tax-Free Savings Accounts (TFSA): Flexible and tax-free on withdrawal, though without the CESG match.
• Lifelong Learning Plan: As the student, it lets you withdraw funds from your Registered Retirement Savings Plan (RRSP) to finance your own or your spouse's education—but not for your child's—provided those funds are repaid over time.
• Personal loans or lines of credit: An option to fill funding gaps, but usually at a higher cost than government student loans, so weigh them carefully.

Education funding for students with disabilities

Students with disabilities can access extra, largely non-repayable support at both the federal and provincial levels—often enough to reduce or replace a loan.

Federally, the Canada Student Grant for Students with Disabilities provides an annual amount for each year of study, and a separate grant covers education-related services and equipment, such as specialized software or a note-taker. Both require an application, proof of need, and documentation of the disability.

Provinces layer on their own programs. Ontario's Bursary for Students with Disabilities, for example, covers supports not fully funded federally, and StudentAid BC offers an access grant that swaps loan dollars for non-repayable ones, plus funding for services and attendant care.

Tax considerations for families

The investment growth of the RESP, CESG, and CLB is taxable in the hands of the student, but not the principal amount. Come tax season, education costs open up several credits and deductions, and knowing who claims what can keep real money in the family. 

Tuition tax credits

Tuition paid to an eligible institution generates a federal tuition tax credit, which is reported on the T2202 form issued by the school. If the student doesn't need the full credit to reduce their own tax to zero, they can transfer part of it to a parent, grandparent, or spouse, or carry the unused amount forward to a future year.

Student loan interest credit

Interest paid on a government student loan is eligible for both a federal and provincial tax credit. (Interest on personal loans or lines of credit doesn't qualify.) If your child doesn't have any tax payable in the year that they paid the interest, they can carry forward the tax credits and claim unused amounts in any of the next five years.

Other credits and tax deductions

Students who move at least 40 kilometres closer to school may be able to deduct moving expenses against certain income. If they don't have sufficient income in the year of the move, the deduction will carry forward. For a fuller rundown, check out the ultimate tax guide for students.

Common misconceptions about student loans

A few myths cause families more worry than is warranted. Here's what you may have heard about student loans, and what's actually true.

• “Parents are automatically on the hook for the loan.” They're not. A Canada Student Loan is a contract between the student and the government; parents don't co-sign it and aren't responsible for repaying it. Of course, you can choose to help pay it down—many parents do—but it's not required. 
• “Loans cover everything.” Aid is capped and tied to assessed need, so it often falls short of the full cost of tuition, rent, and living. Grants, savings, and scholarships can help close the gap.
• “A higher income means no help at all.” Not necessarily. Because assessments account for family size, the number of children in school, and regional costs, middle-income families often qualify for more than they assume. Applying is the only sure way to find out.

Practical planning tips

A little groundwork goes a long way. Here are a few ways to smooth out the student funding process:

• Estimate costs early. Add up tuition, housing, and living expenses before applications open, so there are no surprises.
• Apply even if you're not sure you'll qualify. Assessments can be more generous than many people expect, and you can't receive what you don't apply for.
• Keep financial documents organized. Tax slips, income details, and RESP records all come into play—having them ready saves stress.
• Understand repayment before borrowing. Know the grace period, the interest rules where you live, and roughly what monthly payments will look like.

Remember, borrowing is only one part of paying for post-secondary education. Student grants, RESPs, scholarships, and a few well-timed tax claims can shrink what your child needs to borrow. The sooner you map out how they fit together, the more wiggle room you have to make it all work.

“The families who feel calmest about this aren't the ones with the most money,” says Andronikova. “They're the ones who started early and asked questions before the bills arrived.”