Canadian National Student Loans

If you are a Canadian student, and you are planning to attend college, you will most likely be interested in the Canadian National Student Loans program and how it works. Although this loan system may seem confusing at first glance, it is one of the best student loan systems in the world.

Created in 1964 by the Canada Student Loans Act, the Canada Student Loan Program was designed to make it possible for more of the population to obtain higher education. At that time, and until 1995, the Canada student loan program always involved private or independent financial institutions, and the government guaranteed the loans, although the government did not directly make the loans to students.

In 1995 the system changed. At that time, the lending institution shared the risk of the loan with the Canadian government, which meant that the loans were not fully guaranteed. In many cases, this made Canadian student loans harder to obtain, which in turn meant that fewer people were seeking higher education. Fortunately, this change did not last long, and the system changed again in 2000.

In 2000, the “National Student Loan Centre” was created, and the Canadian Government started making direct Canadian student loans, cutting out the need for loans from private financial institutions. However, even with this newly created system, it is still possible to get Canadian student loans from those private institutions, and many students elect to do this only after obtaining all of the financial aid possible from government sources to cover educational related expenses which have not yet been met.

While this greatly improved the system, this is also where things started to get a bit more confusing. The biggest confusion comes from the appearance that people in certain provinces or territories are not eligible for loans from the federal government. The fact is that they actually are eligible, but the Canadian federal government has partnered with those territories to provide funding for the student loan and grant programs in those areas. Additionally, in other territories, you can receive Canada student loans from the federal government and the government of your province.

To take away some of the confusion and complexity of Canadian national student loans, however, it is now possible to apply for federal and local government student loans using one application – which is obtained and submitted on the local level. In fact, one application is used to apply for federal and territorial or provincial grants, loans, and bursaries. When the loans are repaid, however, you may be making those payments to two different organizations, one of which is the “National Student Loan Centre”, if you obtained a federal loan.

Students do still seek private Canadian student loans to help finance their education. The attractive thing about these private loans is that they have no bearing on whether or not you are eligible for government loans as well. The unattractive thing about these loans is that the interest rate is usually slightly higher than the rate charged by the government and credit is considered for qualifying purposes opening the door for no cosigner student loans. Either way you have options for Canadian student aid.

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Also check with local Canada banks to find out what the interest rates are on their student loans, and what programs are available for student loans through those institutions – most banks have more than one Canada student loan program available, and you can select the program that works best for your personal situation.