What type of student loan do you have…


Note: This article refers to Canada Student Loans and some provincial loans. The dates given here do not apply to all loans given by the different provinces and regions. However, the terms are fairly standard across the country.  


 Different types of student loans can have different rules and lenders, so it's helpful to know which type you have.

Some people have more than one type of student loan, especially if they took any loans during the 1990s or went to school in different provinces.

To find out what types you have, compare the date on your loan consolidation with the dates for the loan types below. If you can't find your agreement, ask your lender.

Q. What is a guaranteed loan?

A. Student loans cashed in before August 1, 1995 are usually called guaranteed loans.

These loans were guaranteed by their lenders, which were federal and provincial governments.

Although this is also the case with today's direct-lend loans, these guaranteed loans were set up under student loans legislation. That means they're handled differently and have some differences in rules.

Q. What is a risk-shared loan?

A. Student loans cashed in between August 1, 1995 and July 31, 2000 are usually called risk-shared loans.

Most risk-shared loans were provided by one of three private banks (CIBC, Scotiabank, Royal Bank). The government shared their "risk" by paying interest charges and providing the banks with other benefits, including taking back a certain percentage of loans that defaulted.

Some rules and challenges are unique for risk-shared loans. For more on this, see these Debt 101 advice articles:

Do You Have a Risk-Shared Loan?

How to Protect Yourself If You Have Risk-Shared Loans

Q. What is a direct-lend loan?

A. Loans cashed after August 1, 2000 are usually called direct-lend (or direct) loans.

Federal and provincial governments lend direct-lend loans directly to students. In most provinces, students repay those governments indirectly now, through a student loan service centre.

Q. What is an integrated loan?

A. Many provinces have now arranged with the federal government to make a single student loan for easier management.

When your loans get 'consolidated' after you finish school, you will only have to make one monthly payment instead of paying on two loans, provincial and federal.

But this is just for management purposes. You still owe both governments the amount each lent you. Typically, 60% of your loan money comes from the federal government and the other 40% you owe to your province.

However, this proportion can change because some provinces reduce their 40% of the debt by giving you grants or other aid. 

Q. What about private student loans?

A. Normally, private loans are lines of credit that people use when they can't get enough (or any) government student loans. You can tap a limited sum of money as needed, until it's gone.

Rules are simple, but you must normally pay interest every month, even during school. You also can't get loan repayment aid such as interest relief, debt reduction or forgiveness.

To get this type of loan, you will probably need some collateral or a co-signer.