Should You Take a Year Off Student Loans?

You may wonder if you could keep your debt down by saving enough to take a year off student loans.

It may work for you. But be aware that there are three risks with taking this approach.


You could automatically go into loan repayment status if you forget to send in a confirmation form (Schedule 2) each term to prove that you're still in school.

Of course you'd eventually sort things out if you were suddenly expected to make payments on your loan. But it would be stressful and would waste your time.

So if you take a year off loans, be sure to send your confirmation in each term. And if you normally send this to both provincial and federal lenders during loan years, send it to both of them during your year off loans. They don't usually communicate with each other: that's up to you.

Finally, since student loan service centres sometimes make paperwork mistakes, protect yourself by calling your student loan centre(s) to check that they processed your confirmation properly. If they can't find the information in your file, talk to a supervisor and, if necessary, send your confirmation form again.


The second risk with taking a year off loans is that you could lose eligibility for other forms of financial aid.

This could include a provincial grant that makes up part of your total loan amount, or perhaps grants or bursaries you may be automatically entered for at your school when the financial aid staff there see that you've filed a student loan application.

Be sure to talk to a financial aid counsellor at your school about this possibility – before you skip a year off loans.


The third risk is that you may make your sacrifice for nothing. You might take your year off loans when your provincial government has a loan reduction program that would have limited your total debt anyway.

For example, you might graduate with a debt of 'only' $24,000 when your provincial government would have cut your debt down to $24,000 or a similar amount.

Only a few provinces do have these kinds of programs. But check this with your financial aid counsellor. And also ask if there is any other potential pitfall you'd face if you took a year off loans.

So… what can you do if in fact you would lose out on grants or other kinds of aid if you took a year off student loans?

If you have the willpower, there's a better option. Take out your student loan, but keep it in the bank. See Bank On Your Student Loans.