Student Loans
Student Loan Information
After many years of advocacy, in 2004, PARA successfully lobbied the government to make Alberta Student Loans remain interest free for the period of Medical Residency and delay repayment until residency completion. This exemption does not apply to all provincial student loans.
Canadian Student Loans require repayment after the completion of medical school. The first payment does not meed to be made until six months after graduation. At this point, if no payments have been made, the bank adds the six months of interest to your total loan principal (in the process you lose the ability to claim this six month interest portion as a tax credit) and then amortizes the repayments over 9.5 years and calculates your monthly payments. As the Prime Rate changes, the bank adjusts the monthly payments.
Note, however, that the Canadian Government has a new Payment Assistance Plan starting in fall, 2009, under which national student loans do not accumulate interest. Under this plan, resident physicians still have to start paying back their student loans during residency, but the amount is based on income. You have to opt in and be eligible to take advantage of this program.
Tip: Interest on student loans is tax deductible; however, once you consoliate these loans with personal loans, you lose the deduction.
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