Student Loan Interest Tax Credit: How to Claim It in Canada

If you are repaying a student loan in Canada, the interest you pay may qualify for a federal and provincial tax credit. This is one of the most overlooked credits for recent graduates. Over the life of your loan, it can save you hundreds or even thousands of dollars in taxes.

Which Loans Qualify?

Only interest paid on loans received under the following programs qualifies:

Canada Student Loans Act
Canada Student Financial Assistance Act
Apprentice Loans Act
Similar provincial or territorial student loan legislation

Interest on the following does not qualify:

Personal loans or lines of credit used to pay for school
Student loans from banks or private lenders
Loans that have been consolidated with non-qualifying debt (e.g., rolled into a mortgage or line of credit)

How Much Can You Save?

The student loan interest tax credit is a non-refundable tax credit calculated at the lowest federal tax rate (14% for 2026) and your province’s lowest rate. It reduces your tax payable but cannot generate a refund on its own.

Important 2026 context: Federal interest on Canada Student Loans was permanently eliminated as of April 1, 2023. For most recent graduates, there is no longer federal interest accruing on your loan. This credit is most relevant if you have provincial student loan interest (some provinces still charge interest), or if you are carrying forward older interest from prior years. If you have no qualifying interest, there is nothing to claim.

Example: If you paid $2,000 in qualifying student loan interest, your federal tax credit is $2,000 × 14% = $280. With provincial credits, total savings could be $320 to $420 depending on your province.

The 5-Year Carry-Forward Rule

You do not have to claim the interest in the year you paid it. You can carry forward unused student loan interest for up to 5 years and apply it to a future tax return when you have enough tax payable to benefit from the credit.

This is especially useful for new graduates who may have low income (and low tax) in their first few working years. Wait until you are in a higher tax bracket to maximize the benefit.

Important: You can only carry forward the interest — not transfer it to a spouse. Student loan interest credits are non-transferable.

How to Claim It

Get your student loan interest statement from the National Student Loans Service Centre (NSLSC) or your provincial student loan provider. For federal loans, the information is available online through your NSLSC account.
Enter the total qualifying interest paid on Line 31900 of your T1 return (provincial/territorial credit on Line 58520 of Form 428).
Claim oldest interest first: CRA requires you apply carry-forward amounts starting with the oldest year before claiming current-year interest.
Keep your records for at least 6 years in case the CRA asks for documentation.

What About the Repayment Assistance Program (RAP)?

If you are enrolled in the Repayment Assistance Program and the government is covering part or all of your interest payments, you can only claim the interest you actually paid — not the portion covered by the government.

Combining with Other Education Credits

The student loan interest credit is separate from tuition credits (transferred from Schedule 11). You can claim both if eligible. Key differences:

Tuition credits can be transferred to a parent, grandparent, or spouse (up to $5,000 federally). Student loan interest credits cannot be transferred.
Tuition credits can be carried forward indefinitely. Student loan interest can only be carried forward for 5 years.

Key Takeaway

If you have a government-backed student loan, check your interest statement every year and claim the credit. If you do not have enough tax payable this year, carry it forward. Do not let it expire after 5 years without using it.

And whatever you do, do not consolidate your government student loan into a personal line of credit or mortgage without understanding that you will permanently lose this tax credit.

Have questions about education-related tax credits? Visit FinGems.ca for more Canadian tax guides.