Understanding student loan consolidation

Following graduation from college or university, you may be one of the thousands of students facing loan repayment. Up to 60 percent of the cost of your education may have come from federal student loans administered by the Canada Student Loan Program. If you needed more financial assistance, you may have explored provincial or territorial loans. Finally, you may have accumulated private loans and lines of credit offered by banks to help you meet the costs of your education.

It's paramount that you know where your loans came from so that you can be prepared to repay them in a timely fashion. You may receive correspondence from the government regarding student loan consolidation, and it's also important that you understand that process and what it means to you.

Which student loans are consolidated?

The possibility of Student loan consolidation depends on the province or territory in which you live. If you took out both federal and provincial loans, they will automatically consolidate if you live in:

  • New Brunswick
  • Newfoundland and Labrador
  • Ontario
  • Saskatchewan

These provinces allow you to apply for both loans with one application, and after graduation, they consolidate the student loans via the Integrated Student Loans program. You'll pay only one loan to satisfy both debts.

There are some provinces and territories that only offer one type of loan, either federal or provincial/territorial, so you'll only have one loan to repay anyway. These include:

  • Nunavut
  • The Northwest Territories
  • Quebec
  • Yukon

In all remaining provinces, you could apply for both federal and provincial loans with one application, but these student loans will not be consolidated upon graduation. That means you'll have to be sure to repay each loan separately. This is the case if you live in:

  • Alberta
  • British Columbia
  • Manitoba
  • Nova Scotia
  • Prince Edward Island

When do I start repaying my student consolidation loans?

You have a grace period following graduation before you have to start repaying your government loans whether they are consolidated or not. This grace period lasts six months. In that timeframe, you'll receive paperwork regarding your loans so you know how much you owe, how much interest you're paying and where to send payments. Take note that interest starts accumulating upon graduation.

Can I consolidate private student loans?

In a manner of speaking, you can consolidate private student loans held with a bank. For example, if you took out a loan or line of credit from another institution but found that CIBC had a more competitive interest rate, you could apply for the Education Line of Credit to satisfy those debts. To determine whether you'd be eligible for this, you'll want to speak to a CIBC advisor at 1-866-525-8622.

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