Vol. 145, No. 26 — December 21, 2011


SI/2011-112 December 21, 2011


Order Fixing January 1, 2012 as the Day on which Section 18 of the Act Comes into Force

P.C. 2011-1547 December 8, 2011

His Excellency the Governor General in Council, on the recommendation of the Minister of Human Resources and Skills Development, pursuant to section 19 of the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act, chapter 15 of the Statutes of Canada, 2011, hereby fixes January 1, 2012 as the day on which section 18 of that Act comes into force.


(This note is not part of the Order.)


The Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act (the Act), which received Royal Assent on June 26, 2011, implemented various Budget 2011 measures. Section 18 of the Act amended the Canada Student Financial Assistance Act (CSFAA) to make student loans interest-free for students who are studying part time. This Order in Council (OIC) fixes January 1, 2012, as the date for the coming into force of this legislative amendment.

This coming into force date supports the Government of Canada’s commitment to ensuring that the improvements to student financial assistance announced in Budget 2011 be made available to part-time students for the 2011–12 academic year. It would also provide the time that is required to ensure that operational requirements (e.g. systems changes by the federal service provider) can be addressed prior to this implementation date.


The purpose of this Order in Council is to stipulate the date of January 1, 2012, for the coming into force of section 18 of the Act.


Part-time students take longer to complete their studies because they are often working while at school. Currently, Canada Student Loans (CSLs) disbursed to part-time students are subject to interest while the student is in-study, whereas CSLs disbursed to full-time students are not. Through Budget 2011, the Government of Canada committed to reducing the in-study student interest rate for CSLs to part-time students from prime plus 2.5% to 0%.

To implement this commitment, the Act was amended, thereby introducing changes to federal student financial assistance legislation, including the amendment of subsections 7(1) of the CSFAA and 7(2) of the French version only of the CSFAA. The coming into force of these amendments will effectively eliminate in-study interest on CSLs to part-time students. Given that CSLs are already interest-free for students who are in full-time study, this change will further align the part-time and full-time CSL regimes. Furthermore, by saving part-time students an estimated $5.6 million per year in interest costs, it is expected to make part-time post-secondary education affordable for more Canadians and encourage participation.



The annual cost to the federal government as a result of this change is estimated to rise from $1 million in 2012–13 to $5.6 million in 2016–17 and ongoing. There are currently approximately 5 000 part-time borrowers. This number is expected to rise to approximately 13 000 by 2016–17 as a result of changes to the part-time student financial assistance system announced in Budget 2011 (i.e. increases to the part-time loan and grant income eligibility thresholds). Forgone interest revenue, taking into account increased participation, accounts for approximately $4.4 million per year in respect to CSLs to part-time students. In addition, $1.2 million will be paid per year in alternative payments to jurisdictions that do not participate in the Canada Student Loans Program (CSLP) (Quebec, Northwest Territories and Nunavut).

The monetary benefit to students will be the same as the cost to the federal government. It is expected that students will save an average of $338 in interest per year.

Estimated Incremental Accrual Cost by Fiscal Year

$ millions





2016–17 and ongoing

5–year total

Interest rate cost








As key partners in the delivery of financial assistance to students, the participating provincial and territorial jurisdictions have been informed and are supportive of this change. Participating provincial and territorial jurisdictions process part-time student loan applications on behalf of the federal government. Their role, in respect of federal loans, does not extend past the application stage. As an interest rate change has no effect on application processing, the administrative impacts to these jurisdictions are anticipated to be minimal. These minimal impacts will most likely be related to the volume of part-time loan applications processed by participating jurisdictions, as eliminating in-study interest on part-time loans may encourage more Canadians to pursue part-time studies.


The National Advisory Group on Student Financial Assistance (NAGSFA), comprised of student and educational stakeholders, was updated regarding the Budget 2011 announcement in June 2011. NAGSFA members have indicated they are supportive of eliminating in-study interest on CSLs to part-time students at the earliest possible date. This change will support one of the key advocacy objectives of the Canadian Alliance of Student Associations (CASA) over the past few years, which has been advocating for reforms to part-time student loans. In a media release on June 6, 2011, following the Budget announcement, CASA stated they are “pleased to see positive reforms to the Canada Student Loans Program (CSLP), such as an increase to in-study work income exemption, improved access for part-time students, and tax relief for trades and professional certification. These measures will help attract and retain students while addressing minor financial barriers.” CASA continues to seek other improvements to federal student financial assistance.

With respect to implementation, the third party service provider for the CSLP has been consulted regarding the required changes to its information technology systems. These changes will be completed in order to support implementation by January 1, 2012.


For more information, please contact

Atiq Rahman
Operational Policy and Research
Canada Student Loans Program
Human Resources and Skills Development Canada
200 Montcalm Street
Gatineau, Quebec
K1A 0J9
Telephone: 819-994-4518
Email: atiq.rahman@hrsdc-rhdcc.gc.ca