Student loan repayment policies in Canada have entered a new era, and for students and graduates in Saskatchewan, the effects are being felt province-wide. Whether you’re attending the University of Saskatchewan in Saskatoon, the University of Regina, or a regional college, chances are your repayment strategy has been impacted by this year’s sweeping federal changes.

With student debt levels remaining a pressing concern—especially in rural and northern communities—2025 is shaping up to be a pivotal year for how Saskatchewan borrowers repay their education loans. From the return of interest charges to fewer repayment options and stricter borrowing caps, here’s a detailed look at the key developments shaping student loan repayment across the province.

1. Interest Charges Are Back After Five-Year Pause

The most immediate change facing Saskatchewan borrowers is the return of interest on federal student loans, effective August 2025. For five years, interest was paused nationwide due to COVID-19 relief measures, giving students across the province a break from compounding loan balances.

Now, interest rates have resumed between 4% and 7.5%, depending on the loan type. For borrowers across cities like Regina, Saskatoon, and Prince Albert, that means higher monthly payments—and for some, renewed anxiety over rising balances despite regular payments.

While the reinstatement isn’t retroactive, it marks a clear shift back to pre-pandemic repayment norms. This change has prompted many Saskatchewan borrowers—especially those juggling other financial obligations like housing or childcare—to revisit their budgets and long-term repayment plans.

2. Simplified Repayment Options Now in Effect

Previously, federal borrowers could choose from a variety of income-driven repayment plans. But in 2025, the federal government has streamlined these into just two core options: the 10-year standard repayment plan and a revised Repayment Assistance Plan (RAP), which now allows for extended repayment terms up to 30 years based on income.

While the intent is to make repayment easier to navigate, Saskatchewan borrowers may find that the new RAP lacks some of the benefits previously offered under now-defunct plans like SAVE or PAYE. In particular, forgiveness under the new RAP could take longer to achieve.

New borrowers starting in 2026 will automatically be enrolled in RAP unless they opt out, and those currently on older repayment plans will be migrated by 2028. Saskatchewan Student Loans has begun issuing notices and updating guidance to help affected borrowers understand the transition.

3. Default Collections Resume After Suspension

Another major development in 2025 is the reinstatement of collection activity on federal loans in default. For several years, borrowers who stopped making payments were shielded from wage garnishments and tax refund withholdings. But that protection ended earlier this year, and enforcement has resumed across Saskatchewan.

Estimates suggest that thousands of borrowers in the province may now be subject to collection efforts, particularly in areas where unemployment or underemployment has remained high post-pandemic. Some residents in smaller communities like Moose Jaw, Swift Current, and Yorkton are reporting confusion after receiving garnishment or refund seizure notices.

Borrowers in default can potentially pause collections by re-entering the RAP, but many are unaware of this option. As a result, local financial counsellors and community service organizations are ramping up outreach to prevent financial escalation and long-term credit damage.

4. Tighter Forgiveness Rules Now Apply

Loan forgiveness in Saskatchewan has also become more restrictive. The Public Service Loan Forgiveness (PSLF) framework—designed to assist those working in healthcare, education, or government—is still available, but only borrowers enrolled in the revised RAP will continue to accrue eligible months.

This is a notable shift for many public sector workers in Saskatchewan, particularly in smaller communities where teachers, nurses, and emergency personnel form the backbone of essential services. Those on legacy income-based plans must now switch to RAP or risk losing progress toward forgiveness.

Shorter forgiveness periods that existed under earlier plans have also been eliminated for new borrowers. This could mean 5–10 additional years of repayment for some Saskatchewan residents, especially those with mid-sized debt and moderate income.

5. Federal Student Loan Caps Enforced Nationwide

In 2025, the federal government introduced hard caps on how much students can borrow. These new limits include a $65,000 cap on undergraduate loans via the Parent PLUS model, and $100,000 for graduate borrowers—up to $200,000 for high-cost programs like medicine and law.

In Saskatchewan, where tuition is relatively lower than in provinces like Ontario or British Columbia, the impact may be less immediate. However, for students pursuing advanced degrees or studying out of province, these caps could lead to funding shortfalls.

Families that previously relied on federal loans to fully fund higher education may now need to seek private loans, which carry fewer protections. Some Saskatchewan students are also re-evaluating whether to attend programs in high-tuition provinces or stick with more affordable in-province options like Saskatchewan Polytechnic or regional community colleges.

The student loan environment in Saskatchewan is undergoing major transformation. With the return of interest, streamlined repayment plans, the end of default leniency, restricted forgiveness pathways, and borrowing caps now in place, borrowers must quickly adapt to a new financial reality.

While some changes—like simplification—may offer clarity, others present serious affordability concerns, particularly for Saskatchewan residents managing lower incomes or rural job markets. Financial counsellors, student aid offices, and educational institutions across the province are stepping up efforts to support students and alumni as they navigate the updated system.

As these policies continue to roll out, Saskatchewan’s success in adapting will depend on how well borrowers are informed, protected, and supported in making sound financial decisions for their futures.