How to Apply to Have Canada Student Loans Cancelled Because of a Severe Permanent Disability

Who qualifies for the Severe Permanent Disability Benefit?

The Severe Permanent Disability Benefit, usually called the SPDB, is intended for borrowers whose disability is so severe and lasting that they cannot participate in substantially gainful employment and are not expected to regain that capacity during their lifetime.

Under the Canada Student Financial Assistance Regulations, a severe permanent disability can involve a physical, mental, intellectual, cognitive, learning, communication or sensory impairment, or a functional limitation. The key question is not simply whether you have a diagnosis. The impairment or limitation must prevent you from performing the daily activities necessary to participate in the labour force in a substantially gainful manner and must be expected to remain with you for your expected life.

You can review the current federal eligibility rules on the official Severe Permanent Disability Benefit page.

What does substantially gainful employment mean?

For this benefit, substantially gainful employment has a specific legal meaning. It refers to work that provides salary or wages at least equal to the maximum annual amount a person could receive as a Canada Pension Plan disability pension.

The medical assessment therefore looks beyond whether you can return to your old job. It considers whether your impairment or functional limitation prevents you from performing the daily activities needed to participate in the labour force at that substantially gainful level for the remainder of your life.

This is why qualifying for another disability program does not automatically qualify you for the SPDB. The federal student loan program applies its own statutory definition and medical adjudication.

What do you need before applying?

The application requires both financial and medical evidence. Before you start, gather the documents needed to show your recent employment and income situation and arrange for an eligible medical professional to complete the medical report.

The current SPDB application checklist asks for proof of income covering the two most recent years. Depending on your situation, acceptable supporting information can include:

• your most recent T4;
• a CRA Proof of Income Statement, sometimes called an Option C Print;
• dated employer pay stubs;
• a Record of Employment;
• a signed employer letter describing monthly income and employment changes;
• earnings statements for business income or contracted work;
• an attestation that you have no current employment income where a recent severe permanent disability has resulted in no income.

The application also asks about your current or most recent employment and your work history. Complete those sections accurately because the adjudicator uses the information alongside the medical evidence to assess how your condition affects your ability to work.

Who can complete the SPDB Medical Report?

The medical portions of the SPDB Medical Report must be completed by a licensed physician or nurse practitioner.

The report asks the medical professional to describe the nature and history of your disability, diagnoses, functional limitations, relevant medical and social history, treatments, medications and other evidence needed to assess whether your limitations prevent substantially gainful participation in the labour force for life.

You can download the official SPDB Medical Report from the Government of Canada.

Is there a fee to apply?

The federal government does not list an application fee for the Severe Permanent Disability Benefit. However, your physician or nurse practitioner may charge you for completing the medical report.

The Canada Student Financial Assistance Program specifically states that it does not reimburse fees charged to complete the SPDB Medical Report.

For that reason, the program recommends reviewing the eligibility criteria, and contacting the Canada Student Financial Assistance Program if necessary, before paying to have the medical report completed.

How recent must the forms be?

The SPDB Application and SPDB Medical Report must both be completed, signed and dated within the last 12 months.

Only the original completed documents are accepted under the current application instructions. Keep copies for your own records before sending the originals.

How do you apply for Canada Student Loan cancellation?

The current federal procedure is a paper application. The Government of Canada instructs applicants to mail the original documents rather than submit them online, by fax or by email.

1. Download the official SPDB Application.
2. Complete your applicant information, employment details and the required declarations.
3. Gather proof of income for the two most recent years.
4. Give the SPDB Medical Report to your licensed physician or nurse practitioner.
5. Make sure both forms are signed, dated and no more than 12 months old when submitted.
6. Make copies for your records.
7. Mail the original application and proof of income to the Canada Student Financial Assistance Program.
8. You or your medical professional must mail the original medical report and supporting medical documentation to the same program.

Where do you mail the application?

Send the original documents to:

Canada Student Financial Assistance Program
P.O. Box 2090, Station D
Ottawa ON K1P 6C6

The current forms state that the original application and medical report must not be faxed or emailed.

Do you keep making student loan payments while you wait?

Yes. The current SPDB application checklist instructs borrowers to continue making their required monthly student or apprentice loan payments during the application process.

Do not stop payments simply because you mailed the SPDB application. If you cannot afford the required payment while your application is being assessed, contact the National Student Loans Service Centre to discuss the repayment assistance options that may be available to you.

The Repayment Assistance Plan for Borrowers with Disabilities is a separate program from the SPDB and has different eligibility criteria.

Is SPDB the same as RAP-D?

No. They solve different problems.

The Severe Permanent Disability Benefit can permanently cancel eligible student loan debt for a borrower whose severe permanent disability prevents substantially gainful employment for life.

The Repayment Assistance Plan for Borrowers with Disabilities, or RAP-D, is designed to reduce or eliminate required payments for a six-month period based on the program's eligibility rules. Borrowers must reapply to remain on RAP-D.

If your disability affects your ability to repay but does not meet the lifetime severity test for SPDB, RAP-D may be the more relevant program.

Can the same application cancel provincial student loans?

For some integrated provincial student loan programs, the same SPDB application can be used to have both the Canada Student Loan and the provincial loan considered.

The Government of Canada currently lists:

• British Columbia;
• Manitoba;
• Ontario;
• New Brunswick;
• Newfoundland and Labrador;
• Saskatchewan.

If you have student loans from another province or territory, you must also contact that jurisdiction's student aid office about its own repayment assistance or disability-related cancellation rules.

The provincial authority makes the decision about the provincial portion of the debt. Approval of the federal benefit should not be treated as an automatic approval under a separate provincial program.

Are the rules different for Ontario Student Loans?

Yes. The federal application contains additional requirements for Ontario Student Loans and Ontario Micro-credential Student Loans.

For the Ontario portion, the application states that the severe permanent disability must prevent the borrower from both pursuing studies at a post-secondary level for the rest of their life and participating in the labour force for the rest of their life. The borrower must also reside in Canada.

Ontario borrowers must complete the additional declarations and consent section in the SPDB Application, and the licensed physician or nurse practitioner must complete the Ontario-specific question in the medical report.

What happens after you apply?

The Canada Student Financial Assistance Program sends the application for medical adjudication. A medical adjudicator reviews the application, medical report and supporting evidence against the federal SPDB eligibility test.

The program does not publish a fixed processing time on its current SPDB information page. After the assessment is complete, it will notify you in writing of the decision.

If provincial student loans from British Columbia, Manitoba, Ontario, New Brunswick, Newfoundland and Labrador or Saskatchewan were included, the relevant provincial student loan authority will contact you about its decision.

What happens to your student loan if SPDB is approved?

If you qualify, the obligation to repay the eligible Canada Student Loan debt covered by the benefit is cancelled. The current application states that cancellation takes effect on the date of the SPDB decision.

The Canada Student Financial Assistance Act provides that rights against the borrower in respect of an eligible student loan terminate where the Minister is satisfied that, because of severe permanent disability, the borrower cannot repay the loan and will never be able to repay it.

The federal statutory basis can be reviewed in the Canada Student Financial Assistance Act.

Can you get another Canada Student Loan after receiving SPDB?

No. This is one of the most important consequences to understand before applying.

If you receive the Severe Permanent Disability Benefit, you become ineligible for additional Canada Student Grants or Canada Student Loans. The federal application also states that an approved borrower will no longer be eligible for additional Canada Apprentice Loans.

Participating provinces listed on the SPDB application may also restrict future provincial loans and grants after approval.

This restriction makes SPDB very different from temporary repayment assistance. If returning to post-secondary education with government student aid may be part of your future plans, understand this consequence before deciding whether to apply.

Can someone apply on your behalf?

Yes. An authorized representative can complete and sign the application for you, but the representative must provide proof of authorization.

The federal program gives examples such as a power of attorney, trustee appointment or guardian appointment. Simply being a spouse, parent, friend or caregiver does not by itself establish authority to sign the application for another adult.

Common mistakes to avoid

• Do not assume that having a permanent disability automatically means you meet the stricter severe permanent disability test.
• Do not assume approval for CPP disability benefits, a disability tax program or another disability benefit guarantees SPDB approval.
• Do not pay for the medical form before reviewing the SPDB eligibility criteria if you are unsure whether you may qualify.
• Do not submit photocopies in place of the original application and original medical report where the current forms require originals.
• Do not fax or email the application or medical report.
• Do not submit forms that were completed, signed or dated more than 12 months ago.
• Do not forget proof of income covering the two most recent years.
• Do not stop required student loan payments simply because your application is under review.
• If an authorized representative applies for you, do not omit proof of their legal authority.
• If you have Ontario loans, complete the additional Ontario declarations and medical information required by the forms.

Who can you contact if you are unsure whether you qualify?

You can contact the National Student Loans Service Centre at 1-888-815-4514 and ask for your call to be forwarded to a representative of the Canada Student Financial Assistance Program.

The current program also lists TTY service at 819-994-1218 locally or 1-866-667-8554 toll-free.

Speaking to the program before arranging the medical report can be useful if you are uncertain about the severe permanent disability test, especially because medical professionals may charge a fee that the federal program will not reimburse.