How to Rehabilitate a Defaulted Canada Student Loan and Restore Good Standing
Learn how to bring a defaulted federal Canada Student Loan back into good standing, contact CRA collections, meet the four-payment requirement and complete rehabilitation with the NSLSC.
CA Canada
Education ~ 12 min read
8 FAQ
Updated 2026-10-08
Helpydo structures practical guidance around official or public sources. For individual cases, confirm requirements with the responsible institution.
If your federal Canada Student Loan is in collections, contact the Canada Revenue Agency (CRA) to ask about loan rehabilitation. Under current federal guidance, eligible borrowers must make the equivalent of four monthly payments and either pay outstanding interest or add it to the loan balance using a one-time option. After meeting the CRA requirements, contact the National Student Loans Service Centre (NSLSC) to complete rehabilitation. Provincial loan debts may require separate arrangements.
What you need
- A federal Canada Student Loan in collections for which rehabilitation is available.
- Your Social Insurance Number, full legal name, date of birth and current contact information for identity verification.
- Any CRA collections correspondence or loan account details available to you.
- Information about your financial circumstances to discuss a payment arrangement with the CRA.
- The ability to make the equivalent of four monthly payments under the rehabilitation requirements established for your account.
- Payment of outstanding interest, if applicable, or confirmation that you qualify for the one-time option to add unpaid interest to the loan balance.
- Contact with the National Student Loans Service Centre after completing the CRA payment requirements.
- Separate arrangements with the appropriate provincial or territorial authority if your loan includes a component that is collected separately.
Eligibility
Loan rehabilitation is intended for borrowers whose federal Canada Student Loan has defaulted and been transferred to collections. The Canada Revenue Agency assesses whether the borrower can use the federal rehabilitation process and establishes the applicable payment requirements. Borrowers must satisfy the required payments and any outstanding-interest condition before the National Student Loans Service Centre can complete the return to good standing. Provincial or territorial student loan debts may follow different collection and rehabilitation rules.
How to do it
- Confirm that your loan is in collections. Review your CRA or NSLSC correspondence and identify whether the defaulted debt is federal, provincial or both.
- Contact CRA student loan collections. Call 1-866-864-5823 within Canada or the United States, or 1-613-221-3004 from elsewhere, to discuss the federal loan.
- Ask specifically about rehabilitation. Request confirmation of eligibility, the outstanding balance, any unpaid interest and the amount equivalent to four monthly payments.
- Choose the applicable interest option. Arrange to pay outstanding interest or ask whether you can use the one-time option to add it to the loan balance.
- Agree on payment arrangements. Confirm payment instructions, amounts and dates directly with the CRA.
- Complete the required payments. Make the equivalent of four monthly payments and satisfy the agreed interest condition.
- Contact the NSLSC. After completing the CRA requirements, contact the National Student Loans Service Centre to finish the rehabilitation process.
- Confirm that your loan is back in good standing. Do not assume the process is complete merely because the required payments have been made.
- Review future repayment options. Once rehabilitation is completed, ask about repayment assistance or payment-term changes if you cannot afford regular payments.
- Address any provincial debt separately. Contact the responsible province or territory when its portion of your loan is not handled through the same CRA process.
How do you get a defaulted Canada Student Loan back into good standing?
You may be able to rehabilitate your defaulted federal Canada Student Loan through the Canada Revenue Agency (CRA). The current federal process requires eligible borrowers to make the equivalent of four monthly payments and deal with any outstanding interest. After completing those requirements, you must contact the National Student Loans Service Centre (NSLSC) to finish the process.
Your first action is to contact CRA collections and ask for a Canada Student Loan rehabilitation assessment. The CRA handles the collection arrangements, while the NSLSC completes the return to regular loan servicing after the rehabilitation requirements have been met.
Read the official Government of Canada instructions for loans in collections before arranging payments.
When is a Canada Student Loan considered in default?
When you miss approximately nine months of required payments, the federal portion of your Canada Student Loan is transferred to the CRA for collections.
The NSLSC describes this stage as occurring after at least 270 days of missed payments. At that point, the federal loan is no longer managed through ordinary repayment arrangements in the same way as a loan that remains in good standing.
Default has important consequences:
- Your federal loan is referred for collection.
- Missed payments can negatively affect your credit history.
- You lose access to further student financial assistance while the relevant loan remains in collections.
- Ordinary NSLSC repayment options are not a substitute for rehabilitating a loan already in collections.
The NSLSC stages of a student loan page explains how loans move from repayment into collections.
How many payments are needed to rehabilitate a defaulted student loan?
The Government of Canada's current borrower instructions specify the equivalent of four monthly payments, together with one of two arrangements for any outstanding interest.
| Option | Requirement |
|---|---|
| Pay outstanding interest | Pay the interest owing and the equivalent of four monthly payments |
| Capitalize outstanding interest | Add eligible unpaid interest to the loan balance once and make the equivalent of four monthly payments |
The option to capitalize unpaid interest can be used only once. Adding interest to the loan balance does not cancel the debt; it increases the outstanding principal instead of requiring that interest to be paid separately at rehabilitation.
The exact dollar amount must be confirmed with the CRA. Do not calculate your rehabilitation requirement simply by multiplying an old monthly payment by four, because the CRA must confirm the amount applicable to your account.
Some older government publications describe a two-payment rehabilitation requirement. The current federal borrower instructions, updated in May 2026, specify four monthly payments. Follow the current borrower instructions and confirm the applicable requirement with CRA collections rather than relying on an older program report.
Who do you call to rehabilitate a Canada Student Loan?
The CRA is the first point of contact for the federal portion of a defaulted Canada Student Loan that has entered collections.
Use the current CRA collections contact information:
- Within Canada or the United States: 1-866-864-5823.
- Outside Canada and the United States: 1-613-221-3004.
- Published telephone hours: Monday to Friday, 8 a.m. to 8 p.m. Eastern Time, excluding public holidays.
If you received a collections letter identifying an assigned officer, use the contact instructions in that letter or verify the contact details with the CRA.
The official CRA collections contact page identifies the telephone numbers for Canada Student Loan and Canada Apprentice Loan debts.
What information should you have ready?
Prepare your Social Insurance Number, legal name, date of birth and current address. Keep any collections notices or loan information available so the agent can identify your account.
Explain that you want to bring your defaulted federal Canada Student Loan back into good standing through rehabilitation. Ask the agent to confirm the required payment amount, treatment of outstanding interest and the steps for completing the process.
If your financial circumstances make the proposed payment schedule difficult, explain your situation before agreeing to an arrangement. The CRA can discuss the payment options available for your account.
How to complete the loan rehabilitation process
Step 1: Ask CRA to assess your account
Call CRA collections and confirm that your federal Canada Student Loan is eligible for rehabilitation. Ask for a breakdown of the outstanding loan balance and any interest that remains owing.
Also confirm whether you have a separate provincial or territorial student loan debt. Completing the federal process does not automatically resolve every other loan account.
Step 2: Confirm the interest option
Ask whether your account has outstanding interest that must be addressed before rehabilitation.
The current federal rules allow eligible borrowers either to pay the outstanding interest or to add it to the loan balance through the one-time capitalization option.
Canada Student Loans no longer accrue new federal interest under the current federal repayment rules. However, previously accrued interest can remain owing. Some provincial loan components may still have their own interest rules.
Step 3: Make the equivalent of four monthly payments
Confirm the rehabilitation payment amount and the payment instructions with the CRA. Make the required payments according to the arrangement established for your account.
Keep payment confirmations and records of any discussions with the collections officer. These records can help resolve questions about whether all rehabilitation conditions have been satisfied.
Do not send payments to an unfamiliar account or assume that the ordinary NSLSC payment instructions still apply to the federal debt while it is in CRA collections.
Step 4: Complete rehabilitation through the NSLSC
Once you have made the required payments and addressed the outstanding-interest condition, contact the National Student Loans Service Centre to complete the rehabilitation process.
This final step matters because satisfying the payment requirement is not, by itself, confirmation that the loan has been restored to good standing.
The official federal instructions explicitly direct borrowers to contact the NSLSC after making their rehabilitation payments.
Step 5: Confirm the outcome
Ask the NSLSC to confirm that the rehabilitation has been completed and that your federal loan is again in good standing.
Review the repayment schedule and payment method that will apply after the loan returns to regular servicing. If the proposed payment amount is unaffordable, discuss the assistance options available after rehabilitation.
What if your student loan also has a provincial portion?
Canadian student aid can include federal and provincial or territorial funding. A federal rehabilitation arrangement does not necessarily clear a separate provincial debt.
| Loan component | Who to contact |
|---|---|
| Federal Canada Student Loan | CRA collections |
| Manitoba or Saskatchewan student loan in collections | CRA may handle both components |
| Other provincial or territorial loan | Relevant provincial or territorial authority |
The Government of Canada specifically directs borrowers with Manitoba and Saskatchewan student loans to the CRA for both federal and provincial components. For other provincial or territorial loans, contact the relevant authority to confirm the collection and rehabilitation requirements.
For example, a borrower with a federal Canada Student Loan and a separately collected provincial loan should confirm the rehabilitation requirements for each component before assuming that one payment arrangement will restore the entire student aid account.
Is there an online application for student loan rehabilitation?
The current federal instructions direct borrowers to contact the CRA to determine eligibility and arrange the required payments, then contact the NSLSC to complete rehabilitation.
They do not provide a standalone public online rehabilitation application that replaces those contacts. Accordingly, an NSLSC login alone should not be treated as a completed rehabilitation request.
Use the official CRA collections instructions to begin. Once the federal loan has been returned to regular NSLSC servicing, you can use your NSLSC account to manage eligible repayment functions.
How much does rehabilitation cost and how long does it take?
The current federal guidance does not identify a separate administrative application fee for rehabilitation. However, rehabilitation requires actual loan payments, so it is not a debt-free procedure.
The amount you need depends on the monthly-payment equivalent established for your account and the treatment of any outstanding interest.
There is no universal published number of business days for completing rehabilitation. The process depends on the payment arrangement, when the required payments are satisfied and when the NSLSC completes the restoration.
Ask the CRA and NSLSC about the status of your specific account rather than relying on an estimated approval date.
What happens after your student loan returns to good standing?
Once the federal loan is successfully rehabilitated, it can return to normal servicing through the NSLSC. Rehabilitation can also remove the default-related restriction on accessing eligible student financial assistance.
However, returning a loan to good standing does not automatically approve a new grant, loan or repayment assistance application. Those programs have separate eligibility conditions.
If your regular payment is unaffordable after rehabilitation, consider the Repayment Assistance Plan (RAP). This is a separate application and is not a substitute for the rehabilitation requirements while the loan remains in collections.
If you can repay the loan but need a smaller monthly instalment, see changing your student loan monthly payment and repayment terms.
Is rehabilitation the same as repayment assistance?
No. Rehabilitation addresses a federal student loan that has already entered collections. Repayment assistance is intended to help eligible borrowers manage repayment obligations under the applicable program rules.
| Your situation | Relevant process |
|---|---|
| Federal loan already in CRA collections | Loan rehabilitation |
| Loan in good standing but payments unaffordable | Repayment Assistance Plan |
| Loan in regular servicing; want different instalments | Customize repayment terms |
| Qualifying severe permanent disability | Separate disability cancellation assessment |
If you have a severe permanent disability, a different federal process may be relevant. Review student loan cancellation for severe permanent disability without assuming that disability cancellation is part of ordinary rehabilitation.
What if you cannot afford the required payments?
Contact CRA collections before agreeing to a payment arrangement that you cannot maintain. Explain your financial situation and ask which payment arrangements are available.
The federal rehabilitation rules still require the applicable payment equivalent and interest condition. A general collection arrangement should not be assumed to satisfy rehabilitation unless the CRA confirms that it does.
If you already have an arrangement and cannot make an agreed payment, contact the CRA to discuss changes. The CRA's general collections guidance advises debtors to communicate before missing agreed payments.
For payment arrangement information, consult the official CRA payment arrangement guidance.
What if your loan is not restored after you make the payments?
If you believe you have completed the requirements but the loan remains in collections, contact the CRA to confirm whether all required payments have been received and the interest condition has been satisfied.
Then contact the NSLSC and explain that you are seeking completion of federal loan rehabilitation. Provide the payment dates and reference information requested.
If the CRA says you do not qualify, ask which condition has not been met and what would be needed for a further assessment. Do not assume that submitting a new student aid application will resolve the collection restriction.
The published borrower instructions do not specify a universal formal appeal deadline for every rehabilitation eligibility disagreement. Ask the responsible program for the applicable review or complaint process if your account information appears incorrect.
Common mistakes to avoid
- Following outdated payment rules: the current federal borrower instructions specify four monthly-payment equivalents, not the two-payment figure in older reports.
- Calling only the NSLSC at the beginning: a federal loan already in collections requires contact with the CRA to establish rehabilitation requirements.
- Ignoring outstanding interest: any applicable unpaid interest must be addressed through one of the permitted options.
- Assuming interest capitalization is unlimited: the option to add unpaid interest to the loan balance can be used only once.
- Forgetting the final NSLSC contact: contact the NSLSC after satisfying the CRA requirements to complete the process.
- Overlooking a provincial debt: provincial and territorial components may require separate arrangements.
- Applying for RAP before rehabilitation: repayment assistance does not replace the process for a federal loan already in collections.
- Assuming a payment arrangement means the loan is rehabilitated: confirm that the loan has actually returned to good standing.
The essential sequence is to verify the federal collection status, obtain the current rehabilitation requirements from the CRA, complete the required payments and interest arrangement, and then confirm completion with the NSLSC.
Frequently asked questions
How do I get my defaulted Canada Student Loan back into good standing?
Contact CRA collections to confirm rehabilitation eligibility and the required payments. Under current federal guidance, eligible borrowers make the equivalent of four monthly payments and address outstanding interest. Contact the NSLSC afterward to complete rehabilitation.
How many payments do I need to rehabilitate a Canada Student Loan?
The current Government of Canada borrower instructions require the equivalent of four monthly payments, plus payment or eligible one-time capitalization of outstanding interest. Confirm the exact amount with the CRA.
What number do I call about a defaulted Canada Student Loan?
For CRA collections involving Canada Student Loans, call 1-866-864-5823 within Canada or the United States, or 1-613-221-3004 from outside those countries.
Can I rehabilitate my defaulted student loan online?
The current federal instructions require contact with the CRA for rehabilitation arrangements and the NSLSC to complete the process. They do not identify a standalone online application that replaces these steps.
Can I get new student loans after rehabilitation?
Successful rehabilitation can remove the default-related restriction on student financial assistance. You must still meet the eligibility requirements for any new student loan or grant.
Can I apply for the Repayment Assistance Plan while my loan is in collections?
A federal loan in collections must first be brought back into good standing to regain access to ordinary repayment assistance options. After rehabilitation, check whether you qualify for RAP.
Does rehabilitating my federal loan also fix my provincial student loan?
Not necessarily. Provincial and territorial student loan debts may have separate collection requirements. The federal guidance identifies Manitoba and Saskatchewan as provinces whose borrowers can contact the CRA about both components.
How long does Canada Student Loan rehabilitation take?
No universal processing period is published. The time depends on completing the CRA payment requirements and the subsequent NSLSC process. Confirm the status of your account with both organizations.
Official sources
Government of Canada — Repay a student loan: Can't repay and bring a loan back into good standingCanada Revenue Agency — Contact CRA collections about Canada Student LoansNational Student Loans Service Centre — Stages of a Student LoanGovernment of Canada — Student loan payment options and interest rulesCanada Revenue Agency — Arrange to pay your debt over timeRelated procedures
Useful next steps and closely related guides for Canada.
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