Student loan interest tax credit 2026: 14% of interest, no cap

Which student loans qualify for the credit?

Only interest on a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act or a provincial law that grants financial aid to post secondary students qualifies laws-lois.justice.gc.ca. Everything else is out, including a government loan that was later combined, renegotiated or consolidated with another loan canada.ca.

The consolidation trap catches graduates who rolled their government loan into a bank loan to get a lower rate. Once that happens the interest stops qualifying, even though the debt started as a student loan canada.ca.

How much is the credit worth for 2026?

For 2026 the federal credit is 14% of the qualifying interest, because section 118.62 multiplies the interest by the appropriate percentage, which is the lowest federal rate laws-lois.justice.gc.ca. Bill C-4 cut that rate from 15% to 14.5% for 2025 and to 14% from 2026 on canada.ca. There is no fixed maximum, so your client claims all the qualifying interest paid canada.ca.

The 14.5% for 2025 is a blend: the lowest rate fell from 15% to 14% on July 1, 2025 canada.ca. The 14% applies to the full 2026 year canada.ca. See the 2026 federal brackets for the rest of the rate table.

Outside Quebec, the same interest goes on line 58520 of the provincial Form 428 for the province where your client lived at the end of the year canada.ca. Ontario's 2025 ON428 multiplies its credits by 5.05% canada.ca, and 5.05% is still Ontario's lowest rate for 2026 canada.ca. A Quebec resident claims the provincial side through Revenu Québec instead canada.ca.

When should your client carry the interest forward instead?

Carry it forward when your client has no tax payable in the year the interest was paid. The credit can't create a refund, so claiming it in a year the basic personal amount already wipes out the tax wastes it. Unused interest can be claimed in any of the next five years, and the CRA says to apply the oldest amounts first canada.ca.

Worked example: an Ontario client paid $600 of student loan interest in 2022, when tuition and the basic personal amount left no tax to reduce, so it was never claimed. In 2026 the client earns a full salary and pays $900 of interest on the provincial portion of the loan.

Two things follow. The 2022 interest earns the 2026 rate of 14%, not the 15% that applied when it was paid, because the claim year's percentage applies. And the window is five preceding years, so the 2022 interest would have expired after the 2027 return, while anything still unused from 2021 dies with the 2026 return laws-lois.justice.gc.ca. The CRA doesn't track these amounts for your client, so keep your own schedule and never claim the same interest twice canada.ca.

Why many recent graduates have little interest left to claim

Canada Student Loans and Canada Apprentice Loans stopped charging interest on April 1, 2023, when the federal government made the elimination permanent canada.ca. Students still owe any interest that accrued before that date, and paying it still earns the credit.

So for 2026, a typical claim is the interest on the provincial or territorial portion of the loan, plus any carried forward amounts from 2021 and 2022. Quebec, the Northwest Territories and Nunavut run their own student aid programs outside the federal one canada.ca, so check the interest receipt from the lender rather than assuming a zero balance.

Who can claim when a parent pays the interest?

The student, and only the student. Interest paid by the student or by a related person counts, as long as the loan was made to the student laws-lois.justice.gc.ca. The parent who wrote the cheque gets nothing, and the student can't transfer the amount to a parent or spouse canada.ca.

That's the opposite of tuition, where part of the credit can move to a parent or grandparent. See how the tuition transfer works for that limit.

If the student dies, the executor can claim the interest paid in the year of death and the five preceding years on the final return, using the amounts on the receipts, and the CRA asks for those receipts to be attached canada.ca.