College studies are strenuous for students. While they are indulged in the rigorous curriculum at their college or university, they are hardly aware of what’s about to hit them as they graduate. If you are a student, this article is all you need for finance tips for students in Canada.
Student Debt: The Devil in the House
Student debt is often a neglected subject, but there is a need to address it as a priority. With the sky-high fees for attending college and low job opportunities, the need to take up more debt has risen to a greater extent than before. Adding this to the effect of the pandemic and fewer alternatives for earning, it is important that students explore more support plans and aids for studying.
To support why the pandemic had an adverse effect on the finances of students, CIBC held a survey in 2020, which showed that 7 out of 10 students are feeling stressed because their income has faltered due to COVID-19.
Moreover, studies are expensive with or without the pandemic. According to the 2018 Canadian University Survey consortium survey, 50% of students end school with hefty student debt, and the average amount that they need to repay is $28,000.
Keeping in mind that this is just an average figure, we all know the debts are much higher than it, and it forced over 22,000 students to declare bankruptcy in 2018. Hence, the need for finance tips for students in Canada becomes all the more crucial.
If you want to evade this kind of situation, these finance tips for students in Canada can help. Keep reading to find out how you can reduce the burden of student debt in different ways.
The Real Cost of Educational in Canada
Attending college or university means spending a significant sum of money. As per a study by Mclean in 2018, Canada’s universities cost around $19,498 per year.
The cost increases based on the type of course and the institution that you choose to attend. For example, the Ivy-League colleges generally have a much higher cost as compared to the other educational establishments.
The following table is a brief of all the things that contribute to the total amount of expenses for a student in Canada:
- Miscellaneous: $195
- Rent: $8,000
- Books/ other study resources: $780
- Groceries: $1,560
- Food on campus: $975
- Public transit: $390
- Traveling: $780
- Alcohol: $585
On the other hand, if you are living at home and studying, you can save a lot of money on rent alone, and the cost comes down to $9,300 a year.
Financial Support for Students in Canada
To help students pursue their studies during the pandemic, the government of Canada created the Canada Student Benefit Plan. But between May to August 2021, only an amount of $1,250 to $2,000 was available for students, which was not enough to pay for the high college expenses.
The provincial and federal governments have also made provisions to provide support to both part-time and full-time students in Canada through the CSLP program. The Canada Student Loan Program (CSLP) gives financial support to students based on the finances they need. This amount is calculated by comparing the expense of tuition, rent, school supplies, family income, the program’s length, and if the student is full-time or part-time.
To a full-time student, the CSLP provided 60% financial aid through federal loans. The weekly threshold for CSLP was $210. However, due to the pandemic, the government increased this threshold to $350 for the 2020-2021 academic year.
A Bit More
A CSLP loan is provided through public funds, and the graduate does not need to pay it back 6 months after the end of their studies. There won’t be any accumulated interest in it as well.
Once this grace period is over, the student has to repay the loan with the interest levied on it. You might have heard the rumor that you are not obliged to pay interest for the year 2020, but that is still not confirmed as it is in the finalizing stages by the department of finance.
Additionally, if your family income is below the recommended threshold, you are also eligible for $3,000 in the form of grants.
If you don’t qualify for the above-mentioned plans, you can also get a student loan from your province, based on your location and the school you are studying in (you have to apply 12 months prior). However, with these loans, you will start accruing interest as soon as the college ends. But the catch is that these interest rates are very low as compared to the ones that are levied on a credit card.
The Purpose of Student Grants in Canada
The Canadian student grants program gives financial aid to students who need aid for their education. The specialty of grants is that the amount does not need to be paid back like the loans. In the 2017/2018 academic session, more than half a million students got $1 billion in federal grants.
The grants that you receive depend upon your family’s income and if you are a full-time or part-time student. Full-time students can get up to $3,000 in an academic year. On the other hand, part-time students are eligible for receiving about $1,800 each year. If you have any kind of disability, you can also qualify for more government aid.
If the income of your family exceeds the limit for Student Grant requirements, you will not get this grant or a loan.
How to Get Government Financial Support as a Student?
In this finance tips for students in Canada blog, you will also learn about how you can apply for the aforementioned plans and support. To apply for the CSLP, you are supposed to apply in the province where you live. When you fill out the application, you will not need a second application for the Canada student grant as you are automatically applying for it too.
The rules and regulations for student financial assistance are different for each month. Hence, if you follow these finance tips for students in Canada, you will be able to keep up with the volatility of the changes. An example of these changes is when a permanent resident of Ontario goes for post-secondary education, they would have to apply through the Ontario Student Assistance Program (OSAP).
The financial aid program available in each province and territory are:
- Yukon student financial assistance
- Nunavut student funding
- Saskatchewan student loans
- Ontario student assistance program (OSAP)
- Quebec student financial aid
- Student financial services
- Prince Edward island
- Alberta Student aid
- British Columbia student aid
- New Brunswick student financial services
- Manitoba student aid
- Newfoundland and Labrador student financial services
- Nova Scotia student assistance
- Northwest territories student financial assistance
There are also different grants, bursaries, scholarships that you won’t be considered for automatically while applying for student aid. Hence, you should consult with your guidance counselor, university, or college financial support office to find out about the different grants that are available for you.
Before you take that step, one of the best finance tips for students in Canada is to prepare the following things in advance:
- RESPs and additional financial resources that are currently accessible by you.
- Social insurance number, parents’ or spouse’s SIN number.
- Parents and/or partners and your tax return details.
- Direct deposits and bank account information.
- The degree you aim to or are pursuing, name of college, start/end date, etc.
- An estimate of the total fees, expenses, food, rent, and other supplies for a year.
British Columbia, New Brunswick, Ontario, Saskatchewan, Newfoundland, and Labrador, provide grants and loans that are funded by both the provincial and federal governments.
On the other hand, in Manitoba, Nova Scotia, Alberta, and Prince Edward Island, the government and the British assist, while the grants are separately funded.
In Yukon, students get Canadian student loans and Canadian student grants, but the territory only provides the grants.
Meaning of Bursaries and Scholarship
Bursaries and scholarships are the type of student support you are not obliged to pay back. These scholarships are given by companies, charities, individuals, and are awarded to students for achievement or merit like academic excellence, sports, other extracurricular activities, etc.
In the case of bursaries, merit is the main factor. These are granted to students who are in dire need of financial assistance. The person for this is decided through applications that show that you are facing problems in paying fees all by yourself. You will need to disclose some personal information like student assistance, family income, living expenses, etc. If you can qualify for student loans, most probably you can qualify for bursaries too.
Bursaries and scholarships can be obtained in different ways. On assessment, these scholarships or bursaries will not look like much money, but if you get awarded many a bunch of them, you can collect a good amount to pay your fees.
How Do You Get Scholarships and Bursaries?
Scholarships and bursaries are awarded for specific and special circumstances. There are several scholarships and bursaries, from different local businesses, donors, and other big businesses, NGOs, universities, and colleges. The provincial, federal, and territorial governments also provide it.
You stand nothing to lose from applying for something. If you do not get it, then also you are not losing anything. Hence, before applying do plenty of research and you will be surprised by the different scholarships that you can apply for and reduce your burden.
Finance Tips for Students in Canada Who Cannot Get Financial Aid
There is a possibility that you are not able to get the student aid because you don’t meet the eligibility criteria, or you have exhausted all the available finance options. But you still have financial needs. In such a case, you can apply for personal or credit loans. You can apply for this through banks or financial institutions.
This option enables you to pay for anything from fees to expenses to tuition supplies. The amount that you take out as a loan depends on your needs, and the level that you are looking to study at, and there is always a threshold on that total amount that you can take out as a loan.
If you have a pre-set credit limit and want to take up a student line of credit, you will be needed to pay back what you borrow with the amount of interest that is added onto it. However, the interest on the credit line of students is much lower than that of the generic line of credit. Also, you must remember that you need to pay the interest immediately when the money is withdrawn.
In the case of personal loans, you will have to pay the total amount that you borrowed, the interest, and any accumulated fees.
The semester can start anytime, hence, you should always be prepared in advance. You need to fill out the application before time, so you have a first-mover advantage and can easily fund the starting classes. Discuss with your family, and check your personal finance to find the best course of action for you. Also, look for part-time jobs so you can further live with ease.
You need to keep applying and not lose your spirit. When you apply for student aid, you are only increasing your chances of studying your dream course and taking your plunge to the future a step further. Hence, the burden of paying hefty tuition fees can be averted.
Be it a loan or a grant, it is always a smart choice to keep your options in check before you apply for courses. You should be aware of the assistance available to you and how you can lucratively use it. Following these finance tips for students in Canada, can make your future better, and your studies less burdensome. Wishing you all the best!