Money hacks for students

How to pay for school AND have a life.

Being a student is?getting more expensive every year . Student life means paying for tuition, textbooks, housing, food and more – all without a full-time income. Throw a pandemic and some record-breaking inflation into the mix and it’s no wonder students are feeling anxious about their finances.

We want to ease the pressure. In this blog, we’ll walk you through financial aid options and include best practices for paying back your loans. Plus, we’ve put together tips for building healthy financial habits so you can prepare for the future.

Financial aid options

Ideally you want to borrow as little as possible for your education. Before you borrow, find out if you’re eligible for scholarships , bursaries, or?grants ?– which are available through the Government of Canada, your province or territory , and even your school. This is free money that you won’t have to pay back and which can significantly reduce the amount you’ll have to save or borrow for your education. Also, check out sites like ScholarshipsCanada ?that make it easier to find available scholarships.

As far as loans go, funding for post-secondary education can come from three different places...?

Federal government

The Canadian government offers assistance to part- and full-time students through the Canada Student Loans Program ?(CSLP). This Student Aid Estimator ?shows you how much you can get in financial aid based on factors ?like your family income, the cost of your tuition, and where you live.

There’s a limit on how many weeks you can receive student aid for (called a lifetime limit) and your loan doesn’t start accumulating interest until you reach it — for full-time students,?that limit is 340 weeks .

You also don’t have to start paying back the loan until 6 months after you graduate ?— although if you wanted to start early, you could.

In 2021 the Canadian government froze the accumulation of interest on student loans ?until March 31st, 2023. This is really good for students because it means your loan won’t accumulate any interest until then — even after you’ve reached the lifetime limit. You can take the opportunity to relax on payments or get ahead, depending on your cash situation.

It’s a good idea to apply for student aid at least two months before ?the start of your program so you can get your funding on time if you’re approved. You can check out the full details of the application process and eligibility requirements here .

Provincial or territorial government

If you’ve maxed out federal benefits or don’t qualify for them, you might be able to get student aid from your province or territory. In order to apply for both federal and provincial loans, you only need to apply through your provincial or territorial government. You can find a list of all the student aid offices here .

If you live in Alberta, Nova Scotia, Manitoba, or PEI ?and have student loans, your funding might have come from both the Government of Canada and your provincial government, which means you have two loans and two loan payments — consider if you’ll be able to handle two debts and two payment schedules once it’s time to pay them back.

Banks/private institutions

If you don’t qualify for federal or provincial student loans but still need financial aid, you can apply for a student line of credit at your bank. A student line of credit is a type of loan that lets you borrow money repeatedly up to a pre-set limit . Your limit is determined by the bank and can vary depending on your program of study, what school you’re attending, your credit history, and living expenses. Keep in mind, you may need someone (like a parent) to co-sign your application.

You can borrow from your line of credit, pay it back, and then borrow again, up to your credit limit — and you only pay interest on the money that you borrow. For example, if your line of credit has a $10,000 limit but you borrow $3,000, you only have to pay back the $3,000 plus interest.

Unfortunately, while you’re in school you do have to pay back at least the interest, but once you graduate most banks let you keep paying?only?the interest for a grace period of 6-12 months (or more). However, you can pay back the principal at any time, even while you’re still in school.

After the grace period, you have to pay back both the money you borrowed (the principal) and interest. Some student lines of credit ?turn into student loans with monthly payments after the grace period.

Everyone’s financial situation is different, so make sure you do your own research before applying for any loans or grants. It’s also important to know your rights when it comes to loans — you can find more info about that here .

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