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May 24, 2016 | By: Kerri Barreca

How to Make Student Debt Not So Scary

Student Loans

After all the fanfare, caps, gowns and degrees, comes the heavy realization of that large looming student debt.

Scary, but repaying your student loan debt has to happen sometime. Graduating from post-secondary education with student debt can seem burdensome especially when you are fresh out of school and still unemployed or are low on the pay scale at your first full time job.  But there is hope!

"New changes to tuition loans and grants are underway in Ontario." 

Start Saving for University Early

Firstly, it’s is never too early for future students (and parents of future students) to start planning for their education goals.

Registered Education Savings Plans (RESPs) are a great way for family members to help save funds for university or college, tax free. Parents, aunts, uncles and grandparents can all contribute to a child’s RESP.  It may end up being a more meaningful and helpful gift than another stuffed animal or a baseball cap. By opening an RESP you may also be eligible for other government aid like the Canada Learning Bond or Canada Education Savings Grants.

These programs are offered for low income households. To open an RESP today go to SmartSaver.org.  It’s a quick, easy process and you don’t have to contribute anything right away.

Take Advantage of Restructured Tuition Loans and Grants

New changes to tuition loans and grants are underway in Ontario. According to the Globe and Mail,  the federal liberal government will be cancelling the education and text book tax credits in favour of a revised and improved Canada Student Loan Program.  Ontario will follow suit with changes for families that earn less than $50,000 a year with the hope of making post-secondary education more accessible to low income households.  However, these changes are not linked to tuition levels.  When the current 3 percent cap on raises in undergraduate tuition expires in 2017, government aide may again fall short of education costs.   

"Be warned that student loans cannot be included in insolvency options within seven years of leaving school..."

Get an On-Campus Job

For current post-secondary students, make sure to take advantage of opportunities like on-campus jobs to help cover living expenses so that your loan or grant will stretch a little farther. These types of positions are also a great way to get involved in campus life.

I myself was a Resident Assistant years ago. Being an RA was a great opportunity to help other students; it lowered my living costs and was a great addition to my resume.  Other work/study opportunities may include working at the bursar’s office, student centres or information desks.

There’s sure to be a job that fits your interests and class schedule.

Inquire About Hardship Programs

Once graduated, you are generally expected to start to repay your student loan to the government after a 6 month grace period.  This hopefully gives you enough time to find a stable working position (maybe in your field but not always) before interest and payment schedules begin.

In the event, your financial situation changes at any point during your loan repayment and you are struggling to continue with payments, make sure to contact the loan centre and inquire about the hardship program with OSL.

Be warned that student loans cannot be included in insolvency options within seven years of leaving school so it’s best to speak with them early on to see how they can help you.

While you may fear that furthering your education will cost you an arm and a leg, keep in mind all the options and services available to you.

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