TORONTO – The first day of August may seem like a long way from the first day of school, but there’s one thing students heading to university and college should be thinking about starting now: money.
If you’re not willing or able to bankrupt mom and dad, it’s important to start thinking about your upcoming expenses: tuition, food, and—perhaps on the forefront of many young minds—fun. And college fun can cost a lot more than high school fun, which might mean taking out a loan.
“If a student has a reasonable expectation that they are going to be able to repay that loan, then yes, instead of relying on their parents, getting a loan to assist in getting that education…they’re taking the burden away from their parents,” said Brian Pritchard, trustee in bankruptcy and senior vice president for BDO Canada Ltd.
“But it’s also important for them to do their own budgeting and not use the loan for things that some university students might–going to bars, etc. So I think budgeting is a huge component of it. ”
BDO Canada, which is a financial recovery services practice, and FCAC have some tips for post-secondary students to manage their money and pay off loans:
- Create a budget that includes reducing paying your loan as an expense and track all spending against it. Try the “student budget worksheet” (also available as a downloadable interactive calculator that does the math for you) from the FCAC website here.
- If living away from home, share expenses with roommates for common grocery items (cleaning supplies, milk, butter, eggs, etc.)
- Keep a study calendar and allocate time for “fun” each week
- Take advantage of special student rates at movie theatres, banks, grocery stores and public transit and sign up for the International Student Identity Card for more discounts
- Use coupons, look for bargains and shop around for the best deal
- Work part-time (on or off campus) and designate a specific amount of earnings to pay down a loan
- Use birthday money, income tax refunds or tax credit cheques to make lump sum payments in order to save on interest-accrued loans
- If you’re offered more money than you need in a loan, request a lower amount to keep debt down
- Be wary of credit cards, especially if you’re not diligent about paying off your balance in full each month
- Opt out of health and dental coverage included in your tuition if you’re already covered elsewhere
- Sell old textbooks and buy used books when possible
- Take advantage of tax deductions and tax credits for students for things like tuition fees, books and moving expenses
- Live at home for school—this can save an average of $25,369, according to FCAC
It’s important to remember that a loan is a serious financial commitment—not a freebie. So why not also try your hand at some free money?
Grants, bursaries and scholarships may take some time and effort to research and apply for, but unlike a loan, you won’t have to pay it back if you win.
Here are some sites that can help you find grants, bursaries and scholarships you could be eligible for:
- StudentAwards.ca – Scholarships, bursaries, contests, specialized student offers, giveaways and other financial assistance as well as a student forum and expert content with advice on a variety of student-related topics. There’s survey contests, literary prizes for writing submissions and parliamentary internship programs.
- Canlearn.ca – Canada Student Grants are offered through governments, schools and private organizations in most provinces and territories except Northwest Territories, Nunavut and Quebec (those governments have their own programs). Categories include grants for students from low or middle-income families, students with dependants, or those with disabilities. There are also apprenticeship grants for training on-the-job, or money for Canadian students who want to travel abroad.
You can also check out your chosen college or university’s website for any scholarships they offer, as well as your parents’ employers. For example, Staples Canada offers three scholarships to employees and their children.
Pritchard stressed the importance of focusing on getting a job if you’re taking out a loan to pay for school.
So think about why you’re going to school and where it will lead you, then be sure to budget and explore options for grants, scholarships and bursaries before signing up for a loan.
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