Affording College

Ensuring you can continue your education without facing debt problems

Rising tuition fees and the prevalence of loan-based financial assistance has led Canadian student debt to increased levels. In 2014, 425,000 students were forced to borrow money in order to finance their education, according to the Canadian Federation of Students. With a multitude of loans being disbursed by the Canada Student Loans Program, student debt in Canada is increasing as quickly as $1 million per day. Here’s some more numbers on Canadian student debt:

  • A 2013 study by TD Bank found the average Canadian student debt load sits at $27,000.
  • According to Statistics Canada’s Survey of Financial Security, student debt grew 44.1 per cent from 1999 to 2012, or 24.4 per cent between 2005 and 2012.
  • In September 2010, the amount of student loans owed to the the Government of Canada surpassed $15 billion dollars. Worse, this figure does not include an approximated $5-8 billion in provincial student debt or personal debts, such as credit cards, lines of credit and family loans.

Impacts of debt on Canadian graduates

Financial issues are only part of the most commonly sited consequences of debt acquired from post-secondary education debt. Other issues include:

  • Debt Aversion – Many potential students choose not to pursue post-secondary education because of financial setbacks. In a study by the Canadian Federation of Students, one in four graduates cited accumulation of debt as their main financial reason for not pursuing post-secondary education.
  • Mental Health – Accumulating debt can also have a significant impact on the likelihood of completing a course of education. As many students find jobs to pay back their borrowing, academic commitments become harder to keep. Statistics Canada’s Youth in Transition Survey (YITS) found that of those who cease their studies early, 36 per cent do so for financial reasons.
  • Career Choice – In Canada, student loan repayment starts right after graduation, forcing graduates to make employment decisions based on what can best contribute to paying off their loans. Student loan obligations reduce the ability of new graduates to explore career-related volunteer experience, or take lower paying “foot-in-the-door” kind of work to build experience.

Plan Ahead and Do Your Homework

A great starting point is to research schools, scholarships and grants well before its time to apply to your choice of school. Consider attending a local school to save on costs of staying in residence. A good place to start researching student aid is https://www.canlearn.ca.

Apply for financial aid

Apply for financial aid as soon as you can to beat the deadlines. To seek financial assistance, students must apply through their own Province or Territory. Use the following chart to contact the financial aid service provider for your area:

Province or TerritoryFinancial Aid Service
OntarioOntario Student Assistance Program (OSAP)
SaskatchewanSaskatchewan Student Financial Assistance Branch
British ColumbiaStudentAid BC
New BrunswickNew Brunswick Student Financial Services
Newfoundland and LabradorNewfoundland and Labrador Student Financial Services
AlbertaStudent Aid Alberta
Nova ScotiaNova Scotia Student Assistance
ManitobaManitoba Student Aid
Prince Edward IslandPrince Edward Island Student Financial Services.
YukonYukon Student Financial Assistance

Here’s what you may be offered

  1. Loans – Student loans make up the majority of most student aid packages. In Canada, they are made through your local province or territory service provider. There are two kinds of loans: subsidized and unsubsidized loans. With subsidized loans, the government pays back the interest while you are in school, up until the end of the grace period. Unsubsidized loans, on the other hand, means you are responsible for paying back all interest that accrues after the loan is disbursed.
  2. Work study loans – Some provinces may give students the opportunity to work part-time to earn money for college/university expenses. These jobs are often on-campus jobs and sometimes relate to your field of study.
  3. Grants – A grant is money that you don’t need to pay back. When you apply for student financial assistance, your eligibility for most Canada Student Grants will be automatically assessed. You may also be eligible for more than one grant at a time.
  4. Scholarships – Scholarships are free money awards for students based on academic achievements, field of study, minority group membership and GPA. Contact your school’s financial aid office or website for application requirements. Make sure to beat the deadlines.

Beware of scholarship scams

Look for these tip-offs, they may indicate that the “scholarship” is really a scam

  • “The scholarship is guaranteed or your money back”
  • “You can’t get this information anywhere else”
  • “We will do the work for you”
  • “I need your credit card or bank account number to make a deposit to hold this scholarship.”
  • “The scholarship will cost some money.”
  • “You’ve been selected by a ‘national foundation’ to receive a scholarship”, or “You’re a finalist” in a contest you never entered.

Get ready to start saving early

The earlier you can start saving for your child’s education, the better. Here are a few popular options:

  1. Registered Education Savings Plan – An RESP is a tax-deferred investment plan that can help you pay for a child’s post-secondary education. It provides direct government assistance to help you reach your education savings goals for your children.
  2. Canada Learning Bond – The Canada Learning Bond (CLB) is a grant paid by the government of Canada to assist low-income families with saving money for their children’s post-secondary education. The CLB relies on the National Child Benefit program to determine which families may be eligible.
  3. Canada Education Savings Grant – The grant is money that the Government of Canada will add to your child’s savings in an RESP. The grant has two parts
    1. Basic Canada Education Savings Grant – The Basic Canada Education Savings Grant will give you 20% on every dollar of the first $2,500 you save on your child’s RESP per year.
    2. Additional Canada Education Savings Grant – Depending on your net family income, you may receive between 10%to 20% on every dollar of the first $500 you save in your child’s RESP each year.

A Part-time job will help you earn extra credit!

Remember that you will benefit from tuition reimbursement by working a job. Some employers will even be willing to pay for all or part of higher education expenses, letting a student work through college and avoiding taking on debt. If possible, look for work related to your career goals. This will help you build relevant skills, contacts and experience that are needed to help you land your dream job post-graduation.

Don’t let debt put off your children’s plans

If you are strung with high credit card debt, it’s almost impossible to start saving the money you need for your child’s education. If you are struggling to stay on top of your finances and you are worried you won’t be able to afford your child’s education, we can help. Call one of Consolidated Credit’s trained credit counsellors at , or you may request a Free Debt Analysis online.