Thinking about how you’re going to pay for your future education can feel like A LOT. It’s really expensive. We get it. You’re making a big investment in yourself (or your kid) by deciding to go to college, university or trades school but studies do show that investment pays off in the long term, through higher salaries and lifetime earnings.
Whether you’re a parent looking to help out your kid or a student taking on financing school yourself, there are a lot of costs, from tuition, to rent, to food and textbooks, that you’ll need to cover. Still, who can think about those future benefits we just mentioned when your bank account doesn’t have the wiggle room to cover the things you need to pay for today?
Enter the student loan.
What is a student loan?
Simply put, student loans are money you can borrow from the government (federal and provincial), or the bank, to help pay for school. Eventually you’ll need to pay this back but only after you’ve wrapped up at school. More on that below.
What are my options?
From the Federal government, you can receive student aid through the Canada Student Loan Program and the Canada Student Grants program, but you should know that they’re not offered in every province. Student loans you will need to pay back, student grants are money that you are given to pay for school that you do not need to pay back.
Each province and territory also offers provincial student aid, which tops up the money you get at the federal level. To make things slightly easier from an application perspective, you will apply for, and be assessed for, both federal and provincial student loans and grants in one place - the provincial student aid service that manages student grants and loans. THIS page has a list of each one in Canada!
How much can I get? A great question! How much you get depends on a few things:
The province or territory you live in
Your family income
Whether other people rely on you for income or care
Your tuition fees and living expenses
Whether you have what the government considers to be a
You can check out THIS financial aid estimator from the Government of Canada, that will help you understand how much funding you may be eligible for.
To see how much you can get from the province or territory you live in, check your local financial aid estimator, which is available online. Just do a quick search!
Great, how do I apply?
Head over to your province’s student aid website to apply. Fire up the search engine again and type in the province or territory you live in and “Student Aid” or “Financial Assistance”. You should be able to find what you’re looking for pretty fast!
On the website, you’ll see a link to apply - it’s just one application for your provincial and federal loans. Don’t forget, you need to apply for the loan program again every year you’re attending school.
Can I spend this money on anything?
The money you get from your student loan is generally meant to be used to cover costs associated with education, like tuition, books, living and commuting expenses. But… if you need to use it to cover the occasional dinner out with friends you won’t get in trouble but you need to remember to…
Pay your loans back!
So while you’re still going to school, the loan is free. And because not all of us are lucky enough to graduate with a job, it’s also interest free for 6 months after you graduate. After those 6 months though, interest starts to accrue, and you need to start paying back the loan.
Overall, it might take 9.5 to 10 years to pay back a student loan, some will do this quicker, some it may take longer. Don’t stress but do try to make your minimum payments and whenever possible pay down extra quicker so you’re making a bigger dent in the . If you’re just paying off the minimum amount a lot of time that is going to the interest (aka the money you’re getting charged ON TOP of the principal).