This is the time of year where high school graduates (and parents) are busy preparing for their first year of college. The cost of education continues to rise so, unless you win the lottery, you`ll have to find out how to pay for college in other ways.
Here are 6 ways to finance your post secondary education:
How To Pay For College In Canada
Get a Part-Time Job
It may not be a new thing to work your way through school since many students have had part-time jobs during their teenage years.
Finding the balance between making money and studying is the key to success. Talk to your faculty advisor about how intense your study load will be before signing up for more hours of work than you can handle. Look for part-time jobs on or near campus to cut down on travel time. Campus services like the computer labs, arts or sport & recreation facilities pay decent wages and are always looking for part-time workers.
*Insider Tip – One of the best money saving tips is to contact Housing Services about working as a residence advisor. You’ll get a big reduction on the cost of your room and meal plan on-campus, plus some extra money every month.
Talk to Your Parents
Your parents are an important source of money for your college education, but it may be challenging getting them to commit to a specific dollar amount. Unfortunately money is still a taboo subject in many households, but don’t leave the issue of how to pay for college to assumption.
Show them you are serious about figuring out how to pay for college:
- List all of your estimated expenses for the year
- Include your contributions from current savings or future job income
- Talk about what they’re able to contribute
- Get a commitment from your parents and make a commitment to them.
*Insider Tip – Parents should talk to their children early about their plans for post secondary education so that they have time to adjust their savings strategy if needed. Don’t assume that your child will attend the local college when they have aspirations to leave home.
Scholarships, grants and bursaries can be a great source of funds to help pay for college. The money is free, but you still need to qualify.
Scholarships are typically awarded for academic excellence, but some scholarships also consider extracurricular activities, athletics and your other achievements. Therefore it is crucial that you buy books that are most relevant to your chosen subject and study them thoroughly as it will help you clear any scholarship exams needed to get your awards.
Bursaries are awarded to students who have a genuine need, such as a permanent disability or being a single parent.
Grants are usually paid out by the provincial or federal government, or even through private corporations, and are also based on financial need.
*Insider Tip – Apply for everything that even remotely describes your situation. Dozens of scholarships and bursaries go unawarded each year simply because students didn’t apply for them.
Apprenticeship and Co-op Programs
With a co-operative education program or apprenticeship program you alternate studying with study-related jobs. Students will likely find it easier to pay for college in this type of program since they’re earning a paycheque at least part of the time while they’re in school.
The other benefit to working with a co-operative or apprenticeship program is that you are learning important job skills that employers are looking for while you’re in school. This will give you a head-start in the labour market when you graduate.
*Insider Tip – Go to the online co-op program directory for a listing of the post secondary co-operative education programs in Canada.
Government Sponsored Student Loans
Many students need assistance to pay for college and can apply for student loans through the federal and provincial government. You need to apply each school year, and your application is assessed according to your needs using this formula:
Allowable Expenses – Resources = Assistance (loans or grants)
When you borrow money through the government sponsored student loan program you are not required to pay interest while you are enrolled in full-time post secondary studies.
The student loan program is intended to supplement your funding from other sources: your job, your savings, your parents or spouse/partner, and scholarships.
When you graduate or leave full time studies you have a six month grace period before you have to start making payments on your student loans.
*Insider Tip – Even if your parents are providing little to no assistance to your post secondary education expenses, their “ability to contribute” is still taken into account when determining your eligibility for a student loan. In this case, consider moving away from home to attend University in another city. Your parents’ income will have less of an impact on your application.
Student Line of Credit
Most banks also offer loans to students, but their terms are quite different from government sponsored student loans.
- The interest rate is not regulated like government sponsored student loans, and may be higher
- Interest accrues immediately following a withdrawal, whether you’re enrolled full-time or not. Depending on the loan terms you may be able to make interest-only payments up until 6 months after you graduate.
- You will likely need a co-signer on the loan, who will be responsible for the debt if you are unable to repay it.
- You won’t have access to debt management tools like interest relief programs.
- You won’t be considered for any government sponsored grants or bursaries.
*Insider Tip – You are not eligible to claim the 17% tax credit on the interest portion you pay on your student line of credit. This tax credit is only available if you have government sponsored student loans.
When it comes to finding out how to pay for college, set your alarm early. Talk to your parents about their expectations for financial assistance through post secondary. Learn about all of the different loans and scholarships available. And start your own savings plan years before you need to pay for your tuition.
After all, if you can’t count on yourself to make your future happen, who can you count on?
Check out The RESP Book to understand how RESP accounts work and how to get one started, what kind of RESP account to set up and what kind of investments to buy.