Are you thinking of earning a first diploma or going back to school? You may have access to the loans and bursaries program and other types of financial assistance. Find out how they can help pay for your education!
Pay for your studies
To pay for your studies, you can obviously find yourself a part-time job. This will allow you to earn money, but also experience. On the other hand, if your schedule is too busy, you risk exhausting yourself and your studies could suffer. Here are some other ways to help you pay your bills.
Loans and Grants
The financial assistance offered by the Onebec government depends on your needs, your income and that of your parents or your spouse. You will receive a larger amount if you have dependent children, for example.
Go to the website of the Ministry of Education and Higher Education. A simulator will help you estimate the amount you will receive in loans and grants.
Here are some important details to know.
- If you are awarded a scholarship, you do not have to repay it.
- If you get a loan, it will be made by a financial institution, but will be guaranteed by the government.
- You will not be charged interest on your loan while you are in school.
- After your studies, you will be entitled to six months before you start to repay your loan. On the other hand, interest begins to accumulate as soon as you finish your studies.
- The interest rate you will pay on your loan will be equivalent to the business rate plus 0.50%. This equates to 4.2% currently.
- At the conclusion of a repayment agreement with your financial institution, you will be able to obtain a fixed rate. It will then correspond to the fixed mortgage rate for the term chosen. The agreement cannot be modified before its term without the agreement of the financial institution. Better to assess your financial situation before concluding it!
Registered Education Savings Plan (RESP)
RESPs are a great way to save for post-secondary education. Governments will pay you grants equivalent to 30% of your contributions. Low-income families can even receive up to $ 2,000 without paying a penny.
To benefit from this, the RESP must have been opened at later than the year in which the young person reaches 15 years of age. Then it is no longer possible to receive grants.
Find out more about the Registered Education Savings Plan (RESP).
Lifelong Learning Plan
If you want to go back to school, you can use your registered retirement savings plan (RRSP). The LLP allows you to withdraw up to $ 20,000 ($ 10,000 maximum per year) without paying tax. Barring exceptions, you must be a full-time student to qualify.
Don’t have an RRSP and want to open one to take advantage of the LLP? Your contributions must remain in the RRSP at least 90 days before you can make a withdrawal.
Once you have finished your studies, you will have to repay the amounts in your RRSP. The amount will be 1/10 of the withdrawal for 10 years. If you fail to do so, this amount will be added to your income and will be taxable.
The LLP cannot be used by a parent to pay for their child’s education.
Financial institution line of credit
Several financial institutions offer lines of credit intended specifically for students. The credit limit offered varies according to your profile, especially your field of study. It can sometimes reach very large sums, up to $ 300,000!
When you use your line of credit, you have to pay interest on the amount borrowed. And this, as soon as you use the funds! The interest rate is generally higher than for government guaranteed loans.
In some cases, financial institutions offer a delay, after your studies, to start repaying. However, you must continue to pay the interest.
Several organizations offer scholarships depending on a student’s academic record, financial situation or specific project. Here are some places to find them:
- UQAM directory
- Onebec universities network
- Government of Canada
- Tele-University student association
The financial aid for studies at your educational institution can also help you.
With a few exceptions, including scholarships for postdoctoral studies, scholarships received are not taxable.
A few boost
Other measures can also help you balance your budget. Here are a few.
Deferred reimbursement program
Are you in a difficult financial situation after your studies? You could take advantage of the deferred reimbursement program. While you benefit, the government will pay the interest on your loan. You will not have to reimburse him this amount.
The period covered by this program is usually six months. If you wish to take advantage of this for a longer period of time, you will have to make a new request.
This program aims to allow you to repay your student debt despite your difficulties. Your monthly payments will take into account your financial and family situation.
This program is only available for loans made under the loans and bursaries program. It is not applicable for a line of credit or other debt.
Tax deductible interest
Have you obtained a loan under the government’s loans and bursaries program? Interest paid entitles you to a tax credit, both provincial and federal.
Certain tax credits are intended for students and their parents. Here are the main ones:
- Tuition fees (federal)
- Tuition or examination fees (provincial)
- Amount for children attending post-secondary studies (provincial)
Are you getting 40 kilometers or more from your new place of study? Some moving costs could also be tax deductible!
Have you won a scholarship under the government’s loans and bursaries program? Did you complete your studies on time? You may be entitled to a debt forgiveness for your loan!
The amount corresponds to 15% of the loan you received during your study program. In other words, if you had $ 10,000 on loan, the government will give you $ 1,500! This amount will be paid directly to your financial institution to repay your debt. Have you already reimbursed it? The balance will be returned to you. You have three years after the end of your studies to apply for it.
Combining these different means will certainly help you pay for your studies. To avoid going into too much debt, you should keep track of your spending. Budget and use different tips to save money. You can make sure you make the best possible use of your loans and grants!