Student Loan in Canada: What Every Student Should Know!
In today’s world, education is the key to success in any career. A university degree not only provides academic knowledge but also helps you build crucial job skills and impress future employers. However, pursuing higher education is costly for most people. In fact, students are one of the largest groups of loan users in Canada.
In addition to tuition fees, more and more students need to take out student loans to pay for other expenses such as housing, food, and books. If you are also planning to pursue your post-secondary education and take on student loans as well, read on to know everything about student loans in Canada!
What is a student loan?
A student loan is a money you borrow from a bank or other lending institution to pay for your education. Unlike a scholarship, which is free money, you must pay back a student loan with interest. Student loans are available to both domestic and international students. Student Loans are a way of financing your post-secondary education (universities, trade schools, or other colleges). You can get a student loan whether you are Canadian or not. The money is given to you in a lump sum, and you must pay it back, usually with interest.
Types of student loans in Canada
There are several types of student loans in Canada. Here’s an overview of each of them:
- Federal student loans: These are given by the Government of Canada. They may have a low-interest rate and flexible repayment terms. The amount you get depends on your financial situation, your career, and the field of study you choose. You can apply for these loans through Canadian financial institutions, the National Student Loan Service Centre (NSLSC), or the Government of Canada website.
- Quebec student loans: These are available only to Quebec residents. The amount, interest rate, and repayment terms are the same as federal student loans. If your first language is English, you can also apply for a federal student loan.
- Forgivable student loans: These types of loans are given by non-profit organizations like the Canadian Government. Forgivable loans do not need to be repaid, provided that you meet certain conditions. For example, you may be required to work in an under-served field, such as public health or education.
Repayment and forgiveness of student loans
We mentioned the importance of saving for your education, but you might be wondering if you can get a loan to cover the costs. The answer is yes, but before you apply, know that you’ll need to repay the loan with interest. Here are some things to also consider when taking out a student loan:-
- What kind of student loan do you have?
- What is your interest rate?
- How much do you have to pay each month?
- How long will it take to pay off the loan in full?
- What are your other repayment options?
- Student loans are usually repaid after you graduate and get a job. Depending on the type of loan, the repayment terms may vary. For federal student loans, the repayment period is 10 years. For Quebec student loans, the repayment period is nine years. While there aren’t any forgiveness programs for student loans in Canada, some Quebec student loans are eligible for cancellation after 25 years of continuous payment.
How to get a student loan in Canada?
Of course, when you’re deciding where to go to school, the cost is a consideration. So, before you make a final decision, you should find out how much you’ll need to pay for your education. You can do this by using the government student loan estimator. Once you know how much you’ll need, you can start looking for a financial aid office.
Here are a few things to keep in mind when looking for student loans:
- Find out if the school offers student loans – Not all schools offer financial aid, so make sure your school is one of them.
- Apply for financial aid as soon as possible – Some schools have an early deadline for financial aid applications, so make sure you fill out the application as soon as possible.
- Have your financial aid application ready – To get a student loan, you’ll need to fill out paperwork. Make sure you have all the required documents ready before you start applying.
Tips for managing your student loan
Living on a student loan is challenging. However, you can apply for other financial aid programs to ease the burden. Here are a few ways to manage your student loan:
- Choose a less expensive field of study – Some post-secondary programs are more expensive than others. Make sure to do your research, and choose a field of study that is within your budget.
- Apply for as many scholarships as possible – Scholarships don’t have to be repaid, unlike student loans. So, try to apply at least once during the application period. Some scholarships are specific to the field of study, while others are based on academic performance.
- Get a part-time job while in school – A part-time job will help you earn extra money while in school. You can use the extra money to pay off your student loan faster.
Choosing to go to college or university is a big decision, but it’s one that can help you get the career you want and earn more. However, education comes with a price, so it’s important to start saving for it as early as possible. If you’re a Canadian citizen and meet the eligibility requirements, you can apply for a Canadian student loan to cover the costs of your education.
Be sure to choose the right program based on your career and level of education. In addition, you should consider looking for scholarships and getting a part-time job to help pay for your education.