How to pay for your education
Loans, scholarships and part-time jobs can help fund studies
Higher learning is bringing higher costs.
But would-be students still have plenty of ways to fund their educations, from student loans to scholarships, grants and lines of credit.
“It’s unbelievable just how much funding there is out there,” says Brian Betz, a counsellor with Money Mentors.
The Calgary-based nonprofit helps individuals manage debt, typically once repayment becomes problematic.
And Betz says Money Mentors works with a lot of students who are struggling with debt-loads after they graduate.
But he’d much prefer to see them before they finish school, he says. Even better, they should avail themselves of Money Mentors’ free services before they even attend school and start borrowing money. That way, they can learn how to budget and all the other essential financial literacy tools to reduce the burden of borrowing.
Developing a financial plan before school has never been more important, especially with tuition for an undergraduate degree in Calgary fast approaching $6,000 a year and trades and technical training ranging from about $1,000 to more than $17,000 a year.
Financial planner Amanda Hellmer, manager of Servus Credit Union’s Mount Royal branch, says often the first step to paying for school is looking to existing savings sources, ideally a registered education savings plan (RESP).
“The earlier you start saving in a RESP, the more you can take advantage of government grants.”
She adds the Canada Education Savings Grant is a 20 per cent top-up on contributions to a lifetime maximum of $7,200 per child. But this is generally a tool best used by parents of children who are years away from enrolling.
Those just months away from enrolment without an RESP often need to look at loans, as well as bursaries, grants and scholarships.
Hellmer says unlike loans, the other sources do not have to be repaid.
“We often direct members to the web to see what’s available,” she says. “I went onto albertascholarships.ca and then studentaid.alberta.ca and was blown away by how many scholarships, grants and bursaries there are.”
Students who need loans are eligible for up to $7,500 from the government per semester for most programs (loans are even more substantial for professional programs such as dentistry). The loan amount often depends on personal income and need for expenses (i.e. living on your own while attending school).
Betz says studentaid. alberta.ca is a good resource to learn more about student loans. a year over a four-year program. Hellmer says students only pay interest on what they borrow, usually at prime plus one per cent.
“Once they finish school, we set up a set monthly repayment program.”
Betz says getting a line of credit can be helpful, but he adds that lines of credit and credit cards should be used with caution. The best way to limit debt through school is by creating a monthly budget, evenly allotting student loans, savings and other income to cover regularly occurring and variable (i.e. emergencies) costs.
“Otherwise, people tend to underestimate needs or spend too much early on,” he says. “And by March they’re living on peanut butter sandwiches.”