Millions of students in Canada have student loan debts. As of 2018, Canadian students collectively owed $28 billion student loans to all government levels (federal and provincial governments). This kind of debt is alarming and may result in a debt crisis in Canada.

As a student, you can use many ways to avoid student debts. While it's easy to qualify for student loans in Canada, it will be a great idea to consider other funding options before taking out loans to finance your education.

In this guide, we explore some of the useful options that can help you fund your education without getting into debt. But if you already have a student loan, worry less. You'll get to learn some of the best ways to settle your debts faster and more efficiently.

Funding Options for Higher Education in Canada

There are many funding options you can use to pay for your college or university tuition fees in Canada. Some of them include:

  • Scholarships and bursaries
  • Government grants
  • Parents’ savings

1.    Scholarships and Bursaries

Many learning institutions and companies offer scholarships to eligible students studying in Canada. An excellent example is the Knowledge First Financial scholarships.

However, scholarships are highly competitive. You must have an outstanding academic performance to increase the chances of getting such opportunities.

Thankfully, the Canadian government also provides many scholarships to both domestic and international students. Some of the government-sponsored awards include:

  • Canada Graduate Scholarships – Master’s Program
  • NSERC Postgraduate Scholarships
  • Banting Postdoctoral Fellowships

Some colleges and universities also offer partially-funded scholarships to their students. You should always check the website of your learning institution to find out if they provide financial aid to students. Apply for such support while expressing your financial needs.

Besides getting scholarships, you can also apply for bursaries from the government. One good thing about scholarships and bursaries is that they are non-refundable.

Also read more about at Marc Mitchell Ravenscroft.

2.    Government Grants

Both the federal and provincial governments offer education grants to Canadian students. The Canada Student Grants Program (CSGP), issued by the federal government, is a great example of such grants. They are awarded based on a student's financial needs.

However, you can only qualify for the CSGP when you are eligible for the Canada Student Loans Program. So, the grant will help you pay part of your tuition fees when you take out the Canada Student loans, which should be the last option to consider.

Notably, some Canadian provinces also offer education grants to Canadian students. For instance, if you live in Ontario Province, you can receive grants from the Ontario Student Assistance Program (OSAP). You don’t need to pay back the money.

3.    Parents’ Savings

In Canada, most parents save for their children’s post-secondary education in Registered Education Savings Plans (RESPs). This move has helped many Canadian students avoid taking out student loans. You can ask your parents if they ever saved in an RESP.

As a government-sponsored plan, an RESP comes with numerous incentives such as:

  • Guaranteed Canada Education Savings Grants (CESG)
  • Tax-free growth of parents’ investment during the entire savings period
  • Parents can also apply for the Canada Learning Bond (CLB)

When parents open RESP accounts for their kids and start saving, the government offers each beneficiary a 20 percent CESG on contributions up to CA$2,500 per year. In other words, all plan-holders have a maximum annual CESG entitlement of CA$500.

Useful Tips for Paying Off Your Student Loan Debts

Paying back student loans can be quite overwhelming, especially if you don’t secure a job right after graduation. If you have a student loan, you need to consider these tips.

1.    Take Full Advantage of the Grace Period

The Canadian government usually offers a 6-month grace period to students with student loan debts upon completing school. If you start earning some good income immediately after graduation, you don't have to wait for the grace period to elapse to start paying.

2.    Apply for the Repayment Assistance Plan (RAP)

If the grace period elapses but you still don’t have funds to offset your student loans, you can apply for the RAP. The government may forgive your loans or lower your payments based on your financial situation.

3.    Request for a Repayment Extension

The standard repayment term for the Canada Student Loans is 9.5 years (114 months). However, if you cannot settle your debt within that period due to financial constraints, you can extend your loan repayment term up to 174 months.

Get more information at Martin Polanco

Final Words

If you are looking for the most reliable way to fund your education, you should first apply for scholarships and bursaries. But if you opt for a student loan, you should make a smart repayment plan. You need to start repaying your loan once you graduate to avoid getting into multiple debts. Failure to make payments on time may attract penalties.

Author's Bio: 

I am Lucy Jones