Student loans are great when you’re in college or university – they can take a financial load off your back and let you concentrate on your studies. But they can also become a burden after graduation.
Some people incur such huge student debts that they are known to carry it well into their 40s and 50s. It is estimated that Canadians accumulate an average student debt of $26,600 by the time they graduate from university.
While student loans can make life easier during your post-secondary studies, keeping the amount low makes your life easier afterwards. Here are some ways you can minimize student loan debt in Canada:
Take only what you need
Students are often offered more loans than they actually need, and unfortunately, many of them accept whatever comes their way. When you are young, it can be easy to be tempted by loans with low interest rates. But before you take out any loan, you should put together a monthly student budget to find out how much you’ll actually need while you’re in school. Take no more than the amount you need to cover your essential expenses.
Go to a local college or university
If your school is in your hometown or city, commute to it from home. You may not be able to enjoy the independence that others experience when they move away from home, but it will save you a lot of money that you would otherwise have to pay towards room and board costs. There’s no shame in staying at home to minimize your student debt.
Work while studying
Instead of taking out loans to pay for your food, rent and entertainment, find a part-time job either on or off-campus. Even if the job doesn’t pay much, you will soon realize that you won’t need to take out as much of a loan as your classmate who doesn’t work.
Apply for scholarships and grants
There are many government and non-government institutions, organizations and private foundations that offer scholarships and grants to students, like this scholarship offered by Credit Counselling Services of Atlantic Canada! Many of these scholarships and grants are open to students already in school, so keep applying every year.
Live on a budget
Many students take out loans to go on holidays or to buy expensive gadgets. As a result, they accumulate so much debt by the time they graduate that it takes them years to pay it off. Try to live on a budget and be frugal. Take advantage of student pricing and discounts. This is truly the best way to minimize your student debt.
Make an effort to graduate with as little debt as possible. You’ll be glad you did. While you might have to live frugally while you’re a student, if you secure a good job and have minimal or no debt after graduation, you’ll have a lot more disposable income at your reach. When you graduate with minimal student debt, you can enjoy the financial freedom of your adult life!
For more information on student debt and post-secondary education planning, check out our free resources.