As tuition expenses and living costs continue to climb across the province, many students take on student loans to get themselves through their post-secondary years. While studies have shown that students are optimistic about their ability to earn great wages after graduation, the reality is that many may instead wind up juggling student loans, in addition to other debts accumulated during their academic pursuits. Whether you’re considering student loans to invest in your education, or you’ve already spent them, read on for tips on managing (and avoiding) student debt:
1) Make a budget. Before signing on the dotted line, map out how much money you’ll really need. Factor in tuition, books, rent, groceries and any other costs of living. Consider whether or not you can earn some of those funds through a part-time or summer job and have a back-up plan for emergencies or a deficit in what student loans may extend you. If you’re granted more than you think you need, don’t be tempted to spend it all – avoid taking on more debt than necessary.
2) Use all the resources available to you. Do you have an RESP? Are there grants, scholarships or bursaries you can apply for? Will your parents be contributing to your education or costs (or housing you in general)? All these extras can add up to great savings later so explore all the potential benefits and sources of assistance.
3) Build a post-grad plan. The responsibilities don’t stop just because school’s out – don’t take one look at your statements and bury your head in the summer’s sand. Know your loans, grace periods and payment due dates. Keep in touch with your lenders if you move or your contact information changes. Figure out a plan to pay down your debts (yes, it may take some time) and again, avoid relying on more credit.
4) Contact a student financial assistance office, even if your payments are behind. If your income is falling short of allowing you to make your student loan payments contact your provincial and federal student loan offices. The government has repayment assistance options in place that may be able to provide relief options for you, like reducing your monthly payment or even forgiving loans in some cases.
5) Meet with a proposal administrator. If it’s been more than seven years since you were last a student and those debts are still hanging over your shoulder, contact a licensed proposal administrator and trustee in bankruptcy. A consumer proposal (or bankruptcy) may be a suitable option for debt relief and a fresh financial start. If your study-end date is more than five years old, a court may still order your student loans dischargeable under certain conditions.
Debt management strategies generally aren’t something you can find hitting the textbooks, so do yourself a favour and move to the head of the class by educating yourself on how to cope with your student debts. Knowing is not owing!
For more information on your debt resolution options please contact us for a free, confidential consultation.