Other Financial Aid

Other Financial Aid

Applying for a Student Loan
How much do I need? How do I apply? What if I’m refused? These are questions that concern many students. Fortunately, there are several sources that students can consider. They can range from government loans to bank loans.

Government Loans
Government loans are a popular method students use to pay for their education. Be aware that those students who are taking 60% or more of a full course load or those with a permanent disability who are taking at least 40% of a full course load – may be eligible for financial assistance form the Ontario government, federal government, or both.

The Government of Canada helps students’ access funds to help with their post-secondary education through these programs:
1. Canada Student Loans Program
2. Canada Study Grants
3. Canada Education Savings Grant Program
4. Canada Millennium Scholarship Foundation

Canada Student Loans Program
This program is to supplement your financial resources. The federal government began directly financing the Canada Student Loans on August 1, 2000. This date is important because any loans applied for after this time is paid back through the National Student Loans Service (NSLC). Before this date, the payments are sent elsewhere.

The application forms are handled differently in Ontario compared to other provinces. You will use one form provided by the Canada-Ontario Integrated Student Loan Program that combines federal and provincial funding. A major change with the 2003 Federal Budget is that more money will be put into the hands of students through increased exemptions for income earned while in school and from merit-based scholarships. The annual exemption has been increased to $50 per week ($1700 for a typical eight month study period) for income earned while in school and a separate exemption of $1800 has been established for merit-based scholarships.

To apply for a Canada-Ontario Integrated Student Loan you must go through Ontario Student Assistance Program (OSAP) http://osap.gov.ca before mid June. The administrators at OSAP will decide if you meet the criteria for a Canada Student Loan. (For more details regarding OSAP read the information on this web site entitled – What you need to know about OSAP). The maximum you can get for the Canada –Ontario Integrated Student Loan is 60% of a full-time student’s assessed need, up to $165 per week of study. To get an idea of how much you may be eligible to receive in Canada Student Loan Funds, check out the Student Loan Estimator at www.canlearn.ca. Once you submit your application the processing can take up to 6 weeks.

While you are in school full-time, the Government of Canada will pay the interest on your Canada Student Loan. You must make sure you confirm your full time student status for each period of study. When you finish your schooling, you have six months from the end of your previous period of study before you have to start paying the loan principal and interest on your loan.

Canada Study Grants
Canada Study Grants financially assist students with permanent disabilities, high-need part-time students, women in certain doctoral studies, and students with dependants. Unlike Canada Student Loans, Canada Study Grants do not have to be repaid. Canada Study Grant assistance is taxable and you will receive a T4A to include with the next year’s income tax return.

To apply for a Canada Study Grant, you must qualify for a Canada Student Loan first. Sometimes you will be asked to submit other documentation.

If you have a permanent physical or learning disability, you may be eligible for a Canada Study Grant for as much as $8000 a year to help cover exceptional education-related costs associated with your disability. These are things like a tutor, interpreter (oral/sign), note takers, attendant care etc. High-need part time students can qualify for as much as $1,200 per year.

Canadian Education Savings Grants
This grant is provided to encourage families to save for their child’s education. The government will contribute an additional 20%, up to a maximum of $400 per year, for every Registered Educational Savings Plan (RESP) beneficiary. Visit www.hrdc.gc.ca/cesg for details.

Millennium Bursary Program
Bursaries averaging $3000 are granted to full time students who demonstrate high financial need and are enrolled in programs recognized by the Canada Student Loans program or OSAP. To be eligible, you must have received a Canada Student Loan and have already completed at least 60% of your current year of post secondary education. This bursary should not be confused with the Millennium Excellence Awards Program outlined in the scholarship section of this booklet.

Students who fill out an OSAP application form are reminded to apply for the Aiming for the Top Tuition Scholarship. The value of the scholarship ranges from $100 to a maximum of $3500 over four years. It recognizes graduating high school students who have earned top marks. Students who keep their grades up can receive this scholarship annually for up to four years.

Other Government-funded Support

The Aird Scholarship awards $2500 annually to each of two students with physical disabilities who are studying full-time at an Ontario institution

Fellowships for Studying in French are $1500 awards offered to encourage Ontario residents to enter full-time postsecondary programs in French at French-language or bilingual institutions in Canada. If you register at an institution outside of Ontario, you are eligible for this fellowship only if your program of study is not available in French in Ontario.

Summer Language Bursary Program is for students across Canada to participate in a five-week immersion courses in English or French at accredited institutions. Further information is on the website of the Council of Ministers of Education Canada, at http://www.cmec.ca/olp
Phone: 1-800-465-3957 e-mail: [email protected]

Support Available from Postsecondary Institutions

A variety of financial assistance options- bursaries, scholarships, work-study, and/or summer employment may be available at your postsecondary institution (see the financial aid office on campus) for information on the following programs:

The Ontario Student Opportunity Trust Funds – these are permanent endowments between the province and provincially funded colleges and universities to help students in need.

Tuition Set-Aside Policy– provincially funded colleges and universities are required to set aside 30% of any tuition increases to help students in financial need.

Ontario Work Study Plan – this program allows students with financial need to earn up to $1000 per term in part-time work on campus. As with a bursary, approval is based on need. Competition for this funding is tough so apply early at your school’s financial aid office.

Is My Scholarship Taxable?

All scholarships are considered income for tax purposes. By the end of February, you will receive a T-4A. However, Ontario and the federal government will exempt you from tax the first $3000 of scholarship income each year.

Bank Loans
Even if you qualify for a government loan, it may be insufficient. A credit line, offered by banks, trust companies and credit unions, is another option to consider as stated in the article, “The University Bind”, by Stuart Foxman (Readers Digest, Jan. 2005). “Students arrange their limit (try to get a preferred lending rate), and withdraw what they need only when they need it,” explains Gail Kassie, director of financing products with Bank of Montreal. Depending on the financial institution (be sure to compare), undergrads can have a line of credit ranging from about $5,000 to $35,000. That can increase to as much as $150,000 for those in professional programs, such as medicine. The benefit is that they pay monthly interest only on the amount outstanding, and the rates are usually lower than for a loan. This same article also makes parents aware that they can cash in on non-retirement investments such as mutual funds, stocks and bonds. Or, even get a line of credit against the equity they have built in their home. That is usually the cheapest form of financing, with an interest rate as low as prime.
Students have to be cautious about bank loans because there are drawbacks. One of the biggest drawbacks is that you have to start paying interest off right away. In contrast, most government student loans require payback, six months after graduation. What happens if you are late getting a summer job? The interest still needs to be paid. Also, for most non-government loans you usually need a guarantor (someone who will be responsible for paying your debt if for some reason you cannot pay). It is not always easy to find someone to take this responsibility.

Filling Out a Loan Application Form
To make the process of applying for any educational loan run smoothly, remember these tips suggested in Campus Access, Oct. 2003:

Tip #1 Be conservative when filling out the loan application, as this determines how much you need based on a formula (but don’t lie). Just an example, if your parents are separated, you only need to divulge one of their incomes.

Tip #2 Read the fine print, and make note of all the important terms and details. For example, they may start to charge you interest unless you provide them with written notice that you are still in school every semester.

Tip #3 Create a budget and stick to it. Be proactive and arrange a repayment plan.

Tip #4 Stay in contact with your loan representative at your bank to keep them informed of your situation. They will be more sympathetic if you need special consideration. Remember, loans are your first step in building a credit rating.

The Bottom Line about Loans
If you are able to receive a government loan, accept it and use only what you need. Put away money you do not need into safe, high interest-earning investments until you have to start paying interest on the loan. When you do start paying it off, the interest you earned by investing the surplus will help with your payments.

Take a regular bank loan only as a final step. Shop around and compare rates at credit unions, trust companies, and banks. Ask competitors to match your best offer. Negotiate the terms of your loans and find out if you can pay down your interest charging debts as soon as possible.

Earning While Learning
Students must also know there are advantages to earning while learning— whether part-time during the school year, full-time during the summer or both. When a student helps to raise their own cash it gives them a stake in their education and can provide valuable job experience. It also allows you to network with people who can help you achieve your future goals. Remember, the summer is such a critical time for a student in terms of funding an education. The amount you make during that period can greatly determine your lifestyle, level of stress, and academic success during the school year. Ultimately, it can determine how much debt you accumulate during your school years as well as your financial health long after you graduate.

Final Note
In the report Financial Planning for Post Secondary Education a Social Demographic Profile of Canadian Families, it was found that nearly two thirds of parents expected their son’s or daughter’s education to be partially funded through scholarships. But the most recent Stats Canada Report (Youth in Transition Survey) found that only 31% of students aged 18-20 receive scholarships and awards. Thus it is important to realize that students need to use a combination of all funding options to pursue their university/college dreams. These funding options range from parental contributions, RESP’s, earnings from employment, personal savings, bank loans and government student loans, scholarships and bursaries. Talk with your parents and plan how to tackle your financial costs together.

The paperback, The Debt Free Graduate – How to Survive College and University Without Going Broke emphasizes that too often, the issue of financing an education is left to misconception and assumptions. Assess your situation carefully. The book emphasizes that you should consider:

Applying for a Student Loan
How much do I need? How do I apply? What if I’m refused? These are questions that concern many students. Fortunately, there are several sources that students can consider. They can range from government loans to bank loans.

Government Loans
Government loans are a popular method students use to pay for their education. Be aware that those students who are taking 60% or more of a full course load or those with a permanent disability who are taking at least 40% of a full course load – may be eligible for financial assistance form the Ontario government, federal government, or both.

The Government of Canada helps students’ access funds to help with their post-secondary education through these programs:
1. Canada Student Loans Program
2. Canada Study Grants
3. Canada Education Savings Grant Program
4. Canada Millennium Scholarship Foundation

Canada Student Loans Program
This program is to supplement your financial resources. The federal government began directly financing the Canada Student Loans on August 1, 2000. This date is important because any loans applied for after this time is paid back through the National Student Loans Service (NSLC). Before this date, the payments are sent elsewhere.

The application forms are handled differently in Ontario compared to other provinces. You will use one form provided by the Canada-Ontario Integrated Student Loan Program that combines federal and provincial funding. A major change with the 2003 Federal Budget is that more money will be put into the hands of students through increased exemptions for income earned while in school and from merit-based scholarships. The annual exemption has been increased to $50 per week ($1700 for a typical eight month study period) for income earned while in school and a separate exemption of $1800 has been established for merit-based scholarships.

To apply for a Canada-Ontario Integrated Student Loan you must go through Ontario Student Assistance Program (OSAP) http://osap.gov.ca before mid June. The administrators at OSAP will decide if you meet the criteria for a Canada Student Loan. (For more details regarding OSAP read the information on this web site entitled – What you need to know about OSAP). The maximum you can get for the Canada –Ontario Integrated Student Loan is 60% of a full-time student’s assessed need, up to $165 per week of study. To get an idea of how much you may be eligible to receive in Canada Student Loan Funds, check out the Student Loan Estimator at www.canlearn.ca. Once you submit your application the processing can take up to 6 weeks.

While you are in school full-time, the Government of Canada will pay the interest on your Canada Student Loan. You must make sure you confirm your full time student status for each period of study. When you finish your schooling, you have six months from the end of your previous period of study before you have to start paying the loan principal and interest on your loan.

Canada Study Grants
Canada Study Grants financially assist students with permanent disabilities, high-need part-time students, women in certain doctoral studies, and students with dependants. Unlike Canada Student Loans, Canada Study Grants do not have to be repaid. Canada Study Grant assistance is taxable and you will receive a T4A to include with the next year’s income tax return.

To apply for a Canada Study Grant, you must qualify for a Canada Student Loan first. Sometimes you will be asked to submit other documentation.

If you have a permanent physical or learning disability, you may be eligible for a Canada Study Grant for as much as $8000 a year to help cover exceptional education-related costs associated with your disability. These are things like a tutor, interpreter (oral/sign), note takers, attendant care etc. High-need part time students can qualify for as much as $1,200 per year.

Canadian Education Savings Grants
This grant is provided to encourage families to save for their child’s education. The government will contribute an additional 20%, up to a maximum of $400 per year, for every Registered Educational Savings Plan (RESP) beneficiary. Visit www.hrdc.gc.ca/cesg for details.

Millennium Bursary Program
Bursaries averaging $3000 are granted to full time students who demonstrate high financial need and are enrolled in programs recognized by the Canada Student Loans program or OSAP. To be eligible, you must have received a Canada Student Loan and have already completed at least 60% of your current year of post secondary education. This bursary should not be confused with the Millennium Excellence Awards Program outlined in the scholarship section of this booklet.

Students who fill out an OSAP application form are reminded to apply for the Aiming for the Top Tuition Scholarship. The value of the scholarship ranges from $100 to a maximum of $3500 over four years. It recognizes graduating high school students who have earned top marks. Students who keep their grades up can receive this scholarship annually for up to four years.

Other Government-funded Support

The Aird Scholarship awards $2500 annually to each of two students with physical disabilities who are studying full-time at an Ontario institution

Fellowships for Studying in French are $1500 awards offered to encourage Ontario residents to enter full-time postsecondary programs in French at French-language or bilingual institutions in Canada. If you register at an institution outside of Ontario, you are eligible for this fellowship only if your program of study is not available in French in Ontario.

Summer Language Bursary Program is for students across Canada to participate in a five-week immersion courses in English or French at accredited institutions. Further information is on the website of the Council of Ministers of Education Canada, at http://www.cmec.ca/olp
Phone: 1-800-465-3957 e-mail: [email protected]

Support Available from Postsecondary Institutions

A variety of financial assistance options- bursaries, scholarships, work-study, and/or summer employment may be available at your postsecondary institution (see the financial aid office on campus) for information on the following programs:

The Ontario Student Opportunity Trust Funds – these are permanent endowments between the province and provincially funded colleges and universities to help students in need.

Tuition Set-Aside Policy- provincially funded colleges and universities are required to set aside 30% of any tuition increases to help students in financial need.

Ontario Work Study Plan – this program allows students with financial need to earn up to $1000 per term in part-time work on campus. As with a bursary, approval is based on need. Competition for this funding is tough so apply early at your school’s financial aid office.

Is My Scholarship Taxable?

All scholarships are considered income for tax purposes. By the end of February, you will receive a T-4A. However, Ontario and the federal government will exempt you from tax the first $3000 of scholarship income each year.

Bank Loans
Even if you qualify for a government loan, it may be insufficient. A credit line, offered by banks, trust companies and credit unions, is another option to consider as stated in the article, “The University Bind”, by Stuart Foxman (Readers Digest, Jan. 2005). “Students arrange their limit (try to get a preferred lending rate), and withdraw what they need only when they need it,” explains Gail Kassie, director of financing products with Bank of Montreal. Depending on the financial institution (be sure to compare), undergrads can have a line of credit ranging from about $5,000 to $35,000. That can increase to as much as $150,000 for those in professional programs, such as medicine. The benefit is that they pay monthly interest only on the amount outstanding, and the rates are usually lower than for a loan. This same article also makes parents aware that they can cash in on non-retirement investments such as mutual funds, stocks and bonds. Or, even get a line of credit against the equity they have built in their home. That is usually the cheapest form of financing, with an interest rate as low as prime.
Students have to be cautious about bank loans because there are drawbacks. One of the biggest drawbacks is that you have to start paying interest off right away. In contrast, most government student loans require payback, six months after graduation. What happens if you are late getting a summer job? The interest still needs to be paid. Also, for most non-government loans you usually need a guarantor (someone who will be responsible for paying your debt if for some reason you cannot pay). It is not always easy to find someone to take this responsibility.

Filling Out a Loan Application Form
To make the process of applying for any educational loan run smoothly, remember these tips suggested in Campus Access, Oct. 2003:

Tip #1 Be conservative when filling out the loan application, as this determines how much you need based on a formula (but don’t lie). Just an example, if your parents are separated, you only need to divulge one of their incomes.

Tip #2 Read the fine print, and make note of all the important terms and details. For example, they may start to charge you interest unless you provide them with written notice that you are still in school every semester.

Tip #3 Create a budget and stick to it. Be proactive and arrange a repayment plan.

Tip #4 Stay in contact with your loan representative at your bank to keep them informed of your situation. They will be more sympathetic if you need special consideration. Remember, loans are your first step in building a credit rating.

The Bottom Line about Loans
If you are able to receive a government loan, accept it and use only what you need. Put away money you do not need into safe, high interest-earning investments until you have to start paying interest on the loan. When you do start paying it off, the interest you earned by investing the surplus will help with your payments.

Take a regular bank loan only as a final step. Shop around and compare rates at credit unions, trust companies, and banks. Ask competitors to match your best offer. Negotiate the terms of your loans and find out if you can pay down your interest charging debts as soon as possible.

Earning While Learning
Students must also know there are advantages to earning while learning— whether part-time during the school year, full-time during the summer or both. When a student helps to raise their own cash it gives them a stake in their education and can provide valuable job experience. It also allows you to network with people who can help you achieve your future goals. Remember, the summer is such a critical time for a student in terms of funding an education. The amount you make during that period can greatly determine your lifestyle, level of stress, and academic success during the school year. Ultimately, it can determine how much debt you accumulate during your school years as well as your financial health long after you graduate.

Final Note
In the report Financial Planning for Post Secondary Education a Social Demographic Profile of Canadian Families, it was found that nearly two thirds of parents expected their son’s or daughter’s education to be partially funded through scholarships. But the most recent Stats Canada Report (Youth in Transition Survey) found that only 31% of students aged 18-20 receive scholarships and awards. Thus it is important to realize that students need to use a combination of all funding options to pursue their university/college dreams. These funding options range from parental contributions, RESP’s, earnings from employment, personal savings, bank loans and government student loans, scholarships and bursaries. Talk with your parents and plan how to tackle your financial costs together.

The paperback, The Debt Free Graduate – How to Survive College and University Without Going Broke emphasizes that too often, the issue of financing an education is left to misconception and assumptions. Assess your situation carefully. The book emphasizes that you should consider:

• How much do you think as a student you can reasonably (be conservative in your estimate) contribute to the process?
• Talk to your parents on how much they can contribute. Get a firm commitment; you need clear figures on specific costs to be covered.
• Avoid comments like, “We’ll pay for books and tuition.” Instead, refer to the dollar value of books and tuition.
• What are your parent’s expectations? Do they expect you to work part time and get straight A’s? Their expectations can affect how much you need to have them assist with the funding.
• Look what your major expenses are going to be. Consider residence costs; travel for out of province schools.
• Look at all your resources. Compare it to your expenses. Prepare a realistic budget. Note where you could cut expenses but be realistic.
• Plan for the money you will need and when you will need it. Mark the dates on the calendar.
• Map out where you will keep your money and where it will be when you need it.

Following these steps should minimize communication problems.
It is clear there are many avenues a student can take to get the financial support needed to pay for their post secondary education. It is wise for students read, be informed, and work closely with their family to review all the options.