Loans and grants

Penney-Wise

Before you get a Student Line of Credit (SLOC), there are a few things to think about. Many students consider getting a Government Student Loan (GSL) over a SLOC. With a SLOC, you get a monthly amount and it helps with budgeting, rather than the lump sum you get at the beginning of the semester with a GSL, which you run the risk of blowing all in the first month. In reality, however, having a SLOC is pretty much the same as getting a GSL; you have access to it, but it doesn’t go right into your bank account all at once.

The biggest difference between a SLOC and a GSL is how the interest is repaid. You are responsible for the interest as soon as you start spending the money with a SLOC, something you don’t need to do if you get a GSL.

The government gives you a six month grace period after you graduate before you have to start replaying the GSL. Even after this period is up, you can apply for interest relief for another six months if you need to, and you can do this up to five times.

As mentioned in the previous article, the actual amount of assistance with a SLOC, as with a GSL, varies from person to person, and also depends on whether you are a full- or part-time student. A SLOC ranges from $5,000 to $10,000 a year for undergraduate studies. BMO however, offers a maximum of $15,000 during the first year and $10,000 for the next three years for a total of $45,000 rather than $40,000 at the other major banks.

If you’re looking at graduating with a professional designation — a degree in pharmacy, medicine, law, or an MBA — there are SLOCs available to you ranging from $40,000 to $150,000, depending on your field of study.

With a GSL the maximum amount a student can receive is $350 per week for 13 weeks, for a total of $4,550. There are of course student grants that are available to you both during school and after you finish.

During your enrollment period, if your assessed need is more than $60 per week of study for the provincial loan, you’re eligible for a non-repayable up-front provincial grant. This is issued approximately six weeks into the semester.

Something graduate students should have a look at is the Debt Reduction Program. This program is designed to convert nearly the entire provincial portion of a student loan into a non-repayable grant. You don’t need to apply for this program, as all graduate students are assessed once they graduate.

There are a number of criteria, the most important one being an 80 per cent average in every semester. If you pass with 100 per cent of your course load, your grant will be equal to 100 per cent of the provincial loan amount.

A good idea is to complete a full course load every semester and ace every course—you can max out how much of the grant you’ll receive. Not to mention, it could end up saving you thousands in student loans.

In reality, having GSLs are a student’s best choice to fund post-secondary education. The interest rates are usually better, you don’t need a co-signer, and when it comes time to pay it back, the government is much more accommodating than any bank. While the government is trying to promote your education, to the banks you are just a number.