70 12.1 Funding Options
Planning for post-secondary education can seem daunting and may feel out of reach. It can feel like you cannot afford it. However, without post-secondary education, many people will never be able to afford many of the things they desire. There is a direct correlation between the number of years of education people have and the amount of money they make. The data is very clear. The higher your education, the more money you will likely earn. Therefore saying you can’t afford to go to school is more likely to keep you in the situation of not being able to afford the things you want from life.
StatsCan did a study called “Does education pay? A comparison of earnings by level of education in Canada and its provinces and territories.” It is clear that the higher the level of education, the higher the average pay.
If you want to enrich your education and skills, you should look into different avenues of funding. There are often several sources of income that can help you get through school.
Sources of Funding
Student Loans
Student loans are designed to help eligible students who otherwise may not be able to afford to access post-secondary education. If you decide to borrow money to go to college or university, government student loans are a good way to do it. Note that government student loans are different than student lines of credit from your bank. Student lines of credit usually end up costing you more because they charge interest from the day you take the money. This results in four years of interest payment for a typical university degree! There are several advantages to government student loans.
- Interest. You are not charged any interest while you are still going to school. Interest does not start until you complete your program (or quit or fail out). You have access to the funding throughout your schooling, but no interest is charged until you are finished going to school.
- Interest rates. The interest rates on student loans are usually much lower than typical lending rates. They are substantially lower than credit card rates and usually lower than lines of credit.
- Payments. You do not need to make any payments while you are in school. In fact, you do not need to start making payments until six months after your program ends. This gives graduates time to get a job after they graduate and get back on their feet financially before having to start making payments on the loan.
- Credit rating. You do not have to have built up a good credit rating to get the loan. In fact, unless you have been in default on a previous student loan, you are likely to receive a loan if you meet the other qualifying criteria.
- Awards. Applying for student loans can make you eligible for student grants (free money that you do not have to pay back!) Even if you do not qualify for student loans, the fact that you applied can help you qualify for other sources of income. For example, some post secondary institutions will not consider you for st