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A student loan is a wonderful way to tap financial support in order to complete important studies, but there is a catch. That money must be paid back. Debt can be a terrible burden. Education is important, but so is being debt free. Here are some tips for students and their families to make that burden lighter.

When I graduated from Western University in 2010 my student debt was more than $35,000. I landed a job right out of university as a sales coordinator at a travel company, but between rent payments and groceries, I was barely earning enough to cover my living expenses. The thought of paying off debts was overwhelming and I didn’t even know where to start.

The 2015 Canadian University Survey Consortium reports that the average student debt owed is a staggering $26,819, a result of Canadian undergraduate tuition tripling in the last two decades. It’s no surprise then that more and more families are relying on financial assistance to put their children through school as education becomes less affordable. The significant levels of debt paired with a poor job market are seeing consequences for both parents and students – longer reliance on parents for financial assistance, delayed life milestones and saving for the future, and even an impact on mental health.

The best way to deal with student debt is to pay it off as quickly as possible. By putting a plan of action in place I was able to pay back my loan in five years, while living on my own in Toronto and putting away a little something every month for the future.

  1. Figure out how much you owe

Figure out how much you owe (to the cent) and pick a feasible date for when you want to have your debt paid. The Canada Student Loan Program says most students take about 10 years to pay but it considers your financial situation and what kind of payments you’re able to make. The more time you take to pay, the more interest you’ll end up paying so if you can pay it off sooner, the less you’ll end up paying in the end.

  1. Choose the interest rate that works best for you

When you enter your debt repayment period, you’ll be asked to choose between a fixed (prime + 5%) or floating interest rate (prime + 2.5%). Selecting fixed means your interest rate will never change during your repayment period and you pay a premium for that guarantee. The floating rate will fluctuate depending on the prime rate. Which one is best for you depends on how long it’ll take you to pay off your loan and the economic factors that may affect the prime rate within that time period. A rule of thumb – go with floating if you are set on paying your debt quickly and fixed if you know it’s going to take you a while.

  1. Create a game plan

You have a number and you have a date. Now we need to figure out how you’re going to get there. This is where a personal budget comes in handy. List all of your mandatory expenses (rent, car payments, groceries) and discretionary expenses (clothes, dining out) and figure out how much you can put toward debt repayments. Always aim to pay what you can afford and not the minimum amount as stated on your statements. It will take forever to pay off your debt if you’re barely clearing your principal payments so always put down what you can while still being able to meet your other financial obligations.

  1. Spend less

How are you currently spending your money and how can you spend less on those things so you can put more towards debt repayment? Living at home with the folks and taking public transportation instead of driving are huge cost savers but don’t underestimate the power of “the latte factor” either. Smaller purchases like a daily coffee or weekly manicures can really add up ­– $5, $10, and $20 purchases can end up costing you hundreds of dollars every month. Take a look at your spending habits and be honest with yourself about where you can start cutting back. It’s a short-term sacrifice but there are long-term benefits.

  1. Automate your payments

The easiest way to ensure you’ll always make a payment is to automate. You can set up your online bank account to take a specified amount of money out each month and send it to your creditor. This can also be set up when you receive your repayment package and should be at least the minimum amount you need to pay each month.

  1. Pay it like a bill

While you have your automatic payments running in the background, you can also make manual payments. What many people don’t know is that you can set up your student loan as a bill and pay it online as you would a cellphone or credit card bill. Maybe you had a good month in sales commissions – put all that “excess” cash towards your debt and get it out of your chequing account before you’re tempted to spend it on something else.

  1. “Gift” money should always go towards your student loans

Did you receive some birthday money from grandma? Deposit it into your bank account and make a debt payment with it. This applies anytime you receive a large sum of money, whether it be for birthdays, Christmas, or in the form of a tax refund. While I was paying off my loans, I made a polite request to my parents that in lieu of gifts for them to make a donation to my student loan. It was win-win because it was a gift that I actually needed and my parents knew exactly what to get me.

  1. Don’t wait to start repayments

You don’t have to make any payments during the six-month grace period that the government gives you after graduation but know that interest is still being added. If you have enough money to at least clear the interest, you can start making payments earlier to get a head start and save the interest that will accumulate over that time. If you have the funds, start your repayments right away.

  1. Make bi-weekly payments instead of monthly

If you get paid bi-weekly, you can split your monthly payment in half and pay every two weeks instead of four. Making a smaller payment every time you receive a pay cheque helps manage your cash flow and softens the blow of making one big lump sum payment.

  1. Ask for help when you need it

If you’re struggling to make payments every month due to legitimate reasons (like unemployment), you can apply for repayment assistance through your financial loan centre. This means that your monthly loan payments will be reduced or for a certain amount of time you aren’t expected to make any payments and interest will stop accumulating. This repayment assistance period lasts six months up to a maximum of 30 months, depending on your situation.

Paying off your student loans isn’t something you should dread but don’t sweep it under the rug, either. The longer it takes you to repay, the more interest you’ll fork over and defaulting on your loans entirely can lead to legal action taken against you – definitely not a road you want to go down. If you put your debt repayment plan into action you’ll be livin’ la vida debt-free sooner than you think.

For more information on your student loans, contact the National Student Loans Service Centre or your Provincial/Territorial Student Financial Assistance Office.

National Student Loans Service Centre

http://www.canlearn.ca/

1-888-815-4514

Alberta (Student Aid Alberta Service Centre)

http://studentaid.alberta.ca/

1-855-606-2096

British Columbia (StudentAid BC)

https://studentaidbc.ca/

1-800-561-1818

Manitoba (Manitoba Student Aid)

http://www.edu.gov.mb.ca/msa/

1-800-204-1685

New Brunswick (Student Financial Services)

http://www2.gnb.ca/content/gnb/en/departments/post-secondary_education_training_and_labour/Skills/content/FinancialSupport/StudentFinancialServices.html

1-800-667-5626

Newfoundland and Labrador (Student Financial Services)

http://www.aes.gov.nl.ca/studentaid/

1-888-657-0800

Northwest Territories (Student Financial Assistance)

https://www.ece.gov.nt.ca/income-security/student-financial-assistance-sfa

1-800-661-0793

Nova Scotia (Student Assistance Office)

http://novascotia.ca/studentassistance/

1-800-565-8420

Nunavut (Financial Assistance for Nunavut Students)

http://gov.nu.ca/family-services/programs-services/financial-assistance-nunavut-students-fans

1-877-860-0680

Ontario (Ontario Student Assistance Program)

https://osap.gov.on.ca/OSAPPortal/index.htm

1-877-672-7411

Prince Edward Island (Student Financial Services)

http://www.studentloan.pe.ca/

902-368-4640

Quebec (Aide financière aux études)

http://www.mesrs.gouv.qc.ca/en/aide-financiere-aux-etudes/

1-877-643-3750

Saskatchewan (Saskatchewan Student Loans)

http://www.saskatchewan.ca/studentloans

1-800-597-8278

Yukon (Student Financial Services)

http://www.education.gov.yk.ca/index.html

1-800-661-0408 local 5929