The COVID-19 pandemic has impacted every demographic in Canada. Children can’t go to school; older people are not able to see their families; and working-age Canadians are grappling with unemployment, work-from-home orders, or continuing to work as essential employees. One sector of the population that hasn’t been getting much attention – but has been heavily impacted – is post-secondary students.
Almost every aspect of student life has been affected by COVID-19. From virtual classes and campus closures to the suspension of summer hiring, the average student’s future is full of uncertainty. The impact of these changes is that many attending post-secondary institutions may be worried about whether they can afford their tuition in the fall, along with housing and other education-related costs. But don’t panic! This guide offers plenty of useful advice on how to fund your post-secondary education during COVID-19 and survive this current financial crisis.
Apply For Government Aid
If you were planning to use the summer of 2020 to work and save money for your fall tuition, you might have been dismayed at the lack of jobs available during the pandemic. If you were unable to find employment, there is a government support program available for post-secondary students and new graduates.
If you were not employed or self-employed for reasons related to COVID-19, or you had a 50% reduction in your average weekly income due to COVID-19, you may be able to qualify for the Canada Recovery Benefit (CRB). This benefit is available to those who have been looking for work but have been unable to find it and provides Canadians with $1,000 ($900 after taxes) per two week application period.
Apply For a Student Loan
If you were unable to earn enough over the summer to pay for your fall tuition and living expenses, you’ll need to join the thousands of other Canadian students applying for provincial or federal student loans. Canada Student Loans are an excellent, low-cost way to borrow money to pay for post-secondary education. Typically administered by your province, they offer low interest rates and no interest will accumulate while you are a student. You only make payments once you graduate and there is a six-month grace period after graduation before you need to start making them.
The federal government has announced changes to its student loan programs in the face of COVID-19. First, more students are eligible for student loans since the government has removed the requirement to include a student’s and spouse’s anticipated contributions to education costs.
Second, the maximum weekly amount you could receive when you apply for student loans has increased from $210 to $350. These changes will make Canada Student Loans easier to obtain and more plentiful for many Canadians.
Apply for a Personal Loan
Getting a Canada Student Loan should be your first option when considering borrowing to pay for post-secondary education. But if you need more cash than your Canada Student Loan offers or you’re not eligible, a personal loan could bridge that gap or help you consolidate debt you may have acquired while unemployed or working fewer hours over the summer.
A personal loan is different from a Canada Student Loan in that the interest rate will be higher. You’ll need to demonstrate that you can pay back a personal loan and you’ll need to start making payments on your loan right away. You can apply for a personal loan through your local bank, or use an online loan platform to compare personal loan providers in Canada. For instance, Loan Connect offers interest rates as low as 4.6%, and the funds can be deposited into your account within 24 hours if approved.
Use a Low Interest Credit Card
If you’ve got upcoming school costs and you haven’t secured a Canada Student Loan or personal loan yet, you may find it useful to charge books, electronics, or bills to your credit card in the interim. Credit cards can be a useful tool when you need to make purchases but don’t have cash available to pay for them. If you plan to carry a balance, consider getting a low interest credit card, like the HSBC +Rewards™ Mastercard®.
This card has a low 11.9% interest rate and no minimum income qualifier, making it an excellent option for students. That way, if you must carry a balance, you’re paying a lot less in interest charges. What’s also great is you earn points on every eligible purchase you make (2 Points for every $1 spent on eligible dining or entertainment purchases and 1 Point for every dollar spent on everything else), and you can put your points towards your credit card balance or stash it away in an HSBC savings account.
A credit card with a lower interest rate will result in fewer interest charges and will be easier to pay off. It’s important to remember that credit cards are useful as a short-term cash source, but you shouldn’t use them to carry debt long-term. Ideally, you’d pay off your credit card debt every month to avoid interest charges. Read more smart strategies on how to get out of credit card debt.
Transfer a Balance
If you’re a new graduate just entering the job market, it may be a while before you’re able to secure stable, long-term employment. In the meantime, you can offset some of your living costs by applying for the benefit programs above. You can also make a plan to lower the interest rates of your debts as much as possible in the short term.
If you’ve racked up a credit card balance during the pandemic, you can lower the interest rate on this debt in the short term by using a balance transfer credit card. This type of credit card offers a low-interest rate (usually around 0%) for a set period, for example, six months. This period may be long enough for the effects of the pandemic panic to ease, businesses to re-open, and jobs to become available once again. Keep in mind that you should make a plan to pay off your transferred balance. Once the intro period expires, your debt will be subject to higher standard credit card interest rates. Read about How to Use a Balance Transfer Card Wisely.
Defer Your Credit Card Payments
If you’ve accumulated credit card debt and the pandemic is preventing you from earning an income and making payments, you can take advantage of the COVID-19 debt deferment programs available through most credit card providers in Canada.
Most lenders in Canada are offering some type of credit card payment deferment option if COVID-19 has impacted your financial stability. What you qualify for depends on the lender, so it is crucial to call your bank and ask what they are offering. Make sure you acquire a copy of the terms and conditions, as some lenders may charge extra interest at the end of their deferment period, and you’ll want to be prepared for that.
Apply for Scholarships, Grants, and Bursaries
Finally, there’s no better way to fund your education than using free money. Scholarships, grants and bursaries are excellent ways to obtain funding for tuition. You can get a list of available scholarships and bursaries from your university or college and start working on your applications during the summer. Scholarships typically require application essays, which may take some time to complete.
The federal government is also making free money available to returning students. For students applying for Canada Student Loans, they’ve increased the non-repayable grant portion of student funding up to $3,600 per year for part-time students and $6,000 per year for full-time students.
The Last Word
Many things could go wrong during a student’s time at post-secondary school. It could be challenging to find an apartment, and scheduling conflicts could mean choosing between favourite courses, or perhaps juggling a part-time job. But whatever you might have anticipated, no one could have predicted the unprecedented fallout and nation-wide shutdown from a global pandemic.
With that in mind, here’s our most important piece of financial advice during this crisis: It’s essential to acknowledge that you might not meet your money goals when it comes to paying tuition, and that’s ok. Keep in mind this crisis is temporary. It will pass. In the meantime, there are numerous supports in place and options available to help you through these challenging times.