It’s true that going to college is an investment in your future. But finding the money to pay for it can be a real challenge.
Fortunately, there are several ways to get help with your costs via scholarships, loans, grants, etc. There are even specific funding sources for Canadian adults who have been out of school for a while and are looking to develop new skills through a college program.
In this post, we break down the different financial aid options to help you understand how they work and whether they’re right for you.
Here’s what you need to know.
FINANCIAL AID OPTION #1: SCHOLARSHIPS
Scholarships are gifts you don’t have to pay back. That’s why they should be the first thing you investigate.
Scholarships are awarded for a whole host of reasons, such as academic achievement, community service, or demonstrated interest in a field of study (i.e., writing an essay or producing a video).
Many colleges offer scholarships to prospective students. For example, Herzing College awards $1,000 scholarships to applicants who get a certain score on the Herzing Alternative Admissions Test.
You can also find scholarships that are sponsored by banks, corporations, non-profit organizations, and other groups. It’s worthwhile to do your research and apply for as many of these free-money opportunities as you can.
FINANCIAL AID OPTION #2: STUDENT LOANS
The federal and provincial governments provide student loans through the Canada Student Financial Assistance (CSFA) Program (formerly known as the Canada Student Loans Program).
Student loans are based on financial need. The amount you can borrow depends on factors like:
- How much you and/or your partner or parents make
- How much you need for tuition and living expenses
- Whether you have dependents
- Whether you have a Registered Education Savings Plan or other savings
Student loans must be repaid with interest, but that interest does not accumulate while you’re in school. In fact, the federal government is not charging interest on student loans at all until March 31, 2023. (Interest may still accrue on provincial loans, however.)
You also get a six-month grace period after you leave school. During those six months, interest does not accrue and you do not have to make any payments on your loan.
Once the grace period ends, you will receive a repayment schedule that outlines the monthly payments you’ll be expected to make.
To get a government-backed loan, you must apply through your provincial student aid office (find a list here).
In most cases, you only need to fill out one application to be considered for both federal and provincial loans.
Note: Quebec, Nunavut, and the Northwest Territories do not participate in the CSFA Program; they have their own separate aid programs.
FINANCIAL AID OPTION #3: GRANTS
Like student loans, grants are based on financial need. The key difference is that grants don’t need to be repaid.
The federal government offers several grants through the CSFA Program (though again, not in Quebec, Nunavut, or the Northwest Territories).
For instance, the Canada Student Grant for Full-Time Students is available to full-time students whose gross family income falls below a certain threshold.
You can get up to $6,000 of funding per year as long as you’re enrolled full time.
If it’s been at least 10 years since you left high school, you could also receive an additional $1,600 in Skills Boost funding.
And if you have dependants under age 12, you could get extra funding for each of them.
You will automatically be considered for this and other grants when you apply for a loan through your province. If your application is approved, you’ll receive a Notice of Assessment that explains the type and amount of aid you can receive.
You can use this estimator to get an idea of how much aid you might get.
Note: You can only qualify for federal grants if you also take out a federal student loan. Some students accept the whole package, then refund the loan and keep the grant once they receive the funds.
Even without a loan, you may still qualify for grants through your province or territory, so be sure to check.
FINANCIAL AID OPTION #4: STUDENT LINES OF CREDIT
Most major Canadian banks offer lines of credit that are tailored for students. You may need a co-signer to qualify.
With a line of credit, you get access to a pre-approved amount that you can draw on as needed. You only pay interest on the funds you actually borrow.
So if your line of credit has a limit of $15,000, but you only spend $4,000, you only pay interest on the $4,000.
Lines of credit are flexible in that you can borrow and repay money repeatedly. However, you have to pay the interest right away, even while you’re in school.
Typically, you get 12 to 24 months after graduating before you have to start paying down any outstanding principal.
IS IT BETTER TO TAKE OUT A STUDENT LOAN OR GET A LINE OF CREDIT?
That depends on your situation. Many students do both.
Federal student loans do not require a co-signer, and they remain interest-free while you’re in school and for six months afterward. You don’t have to repay anything until your grace period ends.
And if you get a federal student loan, you may also qualify for a grant, which is free money you don’t need to repay.
However, depending on your circumstances, a loan/grant may not be enough to cover your costs.
With a line of credit, you may qualify for more money than you would from a government loan. You only pay interest on what you actually borrow, and interest rates are sometimes lower than for government loans.
However, you’ll likely need a co-signer, and you must make monthly interest payments as soon as you borrow funds.
It’s important to explore all your options and consider what works best for you.
ARE THERE ANY SPECIAL SUPPORTS FOR ADULTS WHO WANT TO RETRAIN?
Yes. The Skills Boost program is aimed at adult learners who are looking to upgrade their skills by returning to college full time. If you’ve been out of high school for at least 10 years and you qualify for the Canada Student Grant for Full-Time Students, you may receive a $1,600 top-up.
There are initiatives at the provincial level as well. For instance, the Ontario government has a program called Second Career that provides funding to help laid-off workers get skills training for high-demand occupations. The funding can be applied to college programs that take one year or less.
LEARN MORE ABOUT YOUR FINANCIAL AID OPTIONS
Don’t let a tight budget stop you from pursuing career training. You may have more sources of revenue than you realize.
At Herzing, our financial services team can review your situation and discuss your educational funding options. They’ll work with you to come up with a feasible plan.
The first step is finding the training that’s right for you. Click below to see what we offer and how we can help you meet your goals.