How students can plan for post-secondary education with as little debt as possible

Post secondary education costs money. Depending on the program, sometimes a lot of it. This is true for university, college, and even trade schools.

It can be difficult to know for certain whether the potential payoff of better career opportunities and earning potential is worth the often-sizable investment. Only you know whether post-secondary education is right for you.

However, if you decide this is something you want to pursue, there are steps every student can take to prepare for these costs and minimize the future financial impacts of pursuing a higher education.

Budgeting and planning advice for students

Approaching a post-secondary education can feel overwhelming if you don’t have significant savings to rely on. Grants, scholarships, and bursaries may be able to alleviate the financial burden somewhat — and you should apply for as many of these as you can — but it’s unlikely these will cover all the costs involved. Even with supplemental funding and any money Mom and Dad may have set aside, a combination of student loans and employment income may also be necessary.

Begin planning as early as possible for what your anticipated costs will be and how you will afford them. Remember, it is never too late to start thinking about how you will manage the cost associated with a post secondary education. Some important questions to consider include:

Will you stay home or move away for school?

Different schools have different programs and learning opportunities. You’ll need to weigh the potential cost savings of staying in town and (if possible) living with your parents for free or reduced rent against the benefits of moving elsewhere.

Be mindful of so-called ‘better’ universities as they often charge a premium for tuition and housing. Some larger Canadian cities also have a significantly higher cost of living and expensive rental markets. This shouldn’t necessarily dictate your decision, but it should certainly be a contributing factor. It is imperative that you do your homework when looking at your options and the related costs to avoid any surprises.

What costs do you need to budget for?

Post-secondary education has several costs that can quickly add up and which you’ll need to budget for. Many students aren’t aware of some of these costs until they receive an acceptance package from the school or attend their first orientation session. Here’s what you should expect to budget for, at a minimum:

• Tuition (including lab fees, if applicable)
• Books (always ask if used is an option as these can be significantly cheaper)
• Residence / accommodations (if applicable)
• Transportation and / or parking
• Health insurance (if applicable)
• Meal card / groceries (if applicable)

In addition, you’ll want to budget for spending money so you can have fun and fully enjoy the post-secondary experience. There are lots of sporting and recreational clubs on campus, plus opportunities to socialize and make new friends. But, like all things, there will be a cost attached to these extracurricular activities.

What’s a reasonable academic and work schedule?

Post-secondary homework is unlike anything most students experience in the K-12 system. Reading assignments, term papers, exams, and classes can be intense and time consuming. You’ll need to balance your academic and employment schedules to allow for adequate rest and learning and earning enough to support yourself.

Remember also to consider is your opportunities for cooperative education placements, internships, and summer student positions. These are often well-paying, provide valuable work experience, and help you make professional connections while you’re still in school.

What’s your plan to pay off debt?

Even if you want to minimize the amount of debt you take on, it’s likely you will still need a small amount of student loans or a student line of credit to make the numbers work. If you do need to take on debt, find out as early as possible:

• How much you’ll need to borrow and whether a co-signer will be required
• How much you qualify for and at what interest rate
• Whether you qualify for federal and provincial student loans
• How long you’ll have to repay your loan
• What your approximate monthly repayments will be after you graduate, along with when repayment is expected to commence.

There’s nothing wrong with borrowing money to better yourself — but keeping this to a minimum and aiming to pay off any debts as soon as possible will position you for future financial success. Make sure that you are fully aware of ALL the repayment options for the different types of financial assistance you have received.

Many students are understandably shocked by the difficulty of repaying their loans on an entry level wage. While it may seem like you have nothing but time and income growth ahead of you, it’s easy to become overwhelmed by the perils of adulthood.

Planning your realistic financial prospects and goals ahead of time gives you a head start to save, plan, and budget accordingly for your reality four to five years in the future.