For students who feel they aren’t in need of a student loan, it might surprise them to learn that it might not be a bad idea to apply for one anyway.
Peter Wilson, the associate director of scholarships and bursaries at York University in Toronto, says if a student is found to be in need of a student loan, it opens up many financial assistance opportunities for them that would otherwise not exist.
“The government is saying you have financial need and what that then does is make the student open and eligible for so many more awards and bursaries, so much more free money, government initiatives, grants, all kinds of things,” he says.
Even if a student doesn’t use the loan, since interest doesn’t start accruing until after the end of their study period for the federal portion of a Canada Student Loan, they can repay it without having accumulated any interest.
Students would be wise to place the fund into a separate bank account, ensuring they don’t spend the money.
The account would ideally be one with zero fees that pays interest. In this case, students could actually earn a little money off the transaction at the end of their studies.
Given the uncertainty of life, a student loan can act as a safety net to deal with unexpected expenses, such as a computer dying or a flight home to attend a funeral. “There’s your emergency fund sitting there,” notes Wilson.
If students do end up using part of or the entire loan, they will have 10 years to repay it.
Wilson says there is no harm in trying to get a loan.
“If you don’t get it, then you don’t get it. But it doesn’t hurt because there’s no interest on it anyway,” he says.