Student Loan Strategies

Student loans can be a lifesaver when it comes to financing school. However, they can quickly become a major burden if the payments are unmanageable or if you have a hard time finding a job at your expected salary when you graduate. Here are some tips for avoiding problems with student loans later:

• Calculate the cost of your expected student loan payments before you borrow and compare them to the salary you realistically expect to earn when you graduate. Generally, your payments shouldn't exceed 10% of your expected income. Any credit card payments should be included in that 10%.
• Graduate school can mean significantly more student loan debt if you must borrow to help pay for it. Consider looking for a job with tuition benefits and attending graduate school while you work.
• Check with your school and your provincial government for additional programs regarding your career choices and loan forgiveness.
• If you anticipate having trouble paying back your student loans, look into options for flexible interest relief, debt reduction, disability benefits, and revising the terms of your loan. If you fall behind, you'll have fewer options available to you, so be proactive. Contact the National Student Loans Service Centre for more help at www.canlearn.ca or by phone at 1-888-815-4514. While you may be anxious to graduate as soon as possible, working full or part-time and attending school part-time may allow you to get valuable work experience while keeping loan balances at a more manageable level.

Excerpted from "Budgeting 101: Your Money Guide For Getting Through School". Reproduced with permission of Consolidated Credit Counseling Services of Canada Inc., www.consolidatedcredit.ca.

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