Applying For Student Loans Part 2 of 3

Applying for student loans can be a fairly trying and difficult experience, especially your first time around the block, but never fear, we are here to help you iron out the wrinkles.  Before we get into the nuts-and-bolts of filling out application forms we need to quickly address the provincial differences concerning student loan applications.  Remember that when you apply for student loans you are basically applying for a provincial student loan and a Canada student loan.  Student loans are tied to your residency status, and that status is determined by the last province you lived in for 12 consecutive months without attending full-time post-secondary study.  Specific and updated information can be found on www.canlearn.ca, but here is a summary of how student loan applications are handled on a provincial basis (circa 2012):

1. For residents of Nunavut, the Northwest Territories, and Quebec, Canada student loans are not applicable as the provinces administer their own student loan programs totally separately from the federal government.  You only have to apply for the provincial program.
2. Residents of the Yukon have a great grants program that takes the place of provincial student loans; therefore, the only actual loans available to Yukon residents are Canada student loans.  Make sure to look into their grant program though if you have lived in the Yukon for a couple of years.
3. Residents of Manitoba, Alberta, Nova Scotia, and/or Prince Edward Island only have to fill out their provincial student loan forms and then the Canada student loan will be administered using that information as well.  It is somewhat important to note though that the loans will stay separate entities.
4. Finally, if you live in Saskatchewan, Ontario, New Brunswick, Newfoundland and Labrador, and/or British Columbia your provincial student loans are fully integrated with the federal student loan program, and you the NSLSC will handle all of the administration

Now that you can kind of wrap your arms around what a student loan is and where your money will be coming from, you need to make sure you are eligible.  Here are the requirements from the Government of Canada:

To apply for government student loans and grants, you must:

• be a Canadian citizen, a permanent resident of Canada or a protected person;
• be a permanent resident of a province or territory that issues government student loans and grants;
• demonstrate financial need;
• be enrolled in a degree, diploma or certificate program that runs for at least 12 weeks in a 15-week period and is offered by a designated post-secondary institution;
• be taking at least 60 percent of a full course load if you are a full-time student, or between 20 and 59 percent of a full course load if you are a part-time student;
• pass a credit check if you are 22 or older and are applying for student loans and grants for the first time; and
• not have exhausted your maximum lifetime limit of financial assistance, including interest-free status

Getting Your Ducks In a Row

If you sit down to look at student loans for the first time and negotiate a website or forms without getting some information together first, I guarantee you will be frustrated.  Filling out student loan applications isn’t my idea of a good time, but you’ll make things a lot easier on yourself if you get the following things in order before you start (there is nothing like being timed out of your online session eight times as you look for information):

 

• Social Insurance Number
• Your tax returns from last year
• Calculate your revenue you have made during the summer (commonly referred to as the “pre-study period”).  This includes any earnings, government assistance, scholarship income, etc.  The number you’ll need is the gross income (the number before any deductions are made… not the fact you earned so little during the summer that it was in fact disgusting).  You may have to estimate for the final month of the pre-study period
• An estimate of your study period income from all sources for the academic year you are about to embark on (this can be verified at a later date)
• Records and receipts of any moving expenses you incurred or will incur when you move from and to your place of study
• A complete record of your academic status since high school (ie. when did you take course, were you a full-time or part-time student, etc.)
• Google Map your commuting distance to school (if you’re driving a fair distance daily)
• If you are considered a dependent student you’ll need a copy of your parents’ taxes from last year
• If you’re married or common-law status get a copy of your spouse’s taxes from last year
• The account number and balances of any bank accounts that you have (if you’re not sure of your bank account number use a cheque to figure it out)
• The details of any other financial instruments you might have (RRSPs, trusts, etc.)
• The details of any RESP income you will be receiving during the year
• Write down the year and model of your car if you own one
• Know the name and length of your current educational program
• Check on your student status for last year and the upcoming year (chances are if you attended 60% of a full course load you were considered a full-time student)
• Find out what your tuition will be for the upcoming year.  All mandatory fees qualify as well.  For a full description of which fees qualify and which don’t, check canlearn.ca.  If you register for your courses before August the figure should be accessible in your online account.  If you haven’t registered yet, the school should be able to able to give you a pretty good estimate if you call the Registrar’s Office or Administration Centre.

Once you are drowning in this sea of information and are likely ready to tear up whatever is nearest, you are ready to begin the fun and fulfilling process that is a student loan application.

As we noted before, not all Canadian students are eligible for a student loan.  The formula that government have come up with for determining if you get any help is:

Allowable Costs – Resources = Assessed Need

There should be a little description of what constitutes an “allowable cost” on your form, but some examples are tuition and mandatory fees, textbooks, computers and related hardware, transportation, living allowances and child/daycare allowances if applicable.  Resources at a student’s disposal could include but are not limited to any savings, earnings, RRSPs, trusts, RESP withdrawals, scholarships, vehicle ownership, and parent’s income if applicable.

The idea of assessed need is based upon the minimal amount that you need in order to complete your studies.  A student loan is not meant to und a week at the beach in February.  Keep that in mind as you receive your new windfall.

You can good get a good estimate of what you will receive for your student loan, as well as the information tools at Canlearn.

Since your eyes probably glazed over somewhere near the fourth paragraph, here are the short form answers to a few frequently asked questions about student loans:

• If any information you provided on your student loan changes, you are responsible for informing the relevant administrative organization for your province.
• Most official sources claim that student loan applications will take four to six weeks to process.  In my experience they often take a little longer than that, but online applications do get processed more quickly.
• You do not receive all of your student loan at once.  The normal allocation is to get 60% at the beginning of the first term, and 40% at the beginning of the second term.
• You need to submit a new application  every year to be considered for a loan.
• Making early payments while you are still in school is completely acceptable.
• There is a process to contest the results of your student loan applications; however, the rules are applied pretty thoroughly in my experience.

Keep In Mind

When applying for student loans I can’t emphasize enough how important it is to be organized and to submit your application well before the deadlines.  The earlier you get the ball rolling on this stuff the easier it will be.  Students that miss deadlines and are counting on the funding can end up in world of hurt.  If there is one thing I learned while going through post-secondary education it is not to depend on bureaucratic organizations to handle forms properly and/or efficiently.  Give yourself a “buffer” in case something gets mixed up or “lost in the mail”.

One hidden benefit of student loans, and the reason I now recommend many people apply for them even if they are only going to get a very small amount of money, is the fact that it opens up a world of extra opportunities at scholarships, bursaries and grants.  Many of these awards require a student to, “Demonstrate financial need.”  What that means 99% of the time is that you have a student loan of some kind that you can show as proof that you are in financial need.  There are even automatic awards at many institutions that will be given based on financial need and GPA or another consideration.  Check out the scholarships section for more information.

Hope you are enjoying the series so far. The last section will be up on Thursday!