Understanding student loans
For most students, navigating student loans may be like navigating a minefield, blindfolded.
In a recent report released by the Canadian Alliance of Student Associations (CASA), one in three students failed a financial aid literacy test that asked just seven basic questions about student loans.
While the necessary information is available to students, Alexi White, executive director for the Ontario Undergraduate Student Association (OUSA) and partner in the 2009 survey, explained that it is not presented in an easy-to-find and easy-to-understand way. “We have to make the system less complex,” he said.
The study revealed that students will turn to family and friends for information over trying to navigate the government’s overly complex system of delivering information.
Less complex is exactly what the province’s Ministry of Training, Colleges and Universities (MTCU) is hoping to achieve with its new website and application platform was launched in early May.
Annette Phillips, director of communications for the MTCU, said that the new website, which received more than 6.5 million hits in its first week, is more user friendly and makes the application process easier to work through.
The survey also revealed that students had limited knowledge of scholarships and bursaries offered by the province. Nearly half of the students surveyed were unaware that bursaries were available to students who are in need of assistance, but did not take out loans.
“There are ways that they can get help, they just don’t know that,” said White.
Phillips said that a complete listing of all bursaries and scholarships are available on the new website.
Both White and Phillips expressed that students who are in need of help should speak to the student awards office at their institution.
Ruth MacNeil, manager of student awards at Laurier, noted a few key things students should keep in mind when applying for student loans. Above all, she said, students should apply early and remember that money they borrow has to be paid back.
Students should also have a budget that reflects the loan dispersal process. 60 per cent of the student loan is distributed in September and much of this may go to paying outstanding monies owed to the institution.
Come January, the remaining 40 per cent of the loan is distributed. As such, students unaware of this may run short of money in the winter term.
Student loans may be challenging to navigate, but this alone does not dissuade many students from trying. “Post-secondary education is so beneficial to students’ futures,” White said. “Students are willing to go into debt for that.”