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I never dreamed that I’d have such a large OSAP (Ontario Students Assistance Program) loan when I finished my education. Sure I would sign off twice a year to receive the money but when you are only accepting a couple of thousand at a time it is hard to picture the total amount of money that I had been given.

If I only knew then what I know now than I may have made different choices when it came to my personal finances. I hope that all the parents and students who read my story can take away some valuable tips to use along their path towards financial freedom.

My Story

My name is Carla and I grew up in a second generation Italian home in a nice neighbourhood with my parents and two siblings in the Greater Toronto Area. As kids we never went without, our parents put us in many activities, sports, etc. We did not go on fancy trips but we still had a great lifestyle. My parents never involved us in finances nor explained budgets or bills, everything was always paid for and that was just what was expected.

My parents saved for some of my education (roughly half of my first year’s tuition) but they did tell me that I would need to save for further years and any other expenses. For me at the stage I was in I did not understand the concept of money and where the money would come from to pay for my education but that it would be paid for.  I was nineteen going on twenty at this stage but I can honestly say I never quite understood the concept. I knew I should save money so I did before moving out but I would also spend just as much on silly purchases (cottages, movies, clothes, hair cuts, etc.). I do not think I truly understood the concept of finances and budgeting until I was in my fourth year of university around twenty two.

I had a great job teaching swimming at a local pool but I did spend at least half of my income on going out to the movies and purchasing designer clothes etc. I remember my worst purchase being a pager that I had to hide from my parents. A pager is a small device where people can call and submit their number and it would beep to let me know to call them back. It had a monthly cost as well. I did not need it but I wanted it to keep up with everyone else. Money to me at that stage really had no meaning – I did not understand the concepts of utilities, having to pay for groceries – it was always taken care of for me.

McMaster University

When I was accepted at McMaster University in the Kinesiology program I was thrilled. My original goal was to become a chiropractor (a lot of this was family pressure). My first year’s tuition came out to just over $5000. I paid for that first year in full before even having to move to Hamilton, Ontario where McMaster University stands. I did not qualify at the time for OSAP due to my family income so I thought I would be okay and this ‘school debt’ problem everyone was worried about would not happen to me. Books my first year (something I did not calculate!) came out to just under another $1000 (and I even purchased some second-hand!). I made the decision to live off campus – when we worked out the numbers it was cheaper to rent off campus and purchase my own food than live on campus and purchase their food plans.

This Was Not In The Plans

About three months into my first year I found out I was pregnant. It was a scary and exciting time for me. My husband (boyfriend at that time) supported me and encouraged me to continue my education. It was about three months after that reality hit. I was almost seven months pregnant; I had run out of money, had no job, no family or friends in the area and did not know where to turn to. I went into our school’s financial department and broke down in their office. They gave me an emergency subsidy and helped me find a job. It is something to this day that I will always remember. I still give donations to McMaster’s bursary fund as it touched me so much as it allowed me to have shelter over my head, food in my stomach and hope.

The Baby, OSAP and Back To School

I delivered my son in August and he was a dream. I was so in love with him! I made the tough choice to go back to school and this time I did qualify for OSAP and several of the bursaries that they handed out. I took all of it. My schooling was always paid for first, than books and the rest was for living expenses. I know many students that took their loans and used it to pay for trips, new computers, alcohol. I still feel the maturity and the understanding of the concepts of debt are not there at such a young age in all students. I never made silly big purchases but I know I could have been smarter with my loan (if only I knew then what I know now!).

Graduation

When I graduated I received a lovely letter stating that I owed $16,000 in OSAP loans and had to re-pay the loan over ten years at a rate of $210 a month!! At that age, ten years is so long!!  I knew I wanted out of debt and that we had to make big decisions. We worked together and developed a budget. We met a lovely woman at the bank who helped us to understand finances, how to save, how to follow a budget and why it is important to pay off our debts. We had so many goals!

I doubled up my OSAP re-payments and chose to pay bi-weekly to increase the amount of payments. We started a savings fund to save for our wedding. Five (long!) years later we saved up enough for a wedding and paid for it in full with cash! We were married 3 years after I graduated University. I paid off my OSAP loan in full (what an incredible feeling off of my shoulders!) and added another member to our family, a son!

I did not find a job in my field – to use my degree I would have to go on to post graduate studies that were by far just too expensive for me. I had to focus on my young family and that meant finding a job. It took my two months to find my first job and another seven to find the job that I currently am in now. My income was not what was expected! But I was not the only one who found this problem (unless you went into nursing!). We all found very few jobs out there and the income levels were a lot lower than what was expected.

How I Paid Off My Osap Loan Fast

• I only took what I needed (did not take the extra and use it to travel or go out!)
• Applied for the bursaries and grants
• Made double payments monthly and also paid bi-weekly (they only wanted $220 so I paid $440)
• Budgeting and cutting out the extras that weren’t needed
• Purchasing clothes on sale- (I learned quickly that a $100 pair of jeans is NOT worth the expense!).
• Keeping it simple opting for generic labels- In the kitchen (ex. using store brand products for common grocery staples), generic medications (Life brand versus Advil or Tylenol)
• Extra work on the side

Tips For Students

My best advice for students is to understand how a  budget works and use one, understand what the debt will do to you and how you will be able to pay it off. Be realistic and work if you can during the school year part-time and full-time in the summer to save up for school. Only take what you need from OSAP, if you don’t need it don’t take it. You never have to take the full amount. Do not be shy to head into the financial department at your school and see if you qualify for bursaries or if you are really stuck if they have emergency funding.

After you graduate – make a plan and keep on budgeting! If you can make double payments, apply tax refunds to your debt, work weekends or live at home with your parents to help pay it off quicker.

Teach Kids About Money

For parents, please teach your children from a young age the concept of money and debt! Help them understand the family finances and how much life truly does cost. Get them to help out with groceries, organizing budgets and what the meaning of earning money and responsibility is. We are so honest with our children – we tell them where the money is going, how much things cost; if we buy this item we cannot get another, etc. My son amazes me when he will offer up his allowance to take us all out for McDonald’s if he is wishing for it and it makes my heart melt!

Looking back now at my OSAP loan and my years at university I wish that someone had made me see how much that OSAP loan would cost me in the long run. If I knew more about OSAP and finances I would have saved more (I had every opportunity to do so but did not), I would have worked more hours and more odds jobs to save more and I would have spent smarter. OSAP can be a useful tool but needs to be used appropriately. Students need to be taught how to better control finances, proper spending habits and the consequences of improper spending.

Click the link To learn more about OSAP and how to apply.

Editors Note: Thank-you Carla for sharing your personal story  which was very motivational. You explain to us that any obstacles life throws our way we can still reach our goals. I too hope it inspires not only students but also parents to encourage their children to save, spend less and budget their way through school.

Contribution Post by: Carla D who works full time in the Department of Medicine. She is married with two young boys. Budgeting and financing has been a long and hard journey for them as family but has been the most successful. We have found that budgeting and taking control of our finances has allowed us to grow as a family and achieve our individuals goals.

Image courtesy of  David Castillo Dominici/ FreeDigitalPhotos.net

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