Estimated reading time: 9 minutes
Learn how I paid back my Ontario Student Assistance Program OSAP loan fast so I could save for my future.
Table of contents
- A Student Loan Is A Big Deal
- My OSAP Loan Story
- Money Was Not My First Passion
- McMaster University
- Surprise Pregnancy
- Baby, OSAP, And Returning To School
- Graduation + Osap Loans Debt Reality
- How I Paid My OSAP Loan Back Fast
- Tips for Students
- Teach Financial Education
- What Is An OSAP Loan?
- Subscribe To Canadian Budget Binder
A Student Loan Is A Big Deal
When I finished my education, I never dreamed of having such a large OSAP (Ontario Students Assistance Program) loan.
Sure, I would sign off twice a year to receive the money, but when you only accept a couple of thousand at a time, it is hard to picture the total amount of money I had been given.
If I only knew then what I know now, I may have made different financial choices.
I hope all the parents and students who read my story can take away some valuable tips to use along their path to financial freedom.
My OSAP Loan 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 still had a lavish 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 told me I would need to save for further years and other expenses.
Money Was Not My First Passion
I did not understand the concept of money and where it would come from to pay for my education but that it would be paid for.
At this stage, I was nineteen going on twenty, 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, haircuts, etc.).
Honestly, I did not understand the concept of finances and budgeting until I was around twenty-two in my fourth year of university.
I had a great job teaching swimming at a local pool, but I spent at least half of my income.
The money would be spent on going to the movies, purchasing designer clothes, etc.
I remember my worst purchase being a pager 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 wanted it to keep up with everyone else.
Money to me at that stage had no meaning – I did not understand the concepts of utilities or paying for groceries – it was always taken care of for me.
McMaster University
I was thrilled when I was accepted at McMaster University in the Kinesiology program.
My original goal was to become a chiropractor (a lot of this was family pressure).
The first year’s tuition was just over $5000 and overwhelming for me.
I paid for that first year in full before moving to Hamilton, Ontario, where McMaster University stands.
At the time, I did not qualify for OSAP due to my family income.
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 decided to live off campus – when we worked out the numbers, it was cheaper to rent off-campus and purchase my food than live on campus and purchase their food plans.
Surprise Pregnancy
About three months into my first year, I was pregnant.
It was a scary and exciting time for me.
My husband (boyfriend then) 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.
A visit to our school’s financial department for help made me break 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 never forget.
I still donate to McMaster’s bursary fund, which touched me so much that it gave me shelter, food in my stomach, and hope.
Baby, OSAP, And Returning To School
In August, I delivered my son; he was a dream, and 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 they handed out.
My schooling was always paid for first, then books; the rest were for living expenses.
Many students I knew used their loans to pay for trips, new computers, and 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.
Could I have been smarter with my money?
I never made silly big purchases, but I could have been smarter with my loan (if only I knew then what I know now!).
Graduation + Osap Loans Debt Reality
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.
A woman at the bank helped us understand essential finances.
I was taught how to save, follow a budget, and why it is essential to pay off our debts.
We had so many goals!
I doubled up my OSAP re-payments and paid bi-weekly to increase the number of payments.
We started a savings fund 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 three years after I graduated from University.
My OSAP loan was paid in full (what an incredible feeling off my shoulders!), and we added another member to our family, a son!
Sadly, I did not find a job in my field.
To use my degree, and would have to go on to post-graduate studies that were too expensive for me.
I had to focus on my young family, which meant finding a job.
It took me 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, and the income levels were much lower than expected.
How I Paid My OSAP Loan Back Fast
- I only took what I needed (I did not take the extra and use it to travel or go out!)
- Applied for bursaries and grants
- I made double payments monthly and paid bi-weekly (they only wanted $220, so I paid $440)
- Budgeting and cutting out the extras that weren’t needed >>> Download your free budget now.
- 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 everyday grocery staples), generic medications (Life brand versus Advil or Tylenol)
- Extra work on the side
- Earned extra cash online or using a mobile app
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 can pay it off.
Be realistic and work if you can during the school year part 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 total 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 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 Financial Education
For parents, please teach your children the concept of money and debt from a young age.
Help them understand the family finances and how much life indeed does cost.
Get them to help out with groceries, organizing budgets, and what the meaning of earning money and responsibility is.
We are honest with our children and 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 offers up his allowance to take us all out for McDonald’s if he wishes, and it makes my heart melt!
What Is An OSAP Loan?
Looking back at my OSAP loan and my years at University, I wish someone had made me see how much that loan would cost me.
I would have saved more if I had known more about OSAP and finances.
Unfortunately, I had every opportunity but did not and would have worked more hours or odd jobs to save more.
Lastly, I would have spent wiser.
OSAP can be a helpful tool, but it needs to be used appropriately.
Students must be taught how to control better finances, proper spending habits, and the consequences of improper spending.
Click the link To learn more about OSAP and how to apply.
Find out how much OSAP you qualify for or if you can get FREE Tuition with the online OSAP Calculator.
Discussion Question:
How did you pay your OSAP back fast? Share your tips in the comment section for other students looking for help.
Editors Note:
Thank you, Carla, for sharing your personal story, which was very motivational.
You explain that any obstacles life throws our way, we can still reach our goals.
I hope it inspires students and parents to encourage children to save, spend less, and budget through school.
Contribution Post by:
Carla D works full-time in the Department of Medicine and is married with two young boys.
Budgeting and financing have been a long and arduous journey for them as a family, but it has been the most successful.
We have found that budgeting and taking control of our finances have allowed us to grow as a family and achieve our individual goals.
Do you have a story or a question you’d like to share on CBB? Email me at canadianbudgetbinder@yahoo.ca
Well done for going back and getting it done after having your son! I also applaud you for now giving back to the bursary funds. I wish more of my friends who benefited from scholarships and bursaries were giving back to them, to pay it forward.
Thank you Anne. It was a hard choice but one I wanted to do for myself. I think paying it forward is so important, especially to the bursary funds! Every little bit counts. That bursary gave me so much more than money – it gave me hope and courage to continue on in my studies.
We’ve been saving $500 a month for our kids education from the month our first was born. We consider it a bill and a non-negotiable one. Hopefully our kids will find alternative ways to get money for college, but we’ll be prepared for when the time comes for them for leave and learn.
Looks like you did a good job getting on those loans. Mine start coming due around the beginning of next year and I intend on doing something similar to you to get rid of them.
Great job paying off your loans, even if you had to do it the hard way =)
Great job paying off your loans and great advice on taking only what you need in terms of school loans. I was in a similar situation of having a lot of loans and really was not taught much by my parents in terms of being financially prudent. I think one of the most loving things you can do for your children is teach them the importance of making wise financial decisions.
I learned a lot from my own mistakes. I think as a parent we want to shelter our children from
“bad” things but we should show them that money is not just there, we need to budget, food is expensive, loans have to be paid back and the interest is hefty!, etc…I wish I had someone teaching me that from the beginning! I am trying really hard to teach my boys this lesson.
I wish my son would have the “Ah HA” moment that you had. You have a bright future ahead because of your grasp of financial responsability.
As a parent we can only teach our kids what they are willing to learn. In my case my son did not want to know about money management and personal financial responsability. I tried and the harder I tried the angrier he got. When I quit footing the bill for him, and had no more to give he attacked me for saying no, there is no money.
We can, and do try to teach and prepare our kids for their future, but some kids just don’t want to listen. They feel they will always know better than their parents.
It took a long time Lindsay for me and came with a lot of tears but it did come. I am glad and grateful it did though. We worked really hard as a team to pay it all off. I hope my children learn from our mistakes. We are very honest with them. I am so sorry to hear about your son. I know people that have gone through the same thing and it is the most difficult thing to go through. I think sometimes the best thing in the end is to cut them off (as hard as it is too!).
I completely agree that universities need to be more forthcoming with loan repayment realities. If you got an estimate of how much your monthly payment was and for how many years, it could influence how many loans you decide to take. You are an adult at that point in your life, but if your parents have always paid all the bills, you are a bit clueless as to how the real world works. Great job on rolling with whatever came your way. This shows there are really no excuses if you are motivated to pay off debt.
Agreed! I think they should send you a letter throughout your studies explaining your current debt load, interest rate when it comes up, how many years it will take to repay, etc….Thanks again!
Good for you or doing what it takes to raise a son and continue your education!
Thank you! It was a hard choice but well worth it!
Carla, what a great example of sober-minded money management! I too know many students who act as if OSAP is free money and spend it with no plan going forward. Good job with the self-discipline.
I think everybody who actively uses a budget has had a turning point somewhere that jolted them into realizing they needed to manage their money better. Mine was when I bought my first home and I sat down and thought, “man I gotta get my finances organized!” I had dug myself out of foolish debt a couple years prior, but was still spending willy-nilly.
I’ve been dedicated to budgeting ever since, and not only has the careful planning and tracking paid off – I’ve paid down a significant portion of my mortgage, and I already have the money set aside for my upcoming wedding, as well as ‘savings funds’ for several other future big ticket items – but its actually given me a real sense of freedom to know I’ve got the big things in the future taken care of!
Great tips to pay off loans. Sacrifice and discipline goes a long way.
That’s true and sometimes it’s best to learn from the people who have already, been there done that.
it took me 4 years but I am officially free from student loans! I owed 35,000 dollars and it took me a little bit but I am finally free of it! Yahoo.
Congratulations Sara!!! If you ever want to share your story in a blog post email me I’d love to have you help and inspire other students who want the help and guidance.
You did a good job paying your debt off early! Luckily for you though, you didn’t have much debt. I went back to school as a single mother of two young children and I owe about $60,000 to OSAP. My monthly payments are over $600 so there’s no way I can double up my payments!
Yes $1200 a month is a big chunk of money unless you are making big money which most new grads aren’t doing, if ever. Good luck paying it off and remember there is always that light at the end of the tunnel… keep at it. Mr.CBB
Question – knowing what you know now what is your answer to this question.
Assume that like your parents we have not saved enough to pay for sons university and we have not saved for retirement and we have consumer debt . Would you recommend
1) parents paying for school by postponing debt repayments and retirement saving.
2) parents paying off debt and then investing in retirement. Child borrows for school.
Assume those are the only 2 options.
Hi Susan
I would 100% pay off debt and save for retirement. Your child has many more saving years than you will besides a paid education is only nice if parents can afford it. Not many can. In that instance the child should find a job part time during the school year and fulltime during the summer and save money and apply for OSAP or just apply for OSAP. Ideally having a chold participate in education savings is ideal. I’m not sure how old your son is. Hope that helps a bit. I know it can be a tough spot to be in. Do you mind if I use your question on my FB page tonight?.
Hello, I came across this blog a few years ago (circa 2012-2013) when I was looking for some encouragement for paying off osap. I eventually did but recently remembered your story and looked to see if it was still online. I hope that it keeps encouraging people that it is possible to pay off your osap.
Hi Zanakay,
Thanks for coming back to leave a message about your journey with OSAP. It’s not easy but rewarding when it’s finally paid.
Mr. CBB