While financial aid for American students is fairly centralized, especially at the federal level, Canadian students may find the landscape of applying for Canada financial aid to be more confusing and dispersed. Canadian citizens typically support colleges and universities with a higher portion of tax revenue than their neighbors south of the border, so many quality Canadian schools offer substantially lower tuition rates. Despite this, some Canadian students still need to bridge the gap between financial aid, savings and the total cost of higher education.
Students who meet specific qualifications may receive a Canada Study Grant or Canada Access Grant (which is for students with permanent disabilities) directly from the government. These grants do not have to be repaid.
To earn Canada Study Grants, you must meet at least one of the following criteria:
- You are permanently disabled ($2,000 per loan per year under a Canada Access Student Grant for Students with Permanent Disabilities)
- You require exceptional financial assistance ($250 per month of study under a Grant for Students from Low-Income Families)
- You have children under the age of 12 (or over 12 if there are permanently disabled) and are low-income ($200 per month per child under the Canada Student Grant for Full-Time Students with Dependents)
If you fail to complete your degree program, or if you leave school early for any reason, you must repay your Canada Study Grants.
In addition to government grants, some independent organizations also award grants to students who meet specific criteria. For instance, each year the Soroptimist Foundation of Canada offers several $7,500 grants to female Canadian graduate students who are studying for fields that will prepare them to help women. For instance, providing legal counselling and assistance to women, counselling mature women entering or re-entering the labor market, or counseling women in crisis.
The federal and provincial governments and some other organizations earmark funds each year to help Canadian students overcome financial need and attend the college or university of their choice. Like scholarships, bursaries are awards that do not have to be repaid by students, but bursaries also factor in the student's financial need (while a scholarship may not). Bursaries are distributed by the government and other organizations to students on the basis of academic excellence or demonstrated acts of remarkable citizenship.
Here are some examples of bursaries available organizations outside of the government:
- Kin Canada Bursaries: This service organization awards $1,000 bursaries to Canadian students across the country based on community and school involvement, knowledge of Kin Canada and financial need. Applications are due February 1 to the club closest to the applicant.
- Canadian Nurses Foundation: The Canadian Nurses Foundation offers several scholarships and bursaries to nursing students at all levels who demonstrate potential for nursing leadership. These awards range in value from $1,000 to $10,000. Applicants must have at least three semesters remaining in their program after June 30. Each bursary has its own eligibility requirements and special awards are available to male nursing students and Aboriginal students.
The Canadian government splits the burden of providing subsidized student loans with provincial aid organizations. Qualifying full-time students can receive the lesser of $210 per week or 60 percent of the student's assessed financial need in the form of a Canada Student Loan, generally in two disbursements per year. To qualify, you'd file an application with the province where you live. Your provincial student aid is determined in concert with federal aid based on this application. You must be a Canadian citizen or permanent resident to qualify.
You must start repaying a Canada Student Loan six months after you graduate; however, interest continues to accrue during the six-month non-payment period between when you finished and start making loan payments. You can choose between a fixed interest rate (where the rate stays the same for the duration of your loan) of the prime rate + 5 percent or a variable interest rate (where the rate fluctuates based on Bank of Canada's prime rate) of the prime rate + 2.5 percent. Repayment assistance program may be available depending on your circumstances.
If you don't qualify for student loans or don't qualify for enough in loans and other aid, you might consider a student loan or a student line of credit from your local bank or credit union. Student lines of credit are offered by several Canadian financial institutions. You must make regular interest payments on a student line of credit while you're in school based on the amount you draw from the credit line. However, you don't have to start making principal payments until 12 months after graduation (compared to six months for a Canada Student Loan). At that time, you're required to pay one percent a month. It is not uncommon for Canadian students to hold simultaneous student loans from multiple lenders, each of whom has contributed a small amount to cover the cost of attending college.
How to Apply for Provincial Grants, Bursaries and Student Loans
Contact the support organization that oversees student financial aid for your province or territory. Although each organization uses slightly different application processes, most allow you to apply for nearly the entire range of available financial aid options using a single form. It will take approximately four to six weeks for your regional financial aid organization to process your application and coordinate your awards with the federal government.
When the support organization reviews your application and verifies your financial need, the organization will match you up with loans, bursaries and grants for which you appear eligible. To apply for outside scholarships, contact sponsoring organizations directly and follow their instructions. Financial aid counselors at your chosen college or university can help you identify potential sources of private education funding.
Each one of Canada's provinces maintains its own support organizations and financial aid opportunities for citizens and permanent residents. Visit the site for your home province. If you are a dependent, your residency is defined by the province where your parent(s) or guardian have lived for the past 12 months.
- British Columbia
- New Brunswick
- Newfoundland & Labrador
- Northwest Territories
- Nova Scotia
- Prince Edward Island
How do you determine if you are a dependent?
Financial aid for Canadian students can sometimes vary depending on your dependent status. Under Canadian law, you can be considered a dependent if you are:
- Under the age of 22, without a spouse or common-law partner.
- Above the age of 22 but attending a college or a university full time and financially dependent on at least one parent since before the age of 22.
- Above the age of 22 but financially dependent on at least one parent because of a mental or physical disability since before the age of 22.
Factors like failing to maintain at least 60 percent of a full course load, declaring bankruptcy, letting previous loans go into default or failing to maintain academic progress can also impact eligibility for financial aid.
Private foundations and community organizations administer smaller scholarship funds throughout Canada. Usually, these scholarships reward students who meet certain eligibility conditions, such as ethnicity, community involvement, academic achievement, or residency in a particular community. This is by no means an exhaustive list, but here are some scholarships to help jumpstart your search:
- Schulich Leader Scholarships: Each year, the Schulich Leader Scholarships program awards 50 scholarships to undergraduate students pursuing science, technology, engineering and mathematics at top Canadian universities. Engineering degrees carry a scholarship of $80,000, while science, technology and math degrees are eligible for $60,000. The 2016 application deadline is February 2.
- Retail as a Career Scholarship Program: The Retail Council of Canada awards scholarships to Canadian students pursuing a degree related to retail, business or marketing and currently working full or part time in the retail industry. In 2016, the Retail Council plans to award one $,5000 Interac Scholarship, one $3,000 Retail Hall of Fame Scholarship and twenty $1,000 Industry-sponsored scholarships. Application deadline is March 31.
- Google Canada Anita Borg Memorial Scholarship: Google awards scholarships of $5,000 to Canadian women studying computer science, computer engineering or closely related technical fields. Applicants must complete an online application and submit a current resume, general background, academic transcripts, two letters of reference and responses to four essay questions.
- TD Scholarships for Community Leadership: Each year, TD awards 20 scholarships to students in their final year of high school who demonstrate a commitment to solving a community problem or improving their community. Eighty finalists are chosen from five regions across Canada and those finalists participate in interviews. Each scholarship carries up to $10,000 per year for tuition and $7,500 a year for living expenses (up to four years), plus mentoring opportunities and paid summer employment.
Although provincial or territorial financial aid organizations can connect you to private scholarship foundations and competitions, you should also use relationships in your own community to uncover opportunities to earn or win extra money for college. Talk to your local bank manager, church leaders, and politicians about scholarship competitions they may have heard about in your area.
Canadian colleges and universities receive matching funds from the government to subsidize a small number of on-campus work/study jobs. Like any part-time job, a work/study position requires you to show up on time and perform your job well. Most work/study positions are entry-level positions that involve helping full-time university staff handle day-to-day tasks.
Colleges and universities determine the number of work/study positions that they will fund each year. A school's financial aid office will pre-qualify students to apply for work/study positions. However, many Canadian students report that the number of eligible students usually exceeds the pool of available jobs within the first few weeks of the school year.
Therefore, experts recommend that you make connections on campus and apply for open work/study positions as early in the semester as possible. Expect to work the same job for the entire school year, since very few work/study students leave their positions midway through the year.
If you plan to study outside of Canada and receive Canada student aid, you will typically need to enroll in a Canadian university's exchange program and have financial aid funds deposited into a Canadian bank account. Many Canadian universities have reciprocal agreements with universities in other parts of the world so that you can study abroad at another school for a term or longer while paying tuition at your home university. Upon return, the credits earned while abroad will generally transfer to your home university, but students should confirm the transferability of credits and whether these classes fit their graduate requirements before going abroad.
Registered Education Savings Plans
Canadian parents can take advantage of numerous chances to grow a college fund using a Registered Education Savings Plan (RESP). As of 2007, a RESP has no annual contribution limit, but it carries a lifetime contribution limit of $50,000.
Through the Canada Education Savings Grant (CESG), the federal government will also contribute 20 percent of that year's contributions to the account in the form of a grant if the beneficiary of the RESP is age 17 or under, (up to a lifetime limit of $7,200 per beneficiary). Lower income families may qualify for additional grants, and some provinces also contribute. A RESP can stay open for up to 36 years (or up to 40 years if the beneficiary is eligible for the disability tax credit).
If the beneficiary of a CESG does not attend a college or university, he or she must withdraw the grant money from their RESP in order to repay the government. Withdrawals of CESG funds from the RESP are taxable as income to the student, which means they usually pass through with little or no tax under the student's tax rate.
An RESP can be invested in stocks, bonds, mutual funds or guaranteed investment certificates. The federal government does not offer a tax deduction for RESP contributions, but the savings in the account grow tax-free. Students can later withdraw funds and spend investment earnings on eligible educational expenses.
Tax Implications for Students
The Canadian government provides additional benefits for graduates who make timely payments on their outstanding student loans. Loan recipients can deduct from their taxable income any interest payments made on federal or provincial loans. Graduates cannot, however, deduct the interest payments made on loans to private lenders or to family members. The student loan interest deduction is a nonrefundable credit, meaning it cannot generate a refund. If you have no income in a given tax year, you can carry that interest forward to any of the next five years and maintain the value of that deduction.
Most of the Canadian provinces and territories, excluding Quebec, do not tax scholarships and financial rewards provided you receive it for a post-secondary program.
Additional Resources for Canadian Students
- CanLearn - This is the official financial aid hub for the Federal Government of Canada.
- ScholarshipsCanada - Use this database of scholarships to match opportunities to your needs and academic interests.
- Financial Planner - Plug your figures into this interactive tool to discover your potential college expenses.
- Grants for Students with Permanent Disabilities, September 30, 2013, http://www.servicecanada.gc.ca/eng/goc/grant_disabilities.shtml
- Grants for Students from Low-Income Families, November 20, 2013, http://www.servicecanada.gc.ca/eng/goc/grant_low_income.shtml
- Canada Student Grant for Full-Time Students with Dependents, January 21, 2016, http://www.esdc.gc.ca/en/student_grants/csg/dependants.page
- Soroptimst Foundation of Canada, http://www.soroptimistfoundation.ca
- Kin Canada Bursaries, https://www.kincanada.ca/bursaries
- Canadian Nurses Foundation - Scholarship Types, http://cnf-fiic.ca/what-we-do/scholarships-and-bursaries/scholarship-types/
- Calculating Amounts 2015/2016, June 11, 2015, http://www.aes.gov.nl.ca/studentaid/whatwedo/financial_assistance_201516.html
- The Canada Student Loans Program, http://www.degrees.ca/loans/cslp/
- How to choose between student loans, lines of credit, The Globe and Mail, September 4, 2015, http://www.theglobeandmail.com/globe-investor/personal-finance/financial-road-map/how-to-choose-between-student-loans-lines-of-credit/article4517812/
- Canada-Ontario Integrated Student Loan, https://osap.gov.on.ca/OSAPPortal/en/A-ZListofAid/UCONT004192.html
- What are Schulich Leader Scholarships, http://www.schulichleaders.com/about-scholarship
- Retail as a Career Scholarship Program, http://www.retailcouncil.org/memberservices/retail-education/retail-as-a-career-scholarship-program
- The Google Anita Borg Memorial Scholarship: Canada, http://www.google.ca/anitaborg/
- TD Scholarships for Community Leadership, https://www.tdcanadatrust.com/products-services/banking/student-life/scholarship-for-community-leadership/index.jsp
- Registered Education Savings Plans, http://www.ci.com/orderform/pdf/resp/registered_education_savings_plans_e.pdf
- Financial Awards that Qualify for a Scholarship Exemption https://turbotax.intuit.ca/tax-resources/student-taxes/scholarship-exemption.jsp