Are you aspiring for higher education in Canada but worried about the higher education costs? The good news is there are both federal and provincial loan options for Canadian students. The interest rate, however, will vary from one place to another.
Federal loans for students
You will get Federal loans here that come with 2.5 percent plus prime interest rate. The repayment period will begin 6 months after you finish your college. “Plus prime” means average prime rate of Canadian banks. It fluctuates from time to time. At present (in 1st quarter of 2019), it’s something like 3.95%.
Now, let’s check the provincial loans-
Provinces with lowest rate of tuition
These provinces are Newfoundland & Labrador, Manitoba and Quebec. You are lucky if you are a resident of these provinces as they are considered to be the best when it comes to financial aid for students. The tuition rate in Newfoundland & Labrador is $2,885 for each semester while it is $4,501 and $2,961 for Manitoba and Quebec respectively.
The best part about Newfoundland & Labrador is that you don’t have payable student loans here any more. Instead, the province extends non-repayable grants for qualifying students. These grants offer up till $100 per week.
What’s so special about Quebec is its amazingly low rate of interest. It is an incredible 0.5 percent plus prime which amounts to 4.45 percent overall rate of interest.
And you will be pleasantly surprised to know, Manitoba has recently started student loans with 0 percent interest rate!
Ontario & Alberta student loans
In regards to student loans in Ontario, everything is taken care of by OSAP (Ontario Student Assistance Program). As you register for the loan, the entire process will be handled by the OSAP site. The good thing is this province too extends a reasonably low rate of interest which comes to 4.95 percent (1 percent plus prime)
The student loan program in Alberta is taken care of by Student Aid Alberta Service Centre. It’s to note here the province counts on the CIBC’s prime rate to determine rate of interest for student loan. If you go for floating rate, the interest rate will vary along with prime. No additional interest will be added to it.
British Columbia student loans
Interestingly, the province has reduced student loan repayment interest rate to prime rate. If the rate of prime is 3.95 percent, the interest percentage would be 3.95 percent as well.
While student loans are great, it would be better if parents are wise enough to start to save early. This is especially applicable for new parents. If you can start saving for your child’s higher education right from his birth or infancy, you will get to save a lot on the student loan burden. You may take the help of RESP by Heritage Education Funds here. As per this plan, you will get to create a savings account which would be solely meant for college education for your kid. You will get more information on Heritage and its employees here at https://ca.indeed.com/cmp/Heritage-Education-Funds-Inc/reviews.