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Pay Down OSAP or Save?

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I intend to apply for OSAP and a LOC for law school (provided I am accepted). I currently have some debt from undergraduate years with OSAP, totalling in the 30,000 range. I also had some other debt that was around 10,000. Recently, I was gifted 30,000 from my grandparents to help pay down OSAP/help pay for law school. This will be the only substantial financial help I will receive from family.

from what I understand, money contributed to your education by parents or spouse are not assets in the eyes of OSAP. Following that, OSAP would see that money as an asset if I were to save it. As of the moment, the money is sitting in a TFSA, 10,000 less as I paid off the misc debt. 

My question is, would it be better to pay down some OSAP and liquidate that 20k (or 18k or any other amount) to ensure a higher grant amount from OSAP? Or would it be better to hang on to the money for now? I work full time, minimum wage (approx 27k gross) and don’t have any other substantial assets.

i used the OSAP aid calculator to see how having the 20k would impact the amount generated for each school, and there were only slight changes. However, it is but an automated calculator, and I would rather apply with some certainty as to how much I will receive.

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From my perspective there is zero reason to pay off OSAP until you graduate. If we consider inflation, an interest free loan is actually making you a small amount of money. Why not apply for the LOC, pay off your first year of tuition using the 30,000 and live off whatever is left over, then apply for OSAP later in the year (you can apply as late as February, I believe)? This should ensure you'll receive the maximum amount of OSAP for which you're eligible while allowing you to not touch the LOC for your first year, and you'd probably be able to pay off the other debt if it's currently accruing interest.

For the record the automated calculator has always been accurate for me, other than the grants which they'll estimate even if you're not eligible.

Edited by chaboywb

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