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Esco455

Gov loans vs PSLOC

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Howdy folks,

So I've been accepted to UNB, and I got through my undergraduate degree without any debt. As such, I'm a total noob at this financing thing. Is there a difference between government student loans and a line of credit for law students, and if so, which is better?

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Government loans don't charge interests while you're in school whereas a line of credit does. Once you're out of law school though, the government will start charging you interest and the interest rate will likely be higher than the one on the line of credit. So the best way to finance your education for most people will be to take out gov student loans and use that source of money first before reaching into the PSLOC. If you think you'll need more than what the gov will loan you, take out a PSLOC. The bank will only charge you interests on what you use so there's little harm in applying for one. (By 'charging interest' I mean that interests will accrue but you won't NEED to pay anything while you're in school).

Once you're done with school, you can pay back all of your gov loans using your PSLOC if you still have space on it. By doing that, you'll be paying the bank's rate of interest as opposed to the gov's (which is higher).

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Posted (edited)

In addidtion to what andi28 said, most people I know ended up using both government student loans and lines of credit.

When you apply for government student loans, there is a chance (depending on your province and financial situation) that you will also receive grants which do not need to be paid back. For that reason, I would say it is almost always worth applying for government student loans.

The reason most people also have a line of credit with a bank is because the government students loans are simply not large enough to cover post-secondary expenses (tuition, textbooks, etc.) and living expenses (rent, transportation, groceries, entertainment, phone bills, etc.).

Edited by newfie93
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