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Student Loan vs LOC

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Hi everyone! 

I noticed that so many more people on this forum have opted for a LOC (Scotia Bank seems to be the way to go) as opposed to a student loan. Does anyone have any insight? Which of the two is better? 

I will be attending UBC. The BC government just recently eliminated interest rates on all government issued loans. I’ve also heard that the federal government will eliminate interest rates until 2023 (not sure if that’s actually true). 

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You can usually get less with loans than with a LOC. Assuming the Loans come from the Gov (whether provincial or federal, or both), repayment usually starts sooner with loans (ex: 6 months after graduation) than with a LOC (sometimes 1 year+ after graduation). Interest rates are typically higher with provincial loans, but that can vary. Assuming interest applies in your case, interest on loans only starts to accrue when repayment commences, whereas interest accrues on a LOC as soon as you use funds. I also think interest paid on student loans can be deducted for income tax purposes, but interest on an LOC may not. I would get some actual tax advice on that one. Best to speak with a financial adviser or someone with actual professional knowledge of the situation to find out what works best for you.

 

But as masterofnut said, a lot of people do a combination of loans and LOC (that's what I did!).

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Most people need student loans and a LOC to finance law school. Most (maybe all?) student loans don't incur interest while you are in school. LOCs start incurring interest as soon as you take the money. So, you will want use student loans first during law school to save on interest and only draw on your LOC as needed. After you graduate, it may make sense to use your LOC to pay off your student loans if the the interest rate on your LOC is lower than the interest rate on your student loans. However, you get a tax credit for paying interest on student loans but not a LOC. Also, you usually have to apply for student loans to be eligible for student grants (non-repayable loans) and financial aid from school. It's stupid in almost all scenarios to finance law school with just a LOC. 

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Student loans as in OSAP? Can I get osap, it says doctorate degree on the website but what government stuff is everyone talking about. 
Does OSAP at least cover tuition 
I got into Ryerson. 

Edited by Nini

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7 minutes ago, Nini said:

Student loans as in OSAP? Can I get osap, it says doctorate degree on the website but what government stuff is everyone talking about. 
I got into Ryerson. 

OSAP is available to pretty much any student in Ontario. You'll absolutely be eligible if you're going to Ryerson. 

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1 minute ago, masterofnut said:

OSAP is available to pretty much any student in Ontario. You'll absolutely be eligible if you're going to Ryerson. 

Thank youuu 

does it at least cover tuition

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23 minutes ago, Nini said:

Student loans as in OSAP? Can I get osap, it says doctorate degree on the website but what government stuff is everyone talking about. 
Does OSAP at least cover tuition 
I got into Ryerson. 

You can get OSAP as long as you're a resident of Ontario. Otherwise, I'm pretty sure you have to get them from your home province, even if you aren't living there (or planning to return) while in school.

It may not cover all of the tuition, since Ryerson is on the more expensive end, but I'm not familiar with Ontario's student aid. My guess is it would cover at least a large portion, but it depends on your finances. 

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43 minutes ago, Liavas said:

You can get OSAP as long as you're a resident of Ontario. Otherwise, I'm pretty sure you have to get them from your home province, even if you aren't living there (or planning to return) while in school.

It may not cover all of the tuition, since Ryerson is on the more expensive end, but I'm not familiar with Ontario's student aid. My guess is it would cover at least a large portion, but it depends on your finances. 

Thank you 

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5 hours ago, Nini said:

Thank youuu 

does it at least cover tuition

Ryerson's tuition is (I think) $21,000. Myself and most other law students I know (at a couple different schools) got a $6k grant + a $12k loan, just to give you an approximate sense. So I doubt OSAP will cover it all for you. But that's why people get lines of credit from the bank as well. 

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1 hour ago, masterofnut said:

Ryerson's tuition is (I think) $21,000. Myself and most other law students I know (at a couple different schools) got a $6k grant + a $12k loan, just to give you an approximate sense. So I doubt OSAP will cover it all for you. But that's why people get lines of credit from the bank as well. 

Got it Thank you 

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