What You Need To Know. Trent s Student Guide to Financial Literacy

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What You Need To Know

Trent’s Student Guide to Financial Literacy

2012-13

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LOANS ANd GrANTS

The Ontario Student Assistance Program (OSAP)

Financial assistance in the form of grants and loans is available through the Ontario Student Assistance Program.

Funded by federal and provincial governments, the program provides interest-free loans and non-repayable grants to students throughout their academic careers. The purpose of the OSAP Student Assistance program is to assist full-time (at least 60% course load or 40% load for students with a permanent disability) students when the financial resources available to them from parents, spouses, summer employment or other sources are insufficient to meet estimated educational costs.

• The best way to find out if you’re eligible for OSAP is to apply • There is no cost or obligation if you apply

• Loans are interest-free and do not need repayment while the student is in school full-time • The maximum funding a student may receive per year is between $13,000 and $14,000 • For students from outside of Ontario or Canada, contact your regional government

for access to student loans

Ontario Tuition Grant

The 30% Off Ontario Tuition for 2012–2013 provides:

• $1680 for university students for a fall/winter session OR • $840 per semester

You could be eligible for 30% off your student tuition if you meet all of the following requirements:

• you’re a full-time student at a public college or university in Ontario • it has been less than four years since you left high school

• you’re in a program that you can apply to directly from high school • you’re a resident of Ontario

• your parents’ gross income is $160,000 or less

You are automatically considered for the grant if you have submitted an OSAP application. If not, you can apply separately on the OSAP website.

The following values were generated using the estimator. These estimates assume a two parent family, with two dependents; one attending post secondary for the fall/winter session, living away from home. Your estimate may vary, depending on your family structure.

Family Income Loan Grant Total Funding

$50,000 $9,510 $3,138 $12,648

$80,000 $10,518 $2,130 $12,648

$100,000 $9,629 N/A $9,629

$120,000 $6,930 N/A $6,930

My estimate:

This estimate does not include the $1680 in Ontario Tuition grant funding for a fall/winter session.

Check the OSAP Aid Estimator online to get an estimate of your funding.

https://osap.gov.on.ca/osapportal

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OThEr FuNdiNG

Employment

Finding employment is often about the approach and strategies you use.

Check out the online work search resources to become an expert (see

www.trentu.ca/careers/students/action_worksearch.php). Visit the Career Centre, attend a workshop or book an individual appointment for further assistance.

Trent Work Study Program (TWSP)

Funded by Trent University, TWSP provides part-time jobs on campus during the study period for full-time students whose financial needs are not met through their government student aid program. Eligibility cards will be available at the Financial Aid Office starting in September. At Trent University, we offer over 300 positions each year including tour guides, athletic instructors, lifeguards, club and group assistants, and research assistants. You may earn up

to $2,000 during the year, and your job can provide valuable work experience. This program is only for domestic students with demonstrated financial need. Please visit the Student Job Board at www.trentu.ca/mytrent to view current postings.

Summer Positions

OSAP expects students who work during the summer to save money for their next study session. You should try to save about $2,000 - $3,000 every summer.

registered Education Savings Plans (rESPs)

RESPs are common sources of funding for many students.

An RESP is a fund put aside for a student, usually by a parent or other family member, to fund the student’s education.

Make sure you report your RESP accurately on OSAP and on your income tax return.

Scholarships

• Scholarships are financial awards given to students based on merit. In addition to academic performance, some scholarships may use additional criteria such as community involvement or athletics.

• Trent University offers scholarships to entering students with averages over 80%. See the How Much Will it Cost brochure or the University Calendar for more information on internal scholarships.

• External scholarships are available for application outside of Trent – see page 9 for websites dedicated to external scholarships

Bursaries

• Bursaries are financial awards given to students who demonstrate a financial need.

Students in receipt of OSAP or other provincial government student aid programs may qualify for bursaries and awards.

• For students who require more funding, Trent offers in-course bursaries available via application in the fall, winter and summer sessions. Visit the Financial Aid website for more information on applications.

• External bursaries are available for application outside of Trent – see page 9 for websites dedicated to external bursaries

Job Finding Tips

Visit the Car

eer Centre and attend the r

esume or work search workshops Attend the Employment Fair

in January to meet employers and apply

for positions

Contact Career Services at careers@trentu.ca or check the Student Job Board via your MyTrent account (click JobBoard).

www.trentu.ca/mytrent

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Student Lines of Credit

A student line of credit is granted to you by a bank and allows you to borrow money up to a maximum per year. You have to pay back what you borrow, along with interest. During your time in school, most banks require you to make monthly payments on the interest of the loan only, and not on the actual balance. You accumulate interest each month. After leaving your postsecondary education, some major institutions give a grace period before you must begin paying back the loan balance itself. Because these loans are from banks, they often require a certain level of income. If you don’t meet the income criteria, the loans require a co-signer who will agree to pay back the loan if you cannot. Keep in mind, the criteria for different lines of credit may vary. It is important to shop around and negotiate to ensure you get the best value!

Student Line of Credit Example

Interest Rate: Prime Rate (3.00%), plus a variance rate (approximately 2.5%) for a total of 5.5%. This rate can vary.

Minimum Payment: During your time as a student and up until 12 months after, you only pay monthly interest.

Afterwards, you pay $50 OR 1% of the balance monthly (whichever is greater).

Sample Monthly Payment: The monthly interest-only payment on a debt of $10,000 at 5.5% interest would be about $46.

Total amount available: Up to $10,000 per year for full-time students for 4 years depending on how you qualify.

Time to pay off: The maximum time allowed is 20 years at minimum payments.

Credit Cards

Be wary of credit cards – they should NOT be used as a major source of funding!!

Banks and financial institutions issue you a card that allows you to spend money up to a pre-set limit. You have to pay back at least a minimum percentage of your ending monthly balance by a set deadline. Interest rates are generally higher than lines of credit. Certain cards that offer rewards have even higher rates of interest.

• You accumulate interest each month

• There is no repayment assistance or grace period • Carrying a balance results in very high interest payments

• Failing to make monthly minimum payments can result in collection procedures and a ruined credit rating

Credit Card Example

Interest Rate: 19.99% on purchases, 21.5% on cash advances. Your interest payments are TRIPLE what you would pay with a student line of credit.

Minimum Payment: A percentage of the monthly ending balance, usually 3%.

Sample Monthly Payment: The monthly interest-only payment on a debt of $10,000 at 21.5% interest would be about

$179. If you paid 3% of the balance, the payment would be $300.

Total amount available: Up to a pre-determined credit limit per month (standard starts at $500).

Time to pay off: While making the minimum monthly payments on a credit card with a balance of $1,000, it will take 26 years and 4 months and will cost over $4,000.

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BudGETiNG

Preparing a budget may seem like a dull task. However, it will help you see clearly if you have enough money to make it through the school year and help identify any budget problems. Use the charts on the following pages to calculate your income and expenses. In case of a shortfall in your budget (total income is less than total expenses), ask yourself:

Do I have an income problem or an expense problem?

Income Problem – Not enough money coming in

• Applying for more external funding can help fill the gap

• Get a job to earn extra money. Check out the Career Centre Job Board for on-campus listings. Try to limit your work to 10 hours per week to avoid a negative impact on your studies.

• Check the Financial Aid website for common OSAP appeal forms, or speak to a Financial Aid staff member • Ask family members for help

• Apply for in-course bursaries. Applications are available on the Financial Aid website starting in September Expense Problem – Too much money going out

• On-campus residence:

Reducing off-campus spending, managing your cell phone bill, cutting down on entertainment and other costs, paying for fewer trips home, or taking a double/triple room with a smaller meal plan can save money • Living on your own:

Finding a place with cheaper rent (by living with roommates) or with utilities included, getting rid of unnecessary services (like cable), paying for fewer trips home, cooking all meals at home, and shopping for sales can help save money

• Living at home:

Cutting down on extra costs, like entertainment, clothing and other extras can help save money

Income Source Amount Received

OSAP

Ontario Tuition Grant Entrance Scholarship Entrance Bursary In-course Bursary

External Scholarships and Bursaries Trent Work Study Program (TWSP) Summer Savings

Parents’ Help RESP

Line of Credit Other

TOTAL INCOME

Saving Tips

Set aside money for savings and paying down debt Build up a “rainy day” fund

Have a savings account with automatic transfers

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Shortfall or Surplus Amount Total Income

(from chart on page 4)

Total Expenses for 8 month term (from chart above)

Calculate:

TOTAL INCOME minus TOTAL EXPENSES (negative number indicates a shortfall)

Budget Tips

Use cash for budgeted expenses Avoid the extras – pack a lunch

Keep all receipts to track spending Budget in some fun

Expenses ^Estimated Amount for Actual Actual Spent Monthly 8 Months Monthly To Date

Tuition $5693

Fees $1225

Books and Supplies $1500

Residence Room & Meal Plan Cost (see housing website)

Rent and Utilities (if off-campus) Groceries

Insurance Gas

Interest Payable

Internet (if off-campus) Home Phone (if off-campus) Cable (if off-campus) Cell Phone

Trips Home Clothing Entertainment Other

TOTAL EXPENSES

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LOANS ANd LONG TErm STuFF

OSAP repayment

Credit Scores

Creditors report your payment history to credit agencies, such as Equifax. These credit agencies are what determines your personal credit score. A credit score is a judgement about the risk you represent financially. The lower the score, the higher the risk of doing business with you. Credit transactions stay with you for up to SEVEN years in Ontario.

Your credit score is based on:

• Your payment history (Have you ever missed a payment on a debt?) • Dealings with collection agencies and bankruptcy

• Your outstanding debts • Your account history

• The number of inquiries made about your credit rating • The type of credit you’re using

To help manage your credit:

• Always pay bills on time, and at least pay the minimum amount of every bill. Especially with credit cards, it is more important to make monthly payments than to pay the full balance.

• Make sure each statement/bill is correct

• Don’t accept any form of credit you don’t understand • Contact your creditor immediately if there are any issues • Don’t go over your credit card limit

• Work out payment plans with creditors if you can’t afford full repayment • Be aware of interest rates and how debt builds up

For OSAP, you are given a six month grace period after full-time studies in which you do not have to repay your loan. Starting payments early and paying more than what is required will save money in interest charges in the long run. Always be sure to make each individual monthly minimum payment! Missing payments, even small ones, may result in default and a damaged credit rating.

OSOG

The Ontario Student Opportunity Grant (OSOG) helps to limit debt to $7,300 per year provided the information on your OSAP application gets verified.

Visit the Canlearn or OSAP website for more information.

Visit the Canlearn website and create an account with the NSLSC.

You can track your loans and estimate future repayments.

www.canlearn.ca Having trouble?

Each year, students go into default when they could have received assistance. Repayment assistance is available through the National Student Loan Service Centre (NSLSC) if:

• You were unable to find a job after graduation

• You had to suddenly leave school and are not prepared to begin loan repayment • Personal or family illness

If for whatever reason you are not able to make your payments, the NSLSC will help. You are allowed to negotiate the type of interest rate and length of your repayment period for your loan. The National Student Loan Service Centre holds a seminar yearly at Trent for more information on loan repayment – this information is available on the Financial Aid website. Visit the Canlearn website to track your student loans and estimate your monthly repayment amounts.

Watch your email and the Financial Aid website in February and March for NSLSC repayment sessions.

www.trentu.ca/financialaid

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Filing Taxes

As a student, you should file a tax return each year. Not filing your taxes could cost you money; you could miss out on some tax credit refunds, and will not be eligible for OSOG loan forgiveness if OSAP can not verify your income with Canada Revenue Agency.

When filing taxes, make sure you know what to include as income and claim the correct deductions. Reporting accurately may qualify you for tax credits, refunds and other benefits.

LiviNG ON YOur OWN

Leases

In order to rent off-campus, landlords will ask you to sign a lease or rental agreement. This is a contract, usually 8-12 months, requiring you to pay your landlord monthly to live on their property. It is important to understand your lease/rental agreement – send it to a parent, guardian or contact who can help translate. Try to find a lease that corresponds with your needs.

Successful Renting

• Be polite, courteous and punctual during viewings • Know what to look for and ask questions

• Consider renting a single room instead of a single apartment to save money • Make sure you are living with responsible, safe people

• Use cheques or money orders to pay for rent (not cash) and always be sure to get receipts • Look for safe buildings with reputable landlords

• Visit the building and area before agreeing to anything • Check with current tenants of prospective buildings • Use the off-campus housing office to locate rentals • When reporting problems to landlords, use email

Security Deposits

Be prepared to pay a security deposit. Security deposits ensure that people don’t improperly break contracts. They are often in the amount of TWO months’ rent (first and last) and you must pay this before you move in.

Utilities and Bills

Know about utilities and bills in advance. Have an idea of the utilities and bills that are covered in your lease, and what you are responsible to pay yourself. Electricity, gas, internet and cable bills can add significant costs to your rental unit. For example, electric heat can be very expensive during the winter months. If you must pay for utilities, ask to see bills from the previous year for the unit.

Plan Ahead

Make a plan with your future roommates and stick to it. Know about what kind of house to look for, what furniture you’ll need and who’s responsible for what. Start planning with your roommates and begin viewings early for the next year! Visit the off-campus housing website for local rental listings.

Check in at the Housing Office at Blackburn Hall or visit the off-campus housing website for rental listings.

www.trentu.ca/housing

Tax Filing Tips

Use a service like QuickTax or get help fr

a tax professional om Keep all statements and receipts thr

oughout the year by doing “shoebox”

accounting

For more information visit the Canada Revenue Agency website.

www.cra-arc.gc.ca

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hOW TO BE A FiNANCiALLY SuCCESSFuL STudENT

• Update your budget monthly and try to stay on track

• Look for deals when shopping; for example check the cost of renting text books instead of buying • Be proactive, do not wait for deadlines. Make all payments on time and apply for aid early.

• Avoid carrying a credit card balance. If you have a balance make sure you pay at least the minimum amount on time every month.

• Limit the number of credit cards you possess • Protect and monitor your credit rating

• Limit the times that you order food and eat out. Try to cook and eat at home as much as possible.

• Limit online purchases. They add up faster then you think.

• Avoid marketing schemes. Ask yourself: Do I really need this?

• Pay for goods and services when you receive them; do not pay ahead of time • Avoid borrowing more money than you need

• Monitor the amount of interest, bank fees and other charges that you pay • Put aside a bit of money for an emergency fund

• Stick to your own plans and do not succumb to peer pressure • Feel good about yourself and make sure to budget in a little fun!

For more financial information or to ask a question drop in at the Financial Aid Office or visit the Financial Aid website.

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rESOurCES

Blackburn Hall Offices

Disability Services Office www.trentu.ca/disabilityservices Health and Wellness Centre www.trentu.ca/healthservices Registrar’s Office

www.trentu.ca/registrar Financial Aid Office www.trentu.ca/financialaid Student Accounts Office www.trentu.ca/financialservices Housing Offices

www.trentu.ca/housing Parking

www.trentu.ca/parking

Career Services - Student Jobs

Career Centre

Champlain College Rm. 204 www.trentu.ca/careers

TCSA Office & Surrounding Bulletin Boards Champlain College Rm. S110

Community Resources

Employment Planning & Counselling Peterborough (EPC) Jobs Office www.epcjobs.ca

Community Counselling & Resource Centre – Credit Counselling www.ccrc-ptbo.com

Ontario Job Centre

www.tcu.gov.on.ca/eng/jobseekers

Government Resources

OSAP

www.osap.gov.on.ca

National Student Loan Service Centre www.canlearn.ca

Canadian Government Scholarships www.scholarships.gc.ca

Office of the Ontario Ombudsman www.ombudsman.on.ca

Office of the Local M.P.P.

www.jeffleal.onmpp.ca Canada Revenue Agency www.cra-arc.gc.ca

Financial Consumer Agency of Canada www.fcac-acfc.gc.ca

Other

Scholarships Canada www.scholarshipscanada.com Student Awards

www.studentawards.com

NOTES

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Financial Aid Office, Trent University

1600 West Bank Drive, Peterborough Ontario K9J 7B8 Telephone: 705.748.1524

Email: financialaid@trentu.ca

What You Need To Know. Trent s Student Guide to Financial Literacy