top of page
Logo widthwize (Banner (Portrait)) (Banner (Landscape))_edited.jpg

Christine's
Competitive Edge Blog

  • alison28006

Going back to school?


Wondering about your Student Loan options and which is best for your situation and how different types of loans can affect your tax bill?


Here’s why I recommend using the government sponsored loans as your first option, if you qualify. So generally speaking, the student loans offered through Post Secondary institutions are backed by the government.


They are usually low interest or interest-free while you are in school and repayment on them only begins after you have stopped attending school. Plus so many people don’t even realize that with the government sponsored student loans, the interest if any that they pay on them once they are in repayment can be included in their tax return as a tax credit, thereby reducing the amount of taxes they may owe for the year.


But if you take a loan from a financial institution (or use a personal line of credit) even if it is called a “student loan” the interest paid is not deductible on your tax return - even though it was used for schooling.


Plus oftentimes you still have to make interest only payments while you are in school, and most often there is no deferral period before full repayments start after you finish school. I personally would recommend getting your initial student loans from the government to take advantage of the no or very low interest while you are in school, as well as the small deferral period after you finish school before the repayment starts.


Once you've stopped attending school and are in that repayment stage, you can then decide whether to keep paying on your government student loans or pay them off with something like a personal line of credit.


Until Next Time,


Christine Walters




7 views0 comments

Comments


bottom of page