Personal Finance

avoiding interest on OSAP

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  • Sep 17th, 2014 11:37 am
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[OP]
Sr. Member
Jan 16, 2010
629 posts
21 upvotes

avoiding interest on OSAP

hello. so i've managed to amass about $25,000 in student debt. i'm in school till october 31st after which interest will begin on the loan. i have $13,000 i can pay rite away. and i'll probably have the rest within the year. during this year i want no interest to incur on my loan. what should i do? is it possible to register for a single online course through a continuing education at u of t and just stop intersest that way as technically i would still be in school. anyone have any suggestions? i do have a job but that i started this year, its part time, and it pays only enough to live. but within the year i'll have the rest of the money and i can pay. any suggestions would be welcomed.
8 replies
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User avatar
Aug 22, 2003
15541 posts
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Niagara Falls
jewville wrote:
Aug 29th, 2014 10:55 pm
hello. so i've managed to amass about $25,000 in student debt. i'm in school till october 31st after which interest will begin on the loan. i have $13,000 i can pay rite away. and i'll probably have the rest within the year. during this year i want no interest to incur on my loan. what should i do? is it possible to register for a single online course through a continuing education at u of t and just stop intersest that way as technically i would still be in school. anyone have any suggestions? i do have a job but that i started this year, its part time, and it pays only enough to live. but within the year i'll have the rest of the money and i can pay. any suggestions would be welcomed.
Interest starts 6 months after ceasing to be a fulltime student. There is nothing you can do to stop it unless you are in school fulltime. If you want to minimize interest, pay what you can now on it. Then put what you can on it each payday, don't wait till end of month ass the interest is daily. You're going to pay interest but you will minimize it paying it that way...
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Sr. Member
Dec 3, 2013
607 posts
252 upvotes
Brampton/waterloo
Osap is prime plus 3, so atm 6% interest rate, depending on if you have a good record, you can apply for other loans or creditlines at lower interest rate, I know that MBNA gives 0% on cash transfers for first time customers on their mastercard, but you will need to be very careful, you should be 100% sure that you will be able to pay the mastercard off within their promotion time (1 year) or else if you dont have money after that you will be charged full interest. but if you are guaranteed you can pay in 18 months (6 months interest free, and then 12 month promotion) the promotion can work for you and save you interest.
Deal Fanatic
Aug 21, 2007
5105 posts
294 upvotes
Markham
i dont know if its still an option, but i believe you can apply for interest relief if you have no/low income, which the loan basically the...payments are covered by gov't...i think thats how it worked....i remember my brother had to use it for about 1 year...you get approved 6 months at a time...

http://www.canlearn.ca/eng/loans_grants ... ance.shtml
Deal Expert
May 30, 2005
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Richmond Hill
CSK'sMom wrote:
Aug 29th, 2014 11:03 pm
Interest starts 6 months after ceasing to be a fulltime student. There is nothing you can do to stop it unless you are in school fulltime. If you want to minimize interest, pay what you can now on it. Then put what you can on it each payday, don't wait till end of month ass the interest is daily. You're going to pay interest but you will minimize it paying it that way...
Payments start 6 months later, not interest.

Interest is calculated on your loan from the day you graduate. You just don't have to pay anything towards your loan until 6 months later.
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Oct 29, 2010
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Jon Lai wrote:
Aug 30th, 2014 8:06 pm
Payments start 6 months later, not interest.

Interest is calculated on your loan from the day you graduate. You just don't have to pay anything towards your loan until 6 months later.
It's not the day you graduate, it's the day you're not full time student anymore. So if you're about to finish but have 1 course left, you can't apply for OSAP anymore because you're not full time and the 6 month timer will start to tick because again, you're not full time.
So in this case, a typical semester is 4 months, you will have 2 more months after you finish school before you have to start pay back.
Deal Fanatic
Mar 24, 2008
5617 posts
1714 upvotes
Toronto
jewville wrote:
Aug 29th, 2014 10:55 pm
hello. so i've managed to amass about $25,000 in student debt. i'm in school till october 31st after which interest will begin on the loan. i have $13,000 i can pay rite away. and i'll probably have the rest within the year. during this year i want no interest to incur on my loan. what should i do? is it possible to register for a single online course through a continuing education at u of t and just stop intersest that way as technically i would still be in school. anyone have any suggestions? i do have a job but that i started this year, its part time, and it pays only enough to live. but within the year i'll have the rest of the money and i can pay. any suggestions would be welcomed.
IIRC, if you don't have income, you can apply for interest relief for up to 2 years after being a full time student. I'd do that instead of trying other loop holes such as registering in courses. In any case, registering in a course will cost you more money than just paying the damn interest. Also, enrolling in just one course does not make you a full time student anyways.
Banned
Sep 10, 2014
694 posts
144 upvotes
CSK'sMom wrote:
Aug 29th, 2014 11:03 pm
Then put what you can on it each payday, don't wait till end of month ass the interest is daily.
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User avatar
Jun 2, 2009
2738 posts
165 upvotes
Toronto
proof of low income will qualify you for interest relief.
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