• Last Updated:
  • Jun 14th, 2019 12:01 pm
Tags:
[OP]
Member
Dec 26, 2010
345 posts
69 upvotes
SW Ontario

Student Debt

My wife went to school full time and graduated in Dec. During the time she studied she didnt work. As a result we have accumulated some debt
  1. OSAP $10k. Interest rest is at 6.5% (from memory)
  2. LOC $8k. Interest at 5.3%
We got an statement from OSAP indicating she needs to start paying. Apparently OSAP interest have been accumulating for those six months
My wife is working for a non for profit so in theory she can an additional OSAP reprieve for six months (I presume interest keep accumulating)
I assume interest from OSAP are fully tax deductible? Is there a limit/gotcha to this?
I am trying to think whether this is a no brainer and I should pay the minimum for OSAP and pay LOC first.
Appreciate any recommendations
2 replies
Member
Apr 2, 2013
351 posts
239 upvotes
St. Catharines
Yes Interest for OSAP is tax deductible. You get about 30% back come tax time essentially so it makes more sense to deal with the LoC first. And yes, interest still accumulates.
[OP]
Member
Dec 26, 2010
345 posts
69 upvotes
SW Ontario
How is this 30% calculated? Does it depend on your bracket? Can deduction be transferred to spouse on higher bracket?

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)