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Kristin van Ouwerkerk graduated as a registered nurse from UPEI with $40,000 in student loans. She was 22.
That’s when her mother invited van Ouwerkerk to stay with her.
There was one rule.
“As long as you pitch in with some food and you do your chores and you help me around the house, you can live with me for rent free.”
With a nurse’s income and no expenses, van Ouwerkerk started to build a bank account. She had not accumulated student credit card debt and her vehicle was paid off.
She asked her mother for advice.
“What am I going to do with all this money?”
Her mother, an accountant, knew what she would do.
“Pay off your debt.”
“Well, I don’t have debt.”
“You can start paying off your student loan then.”
That’s what she did.
“Every month I would put a balloon payment on it. I was feeling like I was accomplishing something, so I really wanted to keep it going,” she said. “It took me a year and a half, almost two years to pay it off. It was a beautiful day when I got my letter saying it was fully paid off.”
A student loan payment is $400 – 500 a month. It can take years to pay it off. But van Ouwerkerk didn’t consider her student loan as debt.
“People often say keep it as long as you can because you get your interest back on your tax return,” she said.
Actually, in Canada, you get part of it back. You receive a 15 per cent tax credit on the interest you pay on government student loans.
Still van Ouwerkerk considered it better to pay off any debt with higher interest rates, then focus on her student loans, she said.
However, it can also be a financial burden that lasts decades.
How to keep your student loan to a minimum
Madison James is a student support worker at Holland College. She offers advice to students so they graduate with a minimal student loan.
- Use your student loan money for school purposes only.
- Work in the summer and save your money.
- Cut out non-essential spending.
- Use online budgeting tools to determine income and expenses.
- Talk to a financial advisor.
- Apply for awards, scholarships and bursaries.
“I really want to stress the importance of applying for scholarships because there’s tons of scholarships that people don’t even apply to. Even if you’re not sure if you’re eligible,” James said.
