Student debt is avoidable

Surviving college or university without incurring debt may seem impossible to many students, but it can be done. Just ask Murray Baker, who graduated from the University of Western Ontario without a cent of debt. The author of The Debt-Free Graduate: How to Survive College or University Without Going Broke (HarperCollins, $16.95), a comprehensive and refreshingly amusing guide to minimizing postsecondary debt, says that the best strategies for surviving postsecondary without an avalanche of debt are preparation and knowing your resources.

“There are a lot of scholarships and bursaries available,” Baker told the Georgia Straight in a phone interview. However, because students don’t go looking for them, often the money sits untouched. “Part of it, too, is that there are scholarships out there that are really well advertised”¦so everybody knows about them so there’s a lot more competition.” Baker pointed out that the previous federal limit of $3,000 for scholarship tax exemptions was lifted in 2006, so “if you can rack up six, seven thousand dollars in scholarships, that’s tax-free money towards your education.”

Bursaries, often offered through community groups, service clubs, religious organizations, and trade unions, are also a lucrative source of educational funding. Although the amount offered through bursaries is often much lower than scholarships (most bursaries are $500 or less), Baker said, “If you accumulate two or three of those, that’s a nice chunk into your pocket.”

Baker recommended Studentawards.com, a free database of scholarships and bursaries available for Canadian high-school, undergraduate, and graduate students, and ScholarshipsCanada, another comprehensive resource for obscure Canadian bursaries. Sites like these make it easy to determine whether or not being a full- or part-time second-year parks, recreation, and leisure-facilities management student at Georgian College in Barrie, Ontario, qualifies a person for free money (it does; there are three $500 bursaries available).

Another key component to avoiding debt is budgeting. Baker said that students should make a detailed budget for themselves at the beginning of the school year. “Figure out what money you have and when it’s available”¦rather than come February [when] you realize you’re out of money and then you have to scramble to go out and get a job and work 20 hours [a week] to make ends meet at the very time you’re getting your final exams coming up and midterm essays.” As well, working between six and 10 hours a week “really doesn’t have a negative impact” on students scholastically, he said. “What it tends to do is force you to be more organized.”

Credit cards are one of the easiest methods of accumulating unnecessary debt, and Baker cautioned students to consider easy credit wisely, especially new students who are unfamiliar with the credit system.

“I think there’s a lack of awareness [especially] when you’re in first year, and that’s why I’m big on avoiding credit cards,” he said. “If you do take out one, wait until second year, till you’ve had a year of balancing your budget for the first time.” If a student must take out a credit card, Baker recommended no-fee cards with a $500 limit.

If a student must take out a loan to fund their education, Baker noted that Canadian student loans have distinct benefits over bank loans, including interest payments by the government for as long as one remains a student and the repayment-assistance program, which provides some relief for underemployed and unemployed individuals.

“If you have a regular bank loan or line of credit and you’re struggling, the bank tends not to be as sympathetic as the student-loan program,” Baker said.

Although Baker said it’s not always possible to graduate without incurring some debt, even a reduction in the amount of potential debt should be considered a success. “If you come out [of postsecondary] with $8,000 worth of debt instead of $25,000, you’re going to be in much better shape to do the things you want to do.”

Follow Miranda Nelson on Twitter @charenton_.