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Questions about OSAP, LOC, Summer Income

A photo of serenelove serenelove
Hi everyone!

Two questions:
1. If I apply for a student line of credit, do I include that as 'money saved' or 'asset' on my OSAP application?
2. Is it even possible to get student line of credit and OSAP together? or will either one of them say at one point 'sorry, we can't lend you any thing any more'... if so, at what point can that happen?
3. This question has nothing to do with the above two questions. If I make more summer income that estimated, I understand that OSAP funding may go down.. but is it the loan portion that goes down? or the grant portion? or both?

Thank you so much! I would like to know the answer to first two questions preferrably from someone who has taken both LOC and OSAP together at the same time..or from someone who knows the answer for sure!
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A photo of Anonymous Anonymous

@serenelove wrote
1. If I apply for a student line of credit, do I include that as 'money saved' or 'asset' on my OSAP application?



Neither. A line of credit is just basically a loan from your bank. It's not an asset because you don't own it, and it's not money saved because you're not saving money.


2. Is it even possible to get student line of credit and OSAP together? or will either one of them say at one point 'sorry, we can't lend you any thing any more'... if so, at what point can that happen?


You can. I'd recommend seeing how much OSAP will give you, and then use the LOC to fill the gap if there is one. LOC's are usually much more money and carry monthly interest rates, so use them wisely.


3. This question has nothing to do with the above two questions. If I make more summer income that estimated, I understand that OSAP funding may go down.. but is it the loan portion that goes down? or the grant portion? or both?



They would be reduced proportionally. Your grant is based off the percentage of your loan.


Thank you so much! I would like to know the answer to first two questions preferrably from someone who has taken both LOC and OSAP together at the same time..or from someone who knows the answer for sure!


I haven't taken out an LOC but I've dealt with OSAP for 3 years now, and I have a fairly above average knowledge of banking and loans.
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A photo of serenelove serenelove
Thank you for your reply, much appreciated :)

Here is the scenario:
I have been on OSAP for 2 years. I plan on being on OSAP for 2.5 more years.
After that, I plan on applying to dental school.. where fees is $50K/year.. or more if you add living expenses. So, OSAP won't come close in helping me with that. But I am going to still apply for it so I get some atleast.. and that way I don't have to worry about repaying OSAP or OSAP loan accruing interest and stuff.. while I am in dental school.
Now, how will I afford dental school? I plan to take out a LOC (I have looked into all banks, CIBC and RBC are great, their interest rates are MUCH lower than OSAP.. they are prime + 1% only).
This is OSAP's interest rate.. which is too high.. and ever changing when they want:
"Interest accrues on your loan principal beginning the first day of the month following the end of your full-time study period. The actual interest rates and conditions for repayment are set at the time you enter repayment. On Canada Student Loan portion, the current fixed rate of interest is prime + 5% and the current variable (floating) rate is prime + 2.5%. Ontario Student Loan portion has an interest rate of prime + 1%."

So I wanted to know, can I take student LOC for dental school WHILE taking OSAP (as much as they can give).. no matter the amount of loan I use from LOC and the loan I would already have from OSAP? Basically, since dental school costs a fortune and therefore I will be using a fortune out of the LOC every year, will OSAP come to me and say 'SORRY, you're under too much debt now, no more osap for you', and get me started on repayment? Could LOC do that to me too? 'You're on too much OSAP loan, we can't lend you anything or even start you on LOC'

Sorry for the long message, I had to explain the details.
Also, IF I can take LOC and OSAP together without them turning their back on me at any point, then I plan to use LOC to pay off my OSAP after dental school, then keep paying off LOC only. It will save $1000s on OSAP interest that I would've paid.
That's one other reason I want to know.. that at what point can either LOC or OSAP say 'sorry, you cant borrow anymore'.. because if after dental school, LOC says 'sorry, you can't take any more LOCs', I won't be able to pay off OSAP with LOC.

Please let me know. I would really like to know the answers.
Thank you! and I hope these answers will help a lot of other people out there in saving money!
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A photo of mynameismattgotmlgo mynameismattgotmlgo
^ Yes, absolutely. Lots of people in professional programs have both OSAP/government student loans AND professional student LOCs. I'm not sure if you're aware of this, but four years after graduating from high school, you will be considered an independent person by OSAP. This effectively means that OSAP will no longer take into consideration your parents' income. Because of that, I have been able to qualify for the max amount of OSAP in the past two years. ~$14,000/year (only $7,000/year of which I have to pay back).

Professional student LOCs, particularly for dentistry and medicine, are AWESOME. You get a lot of money at a low interest rate - banks want you start doing banking with them, as all they see in you is future dollar signs. I think most Canadian banks will give dentistry students like $160,000 of credit over four years, usually evenly divided between the years. Once you finish school, you will need to start paying off both your OSAP and your LOC. If you still have money available on your LOC, then, yes, you'll probably save a little bit by using it to pay off your OSAP.

To answer a couple of your questions specifically:
"'SORRY, you're under too much debt now, no more osap for you, and get me started on repayment'? Could LOC do that to me too? 'You're on too much OSAP loan, we can't lend you anything or even start you on LOC'" Hahahahaha. Sorry. Had to laugh there. No bank is going to turn a dentistry student away for that reason. THEY WANT YOU. And that's not how OSAP operates either.

"That's one other reason I want to know.. that at what point can either LOC or OSAP say 'sorry, you cant borrow anymore" This happens only when you cease to be a student (in the case of OSAP) or cease to be a dental student (in the case of the LOC), i.e. when you graduate. Though, obviously, you can't overdraw on your LOC. If you're given $40,000/year x 4 years, then you can't take out more than $40,000 in one year (unless you have some left over from a previous year) or more than $160,000 total.
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A photo of serenelove serenelove
"Hahahahaha. Sorry. Had to laugh there. No bank is going to turn a dentistry student away for that reason. THEY WANT YOU. And that's not how OSAP operates either"
^ LOL!, and thank you for answering all my questions.
It clarified a lot of things for me.
Specially the fact that I can't use more than what LOC provides (which really sucks..bahh). I thought it could be expanded upon request, lol! CIBC btw is currently giving $200k for professional student LOC! I hope that stays around when I need to apply for it..well, I am sure it will.. more $$$$$$$ for them.
Yes, for the past two years that I have been on OSAP, I was considered independent. I graduated from high school in 2004 and hold a BSc. Honours in Health Sciences degree, which I never took OSAP or any loan for, hence, my inexperience with this matter. I am in a second degree currently.
Thank you once again for your reply, I am sure this thread will help out some others too.
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A photo of mynameismattgotmlgo mynameismattgotmlgo
Yeah, I don't think you need to be concerned about finances, given that you'll most likely end up with a 200k LOC.

You're welcome.
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