TD Canada Trust offers advice on how to manage finances during grad
school so students can plan for the future sooner
TORONTO, July 24, 2013 /CNW/ - Today's post-graduate students face
skyrocketing tuition costs and a tough job market, which creates a
financial challenge after graduation. According to new research from TD
Canada Trust, 30% of post-grad students accumulate more debt than
expected and 40% find it difficult to make minimum repayments on
student loans in the first two years after graduating, ultimately
preventing many new graduates from moving onto the next phase of their
lives. In fact, many admit to postponing a number of life milestones,
including buying a first home (40%), starting a family (36%), getting
married (23%) and even moving out of their family home (18%), until
student debts are repaid.
"A Master's degree offers the opportunity to delve deeper into a field
of study, but the balancing act of borrowing heavily to finance
education versus saving for the future has to be taken into account,"
said Shahz Beig, associate vice-president, TD Canada Trust. "For
students making the personal decision to begin post-graduate studies,
it's vital to create a financial plan and work with an expert to find
smart financing options, like a student line of credit, to help pay for
Beig, a recent post-graduate student himself, provides tips on how
post-graduate students can borrow responsibly and balance education
costs with other financial priorities:
Save, save, save - Start saving as early as possible and invest the money in a
tax-efficient way to help it grow. Students should also apply for
scholarships, grants and bursaries and consider borrowing money from
their RSP to put towards their education. The Lifelong Learning Plan
(LLP) allows students to withdraw up to $10,000 a year from an RSP to
finance eligible education, to a maximum of $20,000 over four years.
Live on a budget - It's important to diligently monitor daily and monthly cash flow to
ensure debt doesn't escalate. To create a budget, list all funds
available from scholarships, grants, work, family and savings. Then
calculate all expenses for the month, including tuition fees, books and
rent, in addition to food, entertainment and personal items. Subtract
the estimated expenses from the available funds. If it's a negative
balance, take another look at how to reduce discretionary spending.
Consider affordable ways to fill any gaps in your savings, such as a
student line of credit to help cover essential expenses like tuition,
books and living costs.
Create a long-term financial plan - Meet with a financial advisor to help create a realistic plan for
borrowing that also includes debt repayment and investments for the
future. An effective tool for student financing is a professional
Student Line of Credit (SLOC). Designed specifically for post-graduate
students, a professional SLOC allows students to control how much of
their credit limit they want to withdraw, and when. Unlike a
traditional loan or credit card, a SLOC can offer a lower interest rate
and increased flexibility when it comes to repayment.
About the TD Canada Trust Savings Poll
TD Bank Group commissioned Environics Research Group (www.environics.ca) to conduct an online custom survey of 590 Canadians who are currently
attending post-graduate education or attended in the past three years.
Responses were collected between January 10 and 25, 2013.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches, with convenient hours to serve customers better. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
SOURCE: TD Canada Trust
For further information:
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Paradigm Public Relations
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Sandra De Carvalho
TD Bank Group