Pay Off Student Debt and Save For the Future

Tips and Advice to Help Students and Young Professionals Get Out of Debt Faster

For many, student loan debt is the barometer used to measure their stress and stability. High interest rates coupled with low wage jobs after college or university can produce what feels like life’s very first financial crisis.

It does not have to feel that way. In fact, student loan debt is something that can be utilized to help better prepare young people for when they start accumulating actual household debt, or a line of credit to support the family.

The strategy employed must juggle the realities each loan recipient is experiencing, but the overarching characteristics from one student loan recipient to another are often nearly identical.

Debt help is something everyone needs, and the following tips could separate your student loan situation from the tragic, credit score destroying experience many people face after mishandling their own student loan repayment process.

Pay Debt First or Save First?

It is important to note that every student has their own individual circumstances to deal with when they finally finish their education. Some students have the choice of remaining at home with their parents, opening up a wider set of options as they decide whether to start paying their loans back, start saving, or both.

Most graduating students do not have the rent-free option, forcing them to tackle their debt and living expenses at the same time.

Students who find employment right away will have to take into account expenses such as rent and food as they embark on a repayment strategy.

Some debt consultants advise students to immediately start saving while they pay back the minimum loan requirement until they have an emergency account equal to one year of total expenses, then start increasing student debt payments to something manageable.

Others recommend a full-throttle debt repayment strategy. Paying the maximum amount your budget allows and eliminating the debt sooner can create a positive long-term forecast for future investments such as a car or a house.

All situations are different, but a good starting point for any student needing debt help is to create an accurate budget. Math doesn’t lie, so being familiar with the precise terms of your loan helps navigate the financial waters with far more clarity.

One thing important to remember, especially for those who have other responsibilities such as credit card debt, is debt consolidation. An insolvency trustee with help you determine your debt-to-income ratio so you can approach your payments with a robust long-term strategy.

How Long Does It Take to Pay Off A Student Loan?

According to Statistics Canada, the average student loan debt is $26, 000.00, a hefty responsibility for anyone to manage. The average length of time it takes to pay back a student loan is 9 years.

Federal officials in Ottawa announced in 2016 that students would not have to begin paying back their loans until they earned at least $25, 000/year, a welcome relief to some but to others just another way of delaying their repayment process.

There are a few effective ways to approach repayment, but they differ depending on where you live. For example, if you need debt help in Ottawa, your cost of living is higher than if you were living in a small town where rent as twice as inexpensive.

Discipline regarding your spending habits, unexpected emergencies, or employment changes can also alter your scheduled payments. Applying for interest relief is always a good idea, but the process can sometimes take months. Still, applying for interest relief makes sense because if they decide in your favour they will refund you retroactively.

Another method of speeding up the repayment process is to use auto payments and paperless statements. You may also qualify for a slightly lower interest rate if you choose an option your bank finds more favourable.

Are You Experiencing the Following? If So, it’s Time To Rethink Your Savings Plans

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  • Credit card debt
  • Depletion of savings
  • Late/missed student loan payments
  • Paycheque-to-paycheque syndrome


If one or more of these situations are happening to you as you attempt to pay back your debt, it might be time to revamp your strategy for a viable savings plan. Visit a financial consultant through your bank and formulate a plan to pay back your loan while giving yourself as much security as possible.

Running The Numbers On Your Student Loans

A student loan is often an individual’s first experience calculating an important budget. There are various considerations, including how to disperse available funds so that living expenses and daunting interest rates do not impact minimum payments.

Student loan calculators are a common tool for doing the math when devising a workable budget. Several banks and financial help institutions have them available free on their website and can assist you in fashioning a budget that makes sense for your situation. Like our earlier example, if you need student debt help in Ottawa, it will help calculate the right kind of budget given your cost of living.

 How Do You Get Your Student Loans Forgiven?

In Ontario, the government has created twelve bursaries and grants available to students who have taken out student loans. You must still be in a student to take advantage of these programs.

Other provinces have what is called a Repayment Assistance Plan (RAP). RAPs can help reduce your interest rate and sometimes eliminate the remainder of your loan altogether, provided you have made consistent minimum payments in the past.

It is important to note that each individual student also has different circumstances. For example, you may qualify for forgiveness if you are a nurse or doctor and choose to work in a remote area.

It’s important to read the fine print of your student loan to see how you can take advantage of any type of payment reduction possibility.

Student loans are tough, but they don’t have to be life altering. Stay sharp and eventually, you will pay it off.

Good luck!