Photo by Kyle West

On Jan 17, the provincial government announced plans to change the Ontario Student Assistance Program and cut tuition by 10 per cent.

The OSAP changes include requiring students to take out a loan when receiving an Ontario Student Grant, lowering the threshold to receive financial assistance, and eliminating the six-month interest-free period after graduation.

On Jan. 31, more than 75 student associations across Canada released an open letter demanding the government reverse the changes to OSAP.

Since the announcement, multiple protests have been held across the province, including in Hamilton.

Students at McMaster are also being affected by the changes, with more than 17,000 full-time students having applied for OSAP.

Many students are concerned about the shift in financial assistance towards loans instead of non-repayable grants.

First-year social sciences student Bryce Lawrence does not get money from her parents for tuition and says she would not be able to go to school without receiving grants and loans through OSAP.

This past year, Lawrence qualified to receive a higher proportion of grants compared to loans. Going forward, she will receive more money in loans and less in grants.

“The 10 per cent tuition decrease is nothing compared to the amount that we are not going to be getting anymore and it is going to be harder for a lot of students,” Lawrence said.

During the school year, Lawrence works three days a week, with the money going directly to basic expenses like groceries, gas and her phone bill.

“I worked hard in high school to get here and I need that money to get myself through it so that in the future I can get myself a good career that will help support a family,” Lawrence said.

Looking forward to next year, Lawrence says the money she gets from OSAP probably will not be enough to cover additional costs on top of tuition.

“It’s just frustrating,” She added. “It is going be weird not having the amount of money I need. Literally nothing is free in school. It is so expensive, and once the money goes into my tuition, I will not have enough to pay for my textbooks and stuff.”

Second-year political science student Zack Anderson said the elimination of the six-month interest-free period is especially harmful.

“It is already stressful enough once I do graduate to try and find a stable income, but I always kind of knew that that six-month cushion was going to be there for me and now that rug’s been pulled out from under me,” he said.

Anderson has relied heavily on OSAP. However, even with OSAP, Anderson still struggles to cover school and living costs beyond just tuition.

This year, he was forced to take a reduced course load and work three jobs to pay for tuition and living costs.

Over the summer, Anderson was working 70-hour weeks to save up for school.

“I have had to take out loans off the bank, I have maxed out credit cards before, done all these kinds of things to try to survive and you take it day by day, week by week,” Anderson said.

While there have yet to be any announcements since Jan. 17, the Ford government’s plans are expected to be in place for the 2019-2020 academic year.

 

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Photo by Kyle West

By: Daanish Kachalia

 

Warren Buffet is the third richest person in the world, yet he never spends more than $3.17 on breakfast, drives a $35,000 car and lives in a house priced lower than the average Toronto home.

With debt at an all-time high within millennials, many students need to manage their money more effectively. According to a Northwestern Mutual 2018 Planning and Progress study, millennials hold an average debt of $36,000. According to the same study, paying debt off is not listed as a top priority for millennials. When it comes to managing your money as a student, saving it is essential.

One may question, why can’t debts be paid off later? The simple answer to that is to secure an earlier financially-stable future. The most obvious factor to consider is interest rates, as they can add up to hundreds of thousands of dollars over time and can be detrimental to a debt-free future.

There would undoubtedly be times when you cannot refrain from spending, like eating out with friends, partying or buying school supplies, but there are ways where your savings can be optimized by some simple tips that you can apply starting today. These tips, which are by no means exhaustive, are created by a student, with students in mind!

 

Buy in bulk

If you are living away from home, buying groceries or personal hygiene items can be quite expensive. It is important to note items that are on sale and to buy them in large quantities, especially if it is a necessity. For example, if toilet paper is on sale for $1.50 off, buying the supply for the rest of the school year will result in an immediate return on your money.

 

Place your money in the right place

Making your money sit in a chequing account is possibly the worst action one can take as it is essentially not growing.  Instead, your Registered Education Savings Plans, grants and savings should be placed in a high-interest savings account.  By doing this, your money will accumulate over time via interest and you will make riskless return that you would not make otherwise.

 

Be a smart partier

Partying is one of those activities where you don’t mind spending money after a stressful week. Although there are certain costs you cannot avoid, there are also many where you can immediately save. Taking the bus being one of them. Why take an Uber or taxi when you can get around the city for free or significantly less? Of course, it would not be as comfortable or efficient, but as students just trying to get by, this method is substantial for a healthy bank account.

 

Pack your own food

This tip may be the most obvious of the bunch, yet many students somehow spend hundreds of dollars throughout the school year on food which is very much an avoidable expense. The best solution would be to meal prep. If you know that you will have a busy schedule in the coming weeks, you should prepare your food ahead of time so you have it available when needed.

 

Track your expenses

Sometimes, many of us unconsciously spend without even realizing it. Knowing where your money goes and taking corrective action can potentially result in a surplus of money by the end of the school year. Today, almost every retail bank offers free analytics on your spending through online and mobile apps. These analytics offer insights such as the months you spend the most on, categories you spend on and spending behaviours. With tracking your expenses, you can possibly realize your unnecessary costs and take the corrective action to reduce spending.

 

There is no doubt that saving your money effectively can result in less debts and a more financially stable future. When it comes to managing your money as a student, saving it is the key ingredient. Warren Buffet should serve a role model for us all, as he has a net worth of $84 billion USD yet lives a more conservative lifestyle than most of us do as students.

 

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Photo by Kyle West

Disclaimer: This piece was written prior to the changes made on Jan. 17 by the Ford provincial government regarding tuition for postsecondary education. Changes to the Ontario Student Assistance Program include increasing the length of time students must have graduated high school to qualify as an independent student from four to six years, removal of the grace period for repayment of loans upon graduation, and removal of many grants for lower-income students. Read the provincial government's statement here: https://news.ontario.ca/maesd/en/2019/01/affordability-of-postsecondary-education-in-ontario.html


 

The Ontario Student Assistance Program, a financial aid program offered through the provincial government, has helped many Ontario students get through university. OSAP offers funding through grants and student loans, and can be used to help offset the cost of tuition and school-related expenses.

Almost all Ontario residents may apply for OSAP but the amount of aid offered to each individual is dependent on the individual’s education expenses, course load, and personal financial situation. This last factor essentially boils down to your family’s income. If your family makes enough money deemed by the government to sufficiently cover educational expenses, then this renders you ineligible to collect OSAP.

While this appears to favour students from low-income households, as it should, it neglects the possibility of students from high-income households where parents do not or cannot pay for tuition. There are many reasons why this occurs ranging from the parents’ genuine inability to allocate funds for their children’s education to refusing on the grounds of principle. Though these students truly demonstrate financial need, their concerns often go unrecognized.

As these students are not able to collect OSAP, they typically have to work several part-time jobs to pay for tuition, or try their luck at applying for private loans that do not carry the benefits of student loans like interest relief during schooling and grace periods after graduation.

As of now, the only way to receive OSAP if you are from a high-income family is to be considered an independent student with an income below what the government deems as excessive or to declare a family breakdown. To be considered an independent student, one must meet several criteria. For example, both your parents must be deceased, you’ve worked full-time for at least 24 months in a row, or you’ve been out of high school for four or more years.

These provisions show the assumption of the provincial government that parents will support their children for four years of postsecondary education. This often false assumption also has no rational grounds; why the decision for a seemingly arbitrary four years? What occurs only after four years from high school that makes someone financially independent?

The alternative, to declare a family breakdown, is also insufficient. To declare a family breakdown renders you an independent student but you must show proof of estrangement from your parents “due to documented mental, physical, sexual, and/or emotional abuse or drug or alcohol addiction in your family”. This provision is too narrowed and does not reflect the many other reasons that parents may be unwilling or unable to support their children’s postsecondary education expenses. Your parents could very well be supporting you, just not financially.

Rather than requiring students to jump through hoops to receive aid, there should be an honour system for students applying for OSAP. If students claim that they are financially independent from their parents, they should be believed at face-value. Perhaps the stipulation can be a restriction for these applicants to receive student loans only, so that grants can be reserved for students from lower-income families.  

There will undoubtedly be individuals that misuse such an honour system. But is the potential for misuse strong enough cause to warrant not supporting individuals who could legitimately benefit from such an option? That’s subject to debate.  

 

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