How I Graduated Debt-free

Editors note: I want to introduce you to MoneyWeHave.com’s newest contributor, Steven Van Sluytman. Steven has been quietly working behind the scenes with me on a few things so I’m excited to hear his stories on money. Steven is a 22-year-old Muskoka-raised student at the University of Ottawa who’s about to graduate with a degree in economics in December 2017. He enjoys all things finance and basketball.

I will be graduating debt-free from university in 5 months. While it seemed like a far-fetched goal, I felt motivated in my second year of university to make decisions that would give me a head start toward financial freedom.

The thought of graduating without debt really appealed to me. The thought of graduating with savings and investments also appealed to me but seemed to be an unrealistic goal. As I’ve learned, it doesn’t have to be. The thing is, I haven’t always been good at saving money. Everyday shopping didn’t get in my way – it was those big-ticket items that called to me. Out went my high school summer work savings to buy a stereo system costing $1,500 and of course a couple dozen 90s hip-hop records for my new turntable. I also had to get that new snowboard and three bikes: one for trails, one for jumps, and one for tricks.

It didn’t occur to me at the age of 18 that moving to a university 5 hours from home would mean leaving everything behind to collect dust and depreciate in my parents’ house for four years. If only I could go back and try to reason with my younger-self. Since that’s not possible, I’m going to share with you the top three strategies that I’ve been using while I’m at university:

Apply for scholarships and OSAP

The easiest thing I did to make money was applying for scholarships – hundreds of them. It’s true that some schools are more generous with scholarships than others, and some scholarships are more demanding to apply for than others, but most are worth applying for – one year I actually made more money from scholarships than I had to pay in tuition! What’s also great is that not all scholarships are based on academic standing; some are for creative ideas, essay submissions, financial need, community involvement, and random draws. To find scholarships like those that I applied for, try checking your university’s financial aid website. You can also find scholarships offered outside your school at yconic, Student Life Network, and Scholarships Canada.

If you’re a student in Ontario, you can apply for Ontario Student Assistance Program (OSAP). OSAP offers grants, loans, and funding for 30% off tuition, so it’s important to apply for it if you’re eligible. Depending on factors such as family income, you could have your tuition covered partly or in full by OSAP. One thing to note is that interest starts building on your loans after you graduate. Currently, you do get a 6-month interest-free grace period on the Ontario portion of your loan, but the federal portion of your loan accrues interest immediately after graduation at a rate of prime + 2.5%.

Work and co-op placements

If your program offers a co-op placement opportunity, go for it. Not only does it give you valuable experience in interviews and professional settings, but it can cover the tuition for your whole undergraduate degree. For example, my program offered 16 months of co-op experience in economics and statistics, and I made close to $44,000 from the 16 months of work, which more than covered my total tuition of around $35,000. To pay for living expenses, I continued working part-time at my co-op placements during study semesters.

If your program doesn’t offer co-op, or if you don’t want to extend the duration of your program by adding co-op placements, you could also consider being a teaching assistant, applying for your university’s work-study program, or working at a local retail store or restaurant. Any amount you receive from work to pay off or prevent taking debt will save you a lot in the future – those prime + 2.5% OSAP loans can cost a lot if held too long after graduation.

Track your Expenses

For a lot of people, one of the most boring parts of trying to save money is tracking expenses and keeping a budget. I’ve learned that I’m a person who likes the process of budgeting and tracking, but for those who don’t, it’s never been easier to stay on top of your finances with services like Mint and You Need a Budget to keep you organized. You could check them out to see if they could be of help to you. If you’re worried about security or privacy issues, you can always download a budget template from Microsoft Excel or customize your own.

Why would you want the hassle of tracking your daily expenses? It’s important to me because: (1) I can find unnecessary expenses that are easy to reduce or eliminate (like recurring expenses for services that aren’t being used); (2) I have an idea of how much I actually spend and if my income can sustainably cover my expenses; and (3) I can target areas of high spending and set goals to reduce them – my weakness is going to specialty coffee shops.

Final Word

University is expensive, and how much money you’ll need to pay for it will depend on many factors such as the school and program you pick. Sometimes graduating with debt is unavoidable, but the good news is that there are aspects that are within our control and if managed with care, the outcome could be more in our favour.

Here are a few extra money management strategies that are helping me while I’m in university:

  • I use money that’s gifted to me (from family for example) and all money from OSAP (grants, loans and 30% rebate) to put toward academic and living costs. My strategy is to use this money for school expenses such as textbooks, transportation, co-op fees and rent.
  • I don’t have a car while I’m in school. Using public transit, Greyhound, and VIA Rail gets me where I need to go.
  • I’ve been living with roommates while in school. I’ve saved hundreds of dollars each month compared to living alone.
  • I pay no banking fees because I’ve switched to online banks like Tangerine and EQ Bank. They also offer competitive interest rates and gave a good cash bonus for signing up.
By | 2017-07-26T21:23:00+00:00 July 13th, 2017|Personal Finance, Young Money|

2 Comments

  1. Ying-NavigatingAdulthood July 18, 2017 at 3:58 pm - Reply

    This is such a great post! I think a lot of people don’t realize how much money they can earn to offset their tuition by taking student worker positions. Plus, it’s a great resume booster too!

  2. […] while studying. Steven Van Sluytman, who’s about to graduate from the University of Ottawa, earned $44-thousand from his co-op placement—enough to pay his full tuition. He also worked part-time during semesters, and will graduate […]

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