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Debt Advice: How to Deal With Student Loan Debt

Ontario students have been seeking advice to deal with mounting student loan debt and rising tuition rates. Post-secondary students can expect to leave school with a lot of debt — the current national average is $26,819 — and it’s causing them a lot of stress. Even those students eligible for free university tuition will likely still incur debt loans for housing, transportation and/or food costs while in school. Toronto’s York University plan to address these issues by introducing a financial literacy program for students —a necessity for this age group when debt is the norm. Students need to be aware of all tools available to them, including the wealth of financial apps that can help them stay afloat.

How to maximize your debt repayment

A 2012 MasterCard study found that when first introduced to “tap and go” credit cards, consumers spent up to 30 per cent more than before. For students, the urge to spend can be very strong. Many businesses market to tech-savvy millennials who crave the latest tech and media, but these kind of purchases can add to financial difficulties. Here are five ways to focus on debt management and keep afloat while in school:

  1. Try to live below your means. This may seem self-explanatory, but doing it can be tricky. If you receive $20,000 from OSAP and your tuition fees are $8,000, making that $12,000 stretch isn’t always easy. Apps like Flipp can help you make that money stretch by retrieving the best deals in your area, based on your needs. Simply search for a specific product and find the best price.
  2. Use an app to help pay down debt. Free finance apps such as Mint or Wally can help you set goals and decrease your debt. The Debt Free app specifically helps you tackle debt using the debt snowball method.
  3. Save, save, save! Whether you’re still in school or recently graduated, take the opportunity to bank as much money as possible. Even while paying down debt, saving is essential. Manulife’s Goalkeeper app can assist your savings goals by allowing you to track your personal goals within the app. Track your progress as you grow your savings and focus on both short- and long-term goals simultaneously. You can also save when you shop by using the Checkout 51 app which allows you to upload a picture of your grocery receipts to get cash-back and coupons.
  4. Go digital with your budget. For students, the Financial Consumer Agency of Canada offers a detailed budget outline to get you started and outline your monthly costs. From there, apps like Mint and Wally can keep you on track when you’re on the go. They can also remind you when bills are due so you don’t end up with late fees or interest charges.
  5. Seek help when necessary. If you’re feeling stressed and over-burdened with debt, it may be a sign that you need help. For students, your campus financial office can offer resources and possibly financial literacy help. If debt management is real problem, it’s best to contact a debt professional who can offer suggestions to quickly and efficiently pay down debt. A Licensed Insolvency Trustee can talk to you about a range of solutions, including budgeting advice, debt consolidation, credit counselling, consumer proposal and bankruptcy assistance.

Could you use some student loan debt advice? Are you looking to begin paying down debt more efficiently? Join the conversation by searching the Twitter hashtags #LetsTalkDebt #BDODebtRelief

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