How to Fund Your Education as a Newcomer Student in Canada – Arrive

Canada is home to some of the best schools and universities. Many students globally view studying in Canada as an opportunity to gain world-class education at an economical cost in comparison to countries like the United States, United Kingdom or Australia. Being part of a growing multicultural environment and the potential to apply for permanent residence upon completion of studies are also great reasons to come to Canada as an International Student. 

That said, one cannot ignore the fact that with tuition, living costs, and other fees, international education can be expensive. Therefore, having sufficient finances to support your overseas education is crucial. 

The good news is that international students requiring financial assistance have more than a few options to explore. In this article, we will dive into these options, help you better understand them, and outline some useful resources to get you started with your application for financial aid. 

First things first, estimate the cost of your education. Use Arrive’s Cost of Studying calculator to help you figure out how much money you’ll need to get through the school year. Additionally, you can also check the government of Canada website for the proof of financial support required as part of your student permit application. Once you have a fair idea of the amount, it will be easier to narrow down potential sources to finance your Canadian post-secondary education.

Financial assistance for international students in Canada

1. Student loans

In order to receive a study permit for Canada, applicants are required to show funds that cover the cost of education plus living expenses in Canada. Student loans are a type of loan specifically designed to help students pay for their post-secondary education, including tuition fees, books and supplies, and housing costs. Money borrowed as a student loan has to be repaid with interest, at some point in the future – often, after completion of studies. 

Student loans can either be acquired through the Canadian Student Financial Assistance Program (CSFAP) or a private bank. Here’s what you need to know about each option:

Bank student loans

Student loans can be provided by banks, including RBC. Unlike the Canadian Student Financial Assistance Program, bank loans are not restricted to recipients from middle- or low-income families. Student loans from banks must be repaid over a fixed period of time and sometimes require a cosigner to guarantee the loan. However, most Canadian banks only offer student loans to domestic students or students who are Canadian permanent residents or citizens.

Canadian Student Financial Assistance Program 

The Canadian Student Financial Assistance Program is a federal program that provides repayable loans and non-repayable grants to help Canadian students who are citizens, permanent residents, or a designated protected person pay for their post-secondary education. These loans are paid in partnership with provinces and territories and are available to both full- and part-time students from middle- or low-income families.

Learn the basics of finance in Canada and get essential resources and information you can rely on to make confident financial decisions, including funding your education, budgeting and managing your money, and paying taxes. Take charge of your finances by downloading the International Students Finance Guide now.

2. Scholarships or grants for international students

Scholarships or grants are forms of monetary support offered by institutions, organizations, governments, or individuals to help international students finance their education. 

A wide array of scholarships and grants are available to students in Canada. Scholarships and grants don’t have to be repaid and can either be one-time payments or recurring annual payments for the duration of your post-secondary education. 

Scholarships and grants are often tied to academic merit or accomplishments in sport, philanthropy, or the arts. Sometimes, certain requirements (such as a grade point average) must be met to renew the scholarship or grant each year. 

Scholarships and grants can come from several sources, including post-secondary institutions themselves, nonprofit foundations, community organizations, government bodies, and private companies. It’s important to research all of these options well in advance of your planned start date to find out which scholarships and grants you can apply for and have ample time to prepare your application. Two good resources for this information are studentawards.ca and scholarshipscanada.com. RBC also funds several scholarships for students in Canada.

Key highlights of scholarships or grants:

• Scholarships or grants are usually granted for outstanding academic or extracurricular achievements, volunteer experience, professional accomplishments, and may also be awarded by specific research areas, especially to graduate students.
• You don’t need to repay a scholarship or grant.
• Usually, you need to submit an application. But at times, based on certain criteria, it may be automatically offered to those who are eligible – this type of scholarship is known as an entrance scholarship. Many Canadian universities are known to offer entrance scholarships for international students, so be sure to check the website of the colleges you’re interested in.
• The application process for each scholarship or grant may be different. At times, you may be asked to submit an essay or reference from teachers/professors or employers. 

3. Bursaries for international students

Bursaries are a form of financial assistance offered by universities and colleges for international students in Canada. Bursaries are given to students based on financial need rather than merits or accomplishments. They’re normally one-time payments that don’t need to be repaid and are provided by nonprofit foundations or private companies. Again, it’s important to research bursaries well ahead of your start date to give yourself enough time to apply for them. 

Key highlights of bursaries:

• Students are usually required to submit an application, undergo a needs assessment, and provide information about their income or their parents’ income to verify their financial situation. 
• As with a scholarship or grant, you don’t need to repay a bursary.
• Information about bursaries is usually available on the individual school or university websites.
• Typically, you have to be registered as an international student in the school to apply for bursaries as the main intention of a bursary program is to supplement students’ primary sources of funding. 

4. Student lines of credit in Canada

A line of credit is a loan that allows you to borrow money repeatedly up until a pre-set limit. You can borrow money from a line of credit, pay some of it back, then borrow again if you wish. A student line of credit is specifically meant to help pay for post-secondary education expenses, including tuition, books and supplies, and living expenses. With a line of credit, you only pay interest on the money that you actually borrow. 

Student lines of credit can be a good option for students who require financial flexibility, but are unsure if they’ll necessarily need a large loan. This way, you don’t find yourself paying interest on a large loan you don’t fully use. 

Student lines of credit are provided by financial institutions and banks like RBC. However, most banks only offer student lines of credit to domestic students or to students enrolled in certain professional programs. You may need a cosigner to guarantee your line of credit and you’ll most likely need to provide proof that you’re either a full- or part-time student at a recognized post-secondary institution.

Key highlights of student lines of credit:

• You only have to pay back the money you borrow. Interest is applied to just the amount that is borrowed and not on the entire amount (which is the case for loans). For instance, if you have a $10,000 CAD line of credit and you borrow $3,000 CAD, you have to repay $3,000 CAD + interest on the $3000 CAD, not on $10,000 CAD. 
• The interest rates may be lower than the rates offered on government student loans. However, you’ll have to start paying interest as soon as you borrow money from a student line of credit, unlike a student loan where you only start paying interest once you finish your program or leave school.
• You can start paying back the money you owe at any time, even while you’re still studying.
• The limit for your line of credit will be determined by the bank, based on your course, the school or academic institution offering the program, living expenses, credit history, and ability to repay the money you borrow.

For more information on student lines of credit, see information shared by the Financial Consumer Agency of Canada.

Book an appointment with an RBC Advisor or call 1-866-881-6618 to speak with a credit specialist to learn more about a student line of credit. RBC’s phone services are available in up to 200 languages. Once you have your appointment booked, an advisor will reach out to check whether you’d like to meet via phone, video or in-branch.

5. Financial aid from individual educational institutions in Canada

Many Canadian universities and colleges have separate financial aid options for international students that are offered directly through their websites. You can explore the details on individual websites or contact the institution for more information on available options and the application process.

6. Government student aid

Federal and provincial governments provide various forms of financial aid to students who study in Canada. These include scholarships, loans, and grants that can be based on financial need, special skills, special status, academic merit, and other qualifications. 

7. Working while studying in Canada

Another way to cover some of the costs of your education in Canada is to work while studying. If you take this route, you won’t have to worry about repaying loans later down the road or paying interest fees. However, newcomers need to make sure they’re legally eligible to work on- or off-campus before they apply for a job. 

Tips to help you make and stick to a budget

No matter which method you choose to pay for your education in Canada, you’ll need to learn to make and stick to a budget. Here’s how to make a student budget:

• Calculate your net income to know how much money you’re working with. This should include any financial aid you’re receiving. 
• List your monthly expenses.
• Organize your expenses into fixed and variable categories or, to make it simpler, needs versus wants. 
• Determine the average monthly cost of each expense.
• Add up these costs and compare them with your net income to see if you can make ends meet.
• If your expenses cost more than your net income, you need to make adjustments or find a way to earn more net income. If your income exceeds your spending, be sure to set some savings aside for the future.

To stick to a budget, you should keep track of your receipts and expenses. Set a weekly or monthly time to compare your actual costs with your planned expenses. If there’s a mismatch, it’s important to readjust your budget to reflect reality. 

There are many financial resources you can leverage to put your educational and career goals within reach. Speak with a financial advisor to understand which options are best suited to your situation: book a phone appointment with an RBC Advisor to discuss your options.