How to fund your studies in Canada: Loans, grants and scholarships
One of the most common obstacles international students face when they think about studying abroad is cost. Canada tends to be a more affordable option for study abroad than the U.S., but it can still feel like a financially daunting decision. The good news is, many options exist to help international students fund their academic programs and achieve their dreams abroad. In this article, we’ll explore the differences between student loans, grants and scholarships in Canada so you can decide which options are best for your needs.
Student loans
Student loans allow students to borrow money to cover tuition and other expenses while in school. With loans, you’re borrowing the money you need to pay for your education – which means you’ll need to pay it back, with interest, after you graduate. Still, student loans are one of the most popular ways to fund a study abroad program because of the flexibility they provide.
As with any funding option, you’ll want to do your research before you start applying for student loans. Here are some key terms to know:
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- Fixed versus variable interest rate: Fixed interest rates stay the same over the term of your loan, enabling predictable and consistent monthly payments. Variable interest rates fluctuate with the market and may change substantially over the term of your loan.
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- Cosigner: A cosigner is a person who agrees to pay your loan balance in case you’re unable to pay. Cosigners can help your chances of being approved for a loan, but many international students may not have access to a cosigner who’s willing to pay the amount of your loan.
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- Collateral: Collateral is an asset you own, like a house or car. When applying for a loan, some lenders may require you to list collateral. Your collateral could be seized by the lender if you fail to pay back your loan.
At MPOWER Financing, we help international students fund their education with loans designed for your unique needs. We never require a cosigner or collateral, and our loans always have fixed interest rates. Learn more about our student loans.
One more quick tip: Paying back your student loans is even easier when you have a Canadian bank account. Check out TD Bank’s offers for international students.*
Grants
Now, let’s talk about grants. You might sometimes hear the words “grant” and “scholarship” used interchangeably. But there’s one key difference you need to know: grants are awarded to students based on financial need, whereas scholarships are awarded based on merit or some other identifying criteria. Unlike a loan, you won’t have to pay back a grant or scholarship, though you may be required to meet and maintain certain academic performance criteria.
The Canadian government makes some financial aid grants available to international students, though the options are limited compared to what’s available for Canadian citizens. Still, it’s worth checking for eligibility before ruling out this option.
Scholarships
And lastly, let’s discuss scholarships – another of the most popular methods of financing. As we mentioned above, scholarships don’t need to be repaid and are awarded based on any number of characteristics. Some examples include academic achievement, extracurricular involvement, leadership in your community, national identity, degree program and more.
There are many scholarship options available, even for international students, so the chances are high you’ll be able to find some matching your background. But don’t count on scholarships to fund your education! Because they don’t need to be repaid, scholarships can be extremely competitive to secure.
Not sure where to start when looking for a scholarship? Check out MPOWER scholarships for international students and see if you’re eligible.
Finding the right funding for you
Now that you know the differences between loans, grants and scholarships for international students in Canada, you’re ready to start your search for funding. Remember you don’t have to rely on only one funding option. You can apply for and use a combination of student loans, grants and scholarships to fund your studies.
*MPOWER has referral agreements with TD Bank and may earn referral fees from this relationship.
