Buying a property to qualify for OSAP

[Guest Steve U of T]

Right now, I have enough savings that I don't qualify for any government student loans. If I were to take all my money and invest it in a down payment for a condo (which would be my principal residence), this would exclude those assets from OSAP calculations, correct? Has anybody else done this or looked into it?

[Guest satsumargirl]

Ha!ha! The headaches OSAP have been giving me is unbelievable! What with being the only people on the planet that consider a leased car an asset instead of a liability!

 

I am slowly just telling myself who cares....the loan amount I will get from them will be small in the long run and my summer is flying by quickly, I don't want to spend it nit picking at finances!

 

I do not know how long you have been out of school, but you are allowed 2K of RRSP contributions for each year since you've been out of high school that will not count against you for OSAP. So if you've been out for say 5 years then you could have 10k in RRSPs that won't affect your application.

So that might help you.

 

You are right that OSAP cannot count your primary residence against you. But it may be more hassle than it's worth. There are lawyers fees, property taxes, maintenance, condo fees if you live in a condo etc... Also, the market for condos varies and depending on the market you may have a hard time selling it....then there is the pain, hassles and all the fees that go along with selling the place (when you probably would rather be spending your time relaxing before you move and start residency). Anyway, if you sit down and add up the property taxes/house insurance etc... that you would pay over the 4 years (that you wouldn't pay if you were renting) and compare with the extra amount of interest you would pay on anything extra you would take out on a line of credit since you didn't qualify for OSAP it might not work out to be worth it.

 

Good luck!

Sats

[Guest Steve U of T]

Well I'm much more interested in the bursaries I'd be eligible for while on OSAP than the student loan itself. I considered an RRSP, but it won't make a difference. In any case, interest rates are relatively low these days, and I suspect that mortgage interest + condo fees + property taxes + other miscellaneous expenses will actually work out less than the rent I'd otherwise be paying. The rest of the money I'm putting into my mortgage goes into my equity in the condo, so when I sell, I can hopefully pay off a decent chunk of my LOC.

[Guest KJ]

I was just wondering if it is even possible for them (OSAP) to check ALL your 'other assets.' I mean people may have car, house, investments here and there, even some that they might not even know about? Just wondering...

[Guest satsumargirl]

Yep they check it.

 

You give them your driver's liscence and so they check for cars registered with the ministry of transportation....they will even tell you what your car is worth (so I don't know why they bother asking you).

 

They check your incom tax return and if things don't add up according to them, you get reassessed....I have been reassesed and it is the biggest pain in the butt. They break down their year in a way that employers don't. And if you get a scholarship you need to break that down too if you got it in chunks etc. And if any of your income was research grant and you could deduct expenses, well that's a mess too. You don't want to be reassessed! Anyway, it took me days to get all the forms completed and my school several hours to break down my income how they wanted....with the end result that everything was fine. I wish I could have billed them my time!

 

Anyway, those are the biggies, income tax returns and ministry of transportation. I imagine it would be pretty easy to find any registered savings. And they have most if not all of your bank info, so even non-registered ones would be easy too. But I don't know how much they really look into that.

 

IF you are ever caught lying though, you will be cut-off from OSAP for life. So I wouldn't risk not reporting anything major.

[Guest KJ]

Thanks satsumargirl

 

I'm just worried that I forgot something and they'll deny me OSAP. I just looked at how my income tax was filed and figured out my income, interest from savings, etc and submitted those figures to OSAP. What is the maximum and minimum amount a med student might receive from OSAP?

[Guest blinknoodle]

This year, the OSAP maximum is $14k. (Last year I think it was $11k).

The minimum would obviously be $0.

[Guest UWOMED2005]

Truth is, some people in my class left their possessions (car, house) in their parents' name to circumvent OSAP and bursaries. It is possible.

 

This raised mix feelings among some classmates who needed honestly needed bursary money to get by. . . don't forget the bursary money comes from a set pool, so if more people qualify there's less to go around. . .

 

At the extreme, one person bragged about signing up for a LOC, maxing it out by transferring the money to his parents' account as well as putting all possessions in his parents name. This was a student who was getting close to full support from his parents and probably didn't need any OSAP. . . at one point he was noted bragging about how he used his bursary to buy a TV.

 

There's an unconfirmed rumour someone ratted him out to financial services. If this is true, I don't know what the consequences were.

[Guest Steve U of T]

I understand people's concerns about their classmates hiding assets in order to obtain government benefits they don't need. The majority of my savings are actually in my father's name at the moment, so I could have applied for OSAP without declaring them. However, I wouldn't feel right about that, so I'm trying to use a legitimate means to exclude my assets from OSAP calculations. My family does not have a high income and won't be providing much support, so I don't see why I should be punished for saving since I was a kid, rather than blowing thousands of dollars on travel and other things like many people do before claiming OSAP. I didn't apply for the Schulich award, because I don't feel I deserve it, but I will be forced to borrow a very large sum of money to attend medical school, so I believe I do deserve some government support. I'm now realizing that buying a condo won't make much of a difference in terms of OSAP - I either put a down payment on the condo and have no assets in the eyes of OSAP, but still don't get it until 2nd year because of my employment income this year, or I don't buy the condo, spend all my savings on rent and tuition, and get OSAP in 2nd year after I run out of money. Still, I think the first option will put me in a better financial situation after I graduate.

[Guest satsumargirl]

but still don't get it until 2nd year because of my employment income this year,

 

Hey Steve U of T

 

Have you met with a financial aid counsellor? If not I would recommend it. It was helpful for me.

 

I also have been working..and so have 2 years of pension accumulated etc... But by no means do I have enough saved for med school!!! My leased car is considered an asset :rolleyes even though I have no way of getting rid of it without actually oweing money to the dealership and then having no car anyway in the end. And like you, I am most interested in the bursaries than the OSAP in particular at least for the first year. I am going to Ottawa and after 1st year the bursaries are not that substantial ($800 vs $3500). I mean I'd like to not have to pay interest on my LOC starting from first year, but if I have to then I guess I have to. And I'll be broke for the next 3 years so not worried about OSAP then, I'll get it all for sure!

 

But in terms of your income...it is only your income from May 16/17th? Til you start school (your pre-study period) that gets included in the OSAP calculation.

 

According the the counsellor I saw, the Provincial calculation only allows a max of $2400 tuition/semester when calculating your need. So with a decent prestudy income you would not qualify for the provincial part (40% of the OSAP max). But the fedreal portion (remaining 60%) does take into consideration your actual tuition etc. so your need will be high considering our high tuition and you will likely qualify for the federal portion. And at Ottawa, at least for the bursaries, all you need to do is qualify for say $100 and you'll get the bursary. Everyone who qualifies for OSAP will get it...so there should be no hard feelings on anyone's part. (I dont' know if bursaries are different where you are attending)

 

If you earned a pension, and keep it there or it's transfered to you in a locked retirement plan then this is not counted in OSAP because there is absolutely no way of accessing these funds until you are 55 years old.

 

If your savings are not in your name, it doesn't make sense to me to include it on your application. They might wonder when they go to verify why they can't find those savings!?

 

So maybe looking at just your prestudy period income, you will qualify for some OSAP.

[Guest Steve U of T]

I'll definitely be meeting with a financial aid counselor, but probably not until orientation. Perhaps I can qualify for some funding this year after I buy the condo, we'll see. With regards to reporting the savings that aren't technically in my name, they're in several 'in trust' accounts under my father's name, but the capital gains earned on those investments have been reported on my income tax returns in the past, so they could be traced to me. Either way, it's my money, and I want to be applying for OSAP with everything out in the open. I don't want to receive a bursary that somebody else might need more. If I don't get anything, I can survive with my LOC, but I would like to receive whatever I'm entitled to from the government.