OSAP + Car

[itimebomb2]

So my wife is a med student and I'm a resident.

My in-laws bought us a car for our wedding (new car worth ~35k), and we put the ownership under me and my wife's names. Now we made the possible mistake of "claiming" that car under our assets in our OSAP application and that caused her to get almost no OSAP this year.

 

I was wondering -- could we simply remove the car from our assets, telling them that it is a mistake? Do they have any ability to check our vehicle ownership (and for that matter, the value of the vehicle)? We are riddled in debt... they expect us to sell the car in order to be eligible for OSAP, which I find rather unattractive.

[Hockeynut]

So my wife is a med student and I'm a resident.

My in-laws bought us a car for our wedding (new car worth ~35k), and we put the ownership under me and my wife's names. Now we made the possible mistake of "claiming" that car under our assets in our OSAP application and that caused her to get almost no OSAP this year.

 

I was wondering -- could we simply remove the car from our assets, telling them that it is a mistake? Do they have any ability to check our vehicle ownership (and for that matter, the value of the vehicle)? We are riddled in debt... they expect us to sell the car in order to be eligible for OSAP, which I find rather unattractive.

 

no offence but in all honesty it is capital under your name, why should taxpayers further fund your education when you have an accessible route to funds?

 

I highly doubt they would accept a change, your assumed to check over your insertions before submitting.

[schmitty]

They will not let you change this and they shoudn't...and they CAN check.

 

I have a car as well as it also causes me to get almost no OSAP (not even worth getting really), but that's life.

[A-Stark]

I was wondering -- could we simply remove the car from our assets, telling them that it is a mistake? Do they have any ability to check our vehicle ownership (and for that matter, the value of the vehicle)? We are riddled in debt... they expect us to sell the car in order to be eligible for OSAP, which I find rather unattractive.

 

It wasn't a mistake. You're asking whether you can lie to OSAP. I bought my car - which wouldn't have been anywhere close to $35k even new - with my LOC, which I suppose means that my net debt is slightly lower than my gross debt.

 

I fail to understand why you think being "riddled" with debt is unusual or exceptional. Most of us don't get new cars as presents, let alone $35,000 cars. Is there some reason your wife cannot rely on her LOC in lieu of subsidized government student loans?

 

Maybe you should sell the car and live more within your means?

[medigeek]

It wasn't a mistake. You're asking whether you can lie to OSAP. I bought my car - which wouldn't have been anywhere close to $35k even new - with my LOC, which I suppose means that my net debt is slightly lower than my gross debt.

 

I fail to understand why you think being "riddled" with debt is unusual or exceptional. Most of us don't get new cars as presents, let alone $35,000 cars. Is there some reason your wife cannot rely on her LOC in lieu of subsidized government student loans?

 

Maybe you should sell the car and live more within your means?

 

If something is a gift, it doesn't really come off as "living beyond your means."

Maintenance would be lower if anything (assuming this isn't a BMW/audi/merc...) with a newer car, while the car most certainly will have good gas consumption.

 

Being expected to sell a gift is indeed quite ridiculous.

[schmitty]

If something is a gift, it doesn't really come off as "living beyond your means."

Maintenance would be lower if anything (assuming this isn't a BMW/audi/merc...) with a newer car, while the car most certainly will have good gas consumption.

 

Being expected to sell a gift is indeed quite ridiculous.

 

That's not how it works. I could have rich parents that gifted me a condo, car, , etc and then turn around and get pissed at OSAP for expecting me to sell them (though they don't care about your first residence). That person that bought them the car could have bought them a reasonable $10K used car, and given them $25,000 for tuition and school costs.

 

Also, cars are very expensive to keep. Insurance for a new car like that is expensive, parking (depending on where), maintenance, etc. That money could be used to pay for school costs. This is a LUXURY, not a necessity and OSAP rightly penalizes for this. They would penalize less for a cheaper car like mine which is worth around $8K now (Honda fit).

[RunningGuns]

I have to partially agree with medigeek; I bought a new SUV outright last year (~45k), and it's quite easy to "take care of." I'd estimate that it costs me ~6k/year for fuel, parking, insurance, and routine maitinance (detailing, oil changes, etc). However, I had two new trucks before that and they were fairly expensive to maintain, ~6k/year in fuel alone. So, I'd say it moreso depends on what kind of vehicle the OP has at his disposal, rather then the initial cost..

[schmitty]

I have to partially agree with medigeek; I bought a new SUV outright last year (~45k), and it's quite easy to "take care of." I'd estimate that it costs me ~6k/year for fuel, parking, insurance, and routine maitinance (detailing, oil changes, etc). However, I had two new trucks before that and they were fairly expensive to maintain, ~6k/year in fuel alone. So, I'd say it moreso depends on what kind of vehicle the OP has at his disposal, rather then the initial cost..

 

Not sure what your point is? As a taxpayer, I would not like to have my money going to subsidize somebody who has a (unnecessarily) expensive vehicle, plus the associated high costs that go along with that.

[Hockeynut]

Not sure what your point is? As a taxpayer, I would not like to have my money going to subsidize somebody who has a (unnecessarily) expensive vehicle, plus the associated high costs that go along with that.

 

+1 you hit some good points in your comments above as well.

[RunningGuns]

Not sure what your point is?

 

My point was that a new vehicle CAN potentially be cheaper then a used vehicle long term. Especially if you used that vehicle all of the time..

 

As a taxpayer, I would not like to have my money going to subsidize somebody who has a (unnecessarily) expensive vehicle, plus the associated high costs that go along with that.

 

As much as I enjoy people throwing around the phrase, "I'm a taxpayer, therefore." I feel obligated to point out the fact that unless your taxes exceeded the amount the Canadian government pays towards your medical education. It'd be fair to say that your taxes don't benefit anyone but yourself. Furthermore, the amount of services you probably take advantage of everyday in addition to your education, make it likely that you will never pay enough taxes to cover what YOU use daily, none the less what anyone else uses.

 

Just my opinion.

[Hockeynut]

My point was that a new vehicle CAN potentially be cheaper then a used vehicle long term. Especially if you used that vehicle all of the time..

 

 

 

As much as I enjoy people throwing around the phrase, "I'm a tax payer, therefore." I feel obligated to point out the fact that unless your taxes exceeded the amount the Canadian government pays towards your medical education, it'd be fair to say that your taxes don't benefit anyone but yourself. Furthermore, the amount of services you probably take advantage of everyday in addition to your education, make it likely that you will never pay enough taxes to cover what YOU use daily, none the less what anyone else uses.

 

Just my opinion.

But he is speaking altruistically, no?

[sprinkles]

Would you be able to 'give it back' to your parents? And then use it?

 

Like Have the car be in *their* name but you use the car (as they had intended).

 

Would that not solve all your problems or am I missing something?

[future_doc]

For sure, it should have been organized that way from the beginning.

[BoyInTheBubble]

So my wife is a med student and I'm a resident.

My in-laws bought us a car for our wedding (new car worth ~35k), and we put the ownership under me and my wife's names. Now we made the possible mistake of "claiming" that car under our assets in our OSAP application and that caused her to get almost no OSAP this year.

 

I was wondering -- could we simply remove the car from our assets, telling them that it is a mistake? Do they have any ability to check our vehicle ownership (and for that matter, the value of the vehicle)? We are riddled in debt... they expect us to sell the car in order to be eligible for OSAP, which I find rather unattractive.

 

 

Combined you two have access to $550 000 (FIVE HUNDRED AND FIFTY THOUSAND DOLLARS!) on credit at dirt cheap rates that the general public can't access. In addition, you have parents that put up 35 000 for a car. On top of that, you have (nearly) guaranteed future income, even in the "low paying" specialties you'll both pull in 150000.

 

What do you need OSAP for?

[A-Stark]

If something is a gift, it doesn't really come off as "living beyond your means."

Maintenance would be lower if anything (assuming this isn't a BMW/audi/merc...) with a newer car, while the car most certainly will have good gas consumption.

 

Being expected to sell a gift is indeed quite ridiculous.

 

I bought a "pre-owned" car from the dealer with a warranty, which saved about $4000-5000 in various maintenance costs while the warranty lasted. It's not as if this isn't available as an option.

 

As for selling said gift, the point is that it amounts to somewhat less than $35,000, probably exceeding what OSAP would provide to an individual medical student in a single year by several thousand dollars. Why should someone with such assets have access to government-subsidized student loans?

 

This is a matter of equity. Subsidized student loans provide more ready access to credit for people in need* of funds to finance educational fees and living expenses during a degree. Of course, med students have access to exceedingly (one might say overly) generous bank lines-of-credit at the most favourable interest rate possible, i.e. prime. While they are not interest free like government loans are during the educational period, they represent very cheap credit. In contrast, after the degree, federal loans are prime + 2.5 and (at least in NS) provincial are prime + 0.5. That's not bad, and suffice it to say that the LOC represents very cheap borrowing costs.

 

(*Here we allow for med students whose annual education costs are double or triple those of most undergrads.)

 

Now if the OP is so maxed out that he (and his wife) cannot even manage to finance their costs and consumption via these favourable LOCs, then why should OSAP provide subsidized interest-free loans when he has a significant asset?

[Satsuma]

Wow, I can't believe how much judgement has gone on for such a simple question. I bet next time the OP is just going to ask the OSAP office!

 

It is too late to transfer ownership. It would have had to have been done before a deadline (?May or June?). I wouldn't stress over it though, the extra amount on the LOC will be a drop in the bucket and it'll easily be paid off once you are both staff.

 

OSAP also doesn't allow even true mistakes. My sister misunderstood the form and listed an amount from her summer income and then listed an amount for her savings. Her savings consisted of her summer earnings. So her $ was being double counted. They wouldn't let her change it. It was a pretty tough year since, literally, all we had to live on while in school was OSAP and whatever we could make working.

[rmorelan]

If something is a gift, it doesn't really come off as "living beyond your means."

Maintenance would be lower if anything (assuming this isn't a BMW/audi/merc...) with a newer car, while the car most certainly will have good gas consumption.

 

Being expected to sell a gift is indeed quite ridiculous.

 

yeah this is an annoying part of OSAP. It is important to remember I think that government considers osap a form of social assistance in effect. It is structured very similarly to odsp or welfare - assets are counted against you except those in very particular areas, and debit doesn't. The grants in particular are very much so income dependent.

 

If you were on any of those other forms of government assistance and got a gift then yeah you would be expected to sell it to pay for yourself. That just is how the system works.

[Satsuma]

Of course, med students have access to exceedingly (one might say overly) generous bank lines-of-credit at the most favourable interest rate possible, i.e. prime. While they are not interest free like government loans are during the educational period, they represent very cheap credit. In contrast, after the degree, federal loans are prime + 2.5 and (at least in NS) provincial are prime + 0.5. That's not bad, and suffice it to say that the LOC represents very cheap borrowing costs.

 

 

 

lol. I don't know that I would use any words relating to "generous" with banks. They aren't really doing medical students a favour. They make alot of money from those LOCs. And then you are also likely to stick with them for your nicely sized mortgage that will likely be in proportion to your significant income, and you will also likely make other significant investments and purchase your insurance coverage with them etc. Banks will always only be looking out for their own interests. They know that when you're done you'll be earning in the top 5%, and they want to keep you as a client.

 

It is highly unlikely that someone entering medical school is going to default on their LOC. Banks recognize these types of loans as being low risk and that is why you get a good rate.

 

There is a high number of students who default on their government student loans. These loans are actually rather high risk. And that is why the interest is more.

 

But regardless of the bank's motivation, it is nice to be able to borrow money at a low interest rate for medical school, since government student loans are not sufficient to even cover tuition in most cases, let alone living expenses. And thankfully they don't need a cosigner either! (cause let's face it, we all don't have reliable people in our lives who can cosign things like that)

[future_doc]

It is a reality of life that often there are unintended consequences of actions in which we participate. For sure, we will all have tax accountants who are experienced in dealing with physicians so that our financial decisions will be tax efficient, thereby minimizing our tax liabilities. For example, if a group of physician couples go on a vacation to a warm climate in winter, this is not tax deductible, but if they go to a "conference" they organize, then their trip will become tax deductible (as I understand it) and their vacation remains the same expect they will have formal discussions relating to their practice, increasing their knowledge.

 

The in-laws gave a gift in a most inefficient way and just as easily could have given the couple use of the vehicle, allowing one of them to be the insured main driver, while maintaining ownership, and there would have been no financial disadvantage with OSAP. Nobody bothered to take advice from an expert. This is not a moral issue, rather simply doing things is one's best financial interests - which we all do or should be doing.

[A-Stark]

lol. I don't know that I would use any words relating to "generous" with banks.

 

Haha, fair enough. What I meant is that the LOCs provide enough money over and above expected costs that many med students live, shall we say, more lavishly than is really reasonable. I'm not exactly innocent there either.

 

They aren't really doing medical students a favour. They make alot of money from those LOCs.

 

One of the reasons I see MD Management for financial advice...

 

I think we've gotten into a situation which encourages excessive spending and hence excessive debt. It's a boon for the banks, and it means med students can afford to go out to fancy dinners and buy new phones and laptops and go on exotic trips, but it's a far cry from our parents' generation.

 

When my dad was in med school aeons ago in the mid-70s, his tuition was something like $1,000 per year. He worked as a hospital janitor (including overnight morgue shifts) and never had any education-related debt.

 

I really don't think that's possible now. And that represents a tremendous opportunity cost.

 

On the other hand, if family members proposed giving me a $35,000 car, I'd suggest something cheaper with a warranty and use the difference to defray debt-financed consumption.

 

(Well, that's what I'd do if I were still a student. At this point I'd take the car, sell my current vehicle, pay off debt, all the while not affecting my many deductions.)

[schmitty]

Banks make almost nothing from these LOCs at prime. Yes, they will likely make money later if they snag you as a customer, but they make very very little (if anything) from the 3 percent interest, which, after inflation, management costs, the odd default, etc is defrayed.

 

As for the taxpayer comment, I most certainly have paid more into the system in the last few years of working full time than I have used. Also, that irrelevant as this money used for Osap is public money and should not be handed out to people who have 35k cars and the costs associated with that.

[rmorelan]

Banks make almost nothing from these LOCs at prime. Yes, they will likely make money later if they snag you as a customer, but they make very very little (if anything) from the 3 percent interest, which, after inflation, management costs, the odd default, etc is defrayed.

 

 

Yeah they really aren't making much money from medical students for the reasons you mention. They just want to get you for the eventual big payoff down the road when they will when you are really making money and have no time. A few minutes with some math will show how little they actually would be making with basic costs.

[itimebomb2]

Wow... a lot of hate from people who aren't even in med school yet. More shamefully, yet, are fellow med students unceremoniously raging on me and my wife when they know nothing about who we are and how we live.

 

Anyways, thanks for those with constructive comments.

 

This board is supposed to be for mutual support - shame on those of you who waste your time insulting and tearing down others.

[itimebomb2]

As for selling said gift, the point is that it amounts to somewhat less than $35,000, probably exceeding what OSAP would provide to an individual medical student in a single year by several thousand dollars. Why should someone with such assets have access to government-subsidized student loans?

 

That's fresh, coming from a supposed colleague.

 

Why should ANY med student, with a projected income of >200K annually, and who will have 100k of debt anyways regardless of government assistance, get any help?

[schmitty]

Wow... a lot of hate from people who aren't even in med school yet. More shamefully, yet, are fellow med students unceremoniously raging on me and my wife when they know nothing about who we are and how we live.

 

Anyways, thanks for those with constructive comments.

 

This board is supposed to be for mutual support - shame on those of you who waste your time insulting and tearing down others.

 

I'm sorry, but you essentially asked if there is any way to lie to screw over the government...