Canada + Provincial loan forgiveness + finance related stuff

[bloh]

This is relevant for those that are starting residency in July and I was hoping that we could start a discussion regarding the financial aspects of the transition.

 

 

1 .Are there any loan forgiveness programs available? Any personal experience?

 

2. Are we still considered "in school" and eligible for tuition credits, etc?

 

3. What's the general consensus regarding LOC? Are we required to start paying it back? Is the rate still the same or is it going up?

[Loafy]

There are loan forgiveness programs, yes. Federally, there is incentive for rural family physicians (including both residents and practicing docs). This also applies for nurses. Max $40,000 debt reduction from your federal portion of student loans

http://www.canlearn.ca/eng/loans_grants/repayment/help/forgiveness.shtml

 

Yup, still considered a full-time student for CRA purposes. However, this hasn't trickled down yet to student loans. As an R1 your gov't student loans will enter repayment as they consider you employed. When filing tax returns though you get the full-time student benefits.

 

As for the LOC this depends on who you're with. Most of the banks will stay at prime during repayment. However, they don't force you into a certain repayment schedule like the gov't student loans will try to do. You can still draw on your LOC throughout residency if you have room to do so. Most residents will try to make their interest payments on the LOC and focus on the higher interest student loans.

 

In an ideal world you would have lots of space on a $250k LOC and could consolidate your provincial student loans onto your LOC (assuming no provincial debt reduction programs exist where you are). Then appeal your repayment plan for federal loans and ask for a reduction in monthly payments. Milk that and apply for the debt reduction program for rural docs. If this doesn't apply to you, I'd consolidate both. Many of us aren't consolidating anything though because we're almost maxed out

 

Hope this helps!

[bloh]

Thanks for that. So is that the only loan forgiveness program that's available? I vaguely remember reading something that they will forgive some of your debt if your loans are over 100,000$ but I can't see that anywhere. Was this scrapped?

[bloh]

So I checked in with my bank (scotia) and they will continue to give me the prime rate all through residency + 1 year post residency. I don't have to repay anything but the interest gets added on top of the sum (i.e. exactly like med school).