Funding Medical School

[ikillreid]

Thanks for the heads up. I also hadn't considered the impact of a car on OSAP funding.

 

For myself, it looks as though I could buy a car worth up to $10,000 before it begins to reduce my OSAP funding.

 

Is it possible to pay for insurance for the purpose of driving your parents' vehicles? I feel like there's no way around this without committing fraud. :S

[amichel]

Thanks for the heads up. I also hadn't considered the impact of a car on OSAP funding.

 

For myself, it looks as though I could buy a car worth up to $10,000 before it begins to reduce my OSAP funding.

 

Is it possible to pay for insurance for the purpose of driving your parents' vehicles? I feel like there's no way around this without committing fraud. :S

 

I don't know about the OSAP issues, but it's perfectly legal (at least in BC) to be insured as the primary driver on a car you don't own. When my parents bought me a car in high school, I was insured as the primary driver, even though the car was in their name. I didn't transfer ownership to myself until several years later.

[rmorelan]

Thanks for the heads up. I also hadn't considered the impact of a car on OSAP funding.

 

For myself, it looks as though I could buy a car worth up to $10,000 before it begins to reduce my OSAP funding.

 

Is it possible to pay for insurance for the purpose of driving your parents' vehicles? I feel like there's no way around this without committing fraud. :S

 

in some cases that is just the case - you may trying to bypass a restriction that you shouldn't. That was my point before - people just don't realize that is in the same vein from the governments point of view as ODSP or employment insurance etc. There are asset restrictions for that reason - which would seem silly if you don't look at it from that point of view (homes are excluded for instance as an asset - so I had access to OSAP but owned outright real estate. Same with RRSPs to a point - the logic is those are long term assets the government doesn't want you to have to sell as it is against their goals. The goverment likes RRSPs and home ownership ). The intention is that if you are getting social assistance you should not have large assets you can be using instead.

 

Tax avoidance, or dare I stretch it to OSAP grant reduction avoidance is legal and should be encouraged in a sense - outright evasion is not. You are allowed a reasonable car if needed and that makes sense. Driving around in a nice new car paid for effectively by the government's grants for education however do not (in 10 years that is exactly the sort of thing you will be complaining about as a full tax payer, ha!) and you should be "punished for that choice". We need to use that money for other projects/people - something that both left and right political view points agree upon generally.

[amichel]

in some cases that is just the case - you may trying to bypass a restriction that you shouldn't. That was my point before - people just don't realize that is in the same vein from the governments point of view as ODSP or employment insurance etc. There are asset restrictions for that reason - which would seem silly if you don't look at it from that point of view (homes are excluded for instance as an asset - so I had access to OSAP but owned outright real estate. Same with RRSPs to a point - the logic is those are long term assets the government doesn't want you to have to sell as it is against their goals. The goverment likes RRSPs and home ownership ). The intention is that if you are getting social assistance you should not have large assets you can be using instead.

 

Tax avoidance, or dare I stretch it to OSAP grant reduction avoidance is legal and should be encouraged in a sense - outright evasion is not. You are allowed a reasonable car if needed and that makes sense. Driving around in a nice new car paid for effectively by the government's grants for education however do not (in 10 years that is exactly the sort of thing you will be complaining about as a full tax payer, ha!) and you should be "punished for that choice". We need to use that money for other projects/people - something that both left and right political view points agree upon generally.

 

I don't have nearly your training in economics, so correct me if I'm wrong.

 

In this case, you're not really paying for a new car with government grants/loans, because the reasonable needs, aka tuition and living expenses, exceed the amount given in loans/grants anyways, that's why the rest needs to be covered by the LOC.

 

So, the new car is being payed for by privates loans, which is acceptable.

 

Obviously this would be different for an undergrad, because tuition and living expenses would NOT exceed the amount given in grants/loans.

[rmorelan]

yeah but the osap people don't see it that way - they do NOT count expenses only assets in their calculations. Their argument is simple - no matter how much it costs, if you have a 20K car you can sell it to pay for the schooling.

 

so as an example let's us say you actually need a car (some don't afterall - I never got one as a counter example). Let's also look at two students both going to western (as that is the subforum for western after all) so that is 4 years. :

 

Guy A:

 

gets a new car, say it is only 20K which isn't too much really and is applying to osap, bursarys, and LOC. The full gambit really.

 

The max OSAP you can get is about 17500 a year, of which you have to pay back 7500 - the rest is a grant. He applies with is car and gets a lot less than the max, may get say 7500 due to the car (osap is pretty brutal - use the calculator to see). That means he just lost out on a 10K grant.

 

Then he applies to his bursaries - trouble is again he has a large asset, and again they will reduce the amount he can get likely again because of the high priced car. Could be out a few thousand more (or more). Not pretty. Nailed again!

 

Then he has his fully LOC of course (probably what he used for the car). So for this year he is out say 10-15K approx over guy B:

 

Guy B:

exactly the same except he has a cheap car or no car. He gets max OSAP of 17500 or so (10K grant), bursary (5K) and the same OSAP.

 

Ok so that is say 15K - but it is also 15K a year - for 4 years, or 60K PLUS all the interest you have to pay on the LOC (another 2K a year at current interest rates by the end and who knows how long it will take you to pay it off etc, and of course some along the way).

 

That is not trivial amounts after all. Best of all his LOC is also 60K less, which means now in residency he can do interesting things - like maybe use that a downpayment on a house so ultimately there is less interest to pay on the mortgage (as there is downpayment now at 20%, the other guy might not have that - that means a lower mortgage rate under current rules - quite a bit less actually). That means perhaps even more saving later on (lower interest, owns a house which is rising in value....). That 60K was 3x the cost of the car as well of course - that means really that 20K car cost 80K.

 

Not to make this too extreme - ha - but really there is message here I guess is being a little frugal can actually really pay off. Money management is a critical skill that really should be high school level instruction in math class (vastly more useful that almost all the other math, and this is coming from a computer programmer with a large math background). Everyone needs to learn it Not exciting, but useful.

 

there are a few subtleties I am glossing over here, but I didn't want to make it too complicated - just make the point about the price you pay for ignoring osap's rules

 

 

 

I don't have nearly your training in economics, so correct me if I'm wrong.

 

In this case, you're not really paying for a new car with government grants/loans, because the reasonable needs, aka tuition and living expenses, exceed the amount given in loans/grants anyways, that's why the rest needs to be covered by the LOC.

 

So, the new car is being payed for by privates loans, which is acceptable.

 

Obviously this would be different for an undergrad, because tuition and living expenses would NOT exceed the amount given in grants/loans.

[jfdes]

There is nothing in the system that prevents you from using your LOC for buying your parents a car. It is kind of gaming I guess but technically within the rules. The tricky part is insurance then though.

 

Also you are allowed a car under osap - just not a particularly good one. You are limited to 5K but it can be increase with information from your program a bit.

 

Finally you cannot get around this by leasing a car - OSAP will still take the full value of the car as an asset even if you don't actually own the car. It is annoying but in the rules - they fell that if you can afford a lease on a 20K+ car you don't need social assistance - and that is exactly what OSAP is, a form of social assistance designed to help pay for school for people with less available resources. That is why your parents income in most cases matters, that is why your assets matter, and that is why the grant vanishes if you have too high an income.

 

Ah ok thanks, lots to consider haha.

 

So in the calculator, there wasn't any space to fill in my parent's income, does that consideration only take place once you apply to OSAP? I wouldn't say we're super rich or anything, but my parents were able to fund my undergrad completely (4 years tuition) without me having to take student loans (I had to pay for housing from my own savings though), would that mean I would get considerably less funding? I'm also working at a non-profit part time and expecting to earn about ~2k over the summer lol

 

 

EDIT: didn't see the rest of the posts after the response above. So I guess what I'm trying to ask is, how accurate is the OSAP calculator given that they didn't ask for my parent's income as well, which, although not extravagant, is probably higher than average? Your argument that talks about potentially being 60 - 80k out by the end of med school rests on the fact that you would receive maximum OSAP funding throughout. If you don't (and also if you go to a 3 year program like Mac), then the potential loss seems to decrease quite a bit.

[rmorelan]

Ah ok thanks, lots to consider haha.

 

So in the calculator, there wasn't any space to fill in my parent's income, does that consideration only take place once you apply to OSAP? I wouldn't say we're super rich or anything, but my parents were able to fund my undergrad completely (4 years tuition) without me having to take student loans (I had to pay for housing from my own savings though), would that mean I would get considerably less funding? I'm also working at a non-profit part time and expecting to earn about ~2k over the summer lol

 

that should not matter to you anymore as you have been post high school know for at least 4 years. Finally they consider you to be outside of getting your parent's help (the government both for osap and also for child support expects parents to help for your UG to a point. That is reflected as well in the rules - again it is one common philosophy just applied broadly. The government is actually not as random with the rules as people sometimes make it out to be)

[rmorelan]

Ah ok thanks, lots to consider haha.

 

EDIT: didn't see the rest of the posts after the response above. So I guess what I'm trying to ask is, how accurate is the OSAP calculator given that they didn't ask for my parent's income as well, which, although not extravagant, is probably higher than average? Your argument that talks about potentially being 60 - 80k out by the end of med school rests on the fact that you would receive maximum OSAP funding throughout. If you don't (and also if you go to a 3 year program like Mac), then the potential loss seems to decrease quite a bit.

 

So in the calculator, there wasn't any space to fill in my parent's income, does that consideration only take place once you apply to OSAP? I wouldn't say we're super rich or anything, but my parents were able to fund my undergrad completely (4 years tuition) without me having to take student loans (I had to pay for housing from my own savings though), would that mean I would get considerably less funding? I'm also working at a non-profit part time and expecting to earn about ~2k over the summer lol

 

get the max isn't really that big of an assumption in this case - our tuition is/was huge, and parents as I mentioned are out of the picture. Most applicants don't have a lot of assets after 4 years of UG

[jfdes]

get the max isn't really that big of an assumption in this case - our tuition is/was huge, and parents as I mentioned are out of the picture. Most applicants don't have a lot of assets after 4 years of UG

 

Ah ok, thanks a lot for all the insight!

 

I guess I should try and burn through my $1500 of savings before applying then, if I manage to get in somewhere in Ontario...

[rmorelan]

Ah ok, thanks a lot for all the insight!

 

I guess I should try and burn through my $1500 of savings before applying then, if I manage to get in somewhere in Ontario...

 

ha - that is exactly the sort of thing that drives economics people nuts - Rules that create an inefficiency.

 

At least it adheres to one of the primary laws of economics - people respond to incentives

[ikillreid]

The max OSAP you can get is about 17500 a year, of which you have to pay back 7500 - the rest is a grant.

 

The max is 17.5k? So when the estimator tells me 21.7k, it's just estimating how much buffer I probably have before my actual loan of 17.5k will get reduced? It seems to tell me I would get 18.7k in loans, less 7.7k of which would be grants + an additional federal grant of 3k. This leaves the loan portion at 11k, and total grant value at 10.7k.

 

In fact, it seems as though I could own a car worth 8,500 before my loan decreases at all from 21.7k, at which point there begins to be a 1:1 dollar decrease in my estimated loan value per dollar asset I own. This decrease takes place in the grant portion first, of course.

 

So now I'm not sure what funding I would actually get, and if it's less than 21.7k (but more than 17.5k), where the reduction would be (grant or loan, or both). Also, the estimator suggests that I could own a car worth 12,500 before I'm only entitled to 17.5k loans, but then only 6.7k of this is grant money.

 

Any thoughts on the discrepancy between 17.5k vs. what the estimator is saying?

[rmorelan]

one of those details I mentioned I glossed over

 

OSAP pays out an amount PER WEEK. Medical school is 40 weeks standard for most years but of course clerkship is 52 weeks and mac for instance is different as well

 

So it is possible to get more. I got 21.5 for instance during clerkship.

 

that 5K I throw around for the car value was an example for a standard UG year. Medical students are slightly higher etc. Another minor detail (if you hit someone with it all at once it is a 3 page essay )

 

bottom line is this is why that calculator is so useful - you can min/max things basically

 

 

The max is 17.5k? So when the estimator tells me 21.7k, it's just estimating how much buffer I probably have before my actual loan of 17.5k will get reduced? It seems to tell me I would get 18.7k in loans, less 7.7k of which would be grants + an additional federal grant of 3k. This leaves the loan portion at 11k, and total grant value at 10.7k.

 

In fact, it seems as though I could own a car worth 8,500 before my loan decreases at all from 21.7k, at which point there begins to be a 1:1 dollar decrease in my estimated loan value per dollar asset I own. This decrease takes place in the grant portion first, of course.

 

So now I'm not sure what funding I would actually get, and if it's less than 21.7k (but more than 17.5k), where the reduction would be (grant or loan, or both). Also, the estimator suggests that I could own a car worth 12,500 before I'm only entitled to 17.5k loans, but then only 6.7k of this is grant money.

 

Any thoughts on the discrepancy between 17.5k vs. what the estimator is saying?

 

EDIT: Does this have to do with the fact that I was using McMaster's program to estimate? Do they look at the first year as Sept '14 --> Nov '15, and therefore increase funding by one-half semester's worth to 21.7k total?

[ikillreid]

Nevermind. It appears to be because I was using McMaster's program as an example. I guess this must have something to do with the first year deemed as lasting from Sept '14 --> Nov '15.

 

So I guess I can own 8,500 of assets before my loan is impacted for the year.

 

EDIT: Haha, I figured this out just as you posted. Thanks rmorelan! Good to know I can trust the estimator.

[amichel]

yeah but the osap people don't see it that way - they do NOT count expenses only assets in their calculations. Their argument is simple - no matter how much it costs, if you have a 20K car you can sell it to pay for the schooling.

 

so as an example let's us say you actually need a car (some don't afterall - I never got one as a counter example). Let's also look at two students both going to western (as that is the subforum for western after all) so that is 4 years. :

 

Guy A:

 

gets a new car, say it is only 20K which isn't too much really and is applying to osap, bursarys, and LOC. The full gambit really.

 

The max OSAP you can get is about 17500 a year, of which you have to pay back 7500 - the rest is a grant. He applies with is car and gets a lot less than the max, may get say 7500 due to the car (osap is pretty brutal - use the calculator to see). That means he just lost out on a 10K grant.

 

Then he applies to his bursaries - trouble is again he has a large asset, and again they will reduce the amount he can get likely again because of the high priced car. Could be out a few thousand more (or more). Not pretty. Nailed again!

 

Then he has his fully LOC of course (probably what he used for the car). So for this year he is out say 10-15K approx over guy B:

 

Guy B:

exactly the same except he has a cheap car or no car. He gets max OSAP of 17500 or so (10K grant), bursary (5K) and the same OSAP.

 

Ok so that is say 15K - but it is also 15K a year - for 4 years, or 60K PLUS all the interest you have to pay on the LOC (another 2K a year at current interest rates by the end and who knows how long it will take you to pay it off etc, and of course some along the way).

 

That is not trivial amounts after all. Best of all his LOC is also 60K less, which means now in residency he can do interesting things - like maybe use that a downpayment on a house so ultimately there is less interest to pay on the mortgage (as there is downpayment now at 20%, the other guy might not have that - that means a lower mortgage rate under current rules - quite a bit less actually). That means perhaps even more saving later on (lower interest, owns a house which is rising in value....). That 60K was 3x the cost of the car as well of course - that means really that 20K car cost 80K.

 

Not to make this too extreme - ha - but really there is message here I guess is being a little frugal can actually really pay off. Money management is a critical skill that really should be high school level instruction in math class (vastly more useful that almost all the other math, and this is coming from a computer programmer with a large math background). Everyone needs to learn it Not exciting, but useful.

 

there are a few subtleties I am glossing over here, but I didn't want to make it too complicated - just make the point about the price you pay for ignoring osap's rules

 

Oh I'm not arguing that it's a good idea, just that it doesn't actually use government money due to the high cost of med.

 

But, if they calculate it that way, it's a moot point.

[rmorelan]

Oh I'm not arguing that it's a good idea, just that it doesn't actually use government money due to the high cost of med.

 

But, if they calculate it that way, it's a moot point.

 

exactly - effectively the money is lost, regardless of where you or I would say the money came from. The true end cost is all that matters - and the true end cost is quite high