Alberta Student Loans are quirky, as is any government program. But one thing most medical students don’t realize is that the Alberta government won’t give you the maximum loan you’re eligible for automatically – you have to ask for it. Keep in mind, the deadline to apply for (or request additional) student loans is 1 month before the end of your semester, so if you’re a University of Calgary MD student, you have until February 29 of first year to apply.
If you browse through the Student Aid Alberta website you’ll find that the maximum amount of funding you can get is $7,500 per semester, which isn’t very helpful since medical school semesters are kind of screwed up, and in any event when you actually applied you probably got ~$22,500 or so of loans.
And the reason you got $22,500 in loans is because buried inside the dry-as-a-bone 123-page Student Aid Alberta policy and procedure manual is this little table:
So the standard loan that Alberta Student Aid gives to all first year medical students for their first two semesters is $22,500, unless you’re deemed to have enough personal resources (e.g. you or your spouse are rich) that you don’t require government help. And if you’re in that situation, you should know that Alberta Student Aid must give you enough loans to cover tuition/fees and books, regardless of how much money you otherwise have. Simply fill in the Reconsideration Form (details further down) and follow these instructions:
On the other hand, if you got the $22,500 and that’s not enough (and unless someone else is paying for your housing and food, it won’t be), there’s a way to get more.
Buried down on page 56 of the student policy manual is the follow gem:
I’ve highlighted the lines that are applicable to medical students, which is that if you’re in medical school (which is a program listed in section 2), you can get an extra $7,500 for each year you’re enrolled, as long as you’re below the lifetime limit. As of February 2016, the lifetime loan limit is $175,000 for medical students:
So we’ve established that you’re eligible for up to $7,500 in extra money. How do you apply for it?
You’ll want to fill out a Reconsideration Form, which you can either print and mail in, or upload it online through your Student Aid Alberta account.
Note that you’ll only need to fill out the first 2 pages of the form, and in the box labeled “Reason for Requesting Additional Funding”, explain that:
- You’re a medical student who’s eligible to borrow up to $7,500 extra per year
- You didn’t receive enough money to cover your living expenses, which are:
- $xxx a month in rent
- $xxx a month in food/clothing/transportation, etc.
For faster service, I suggest you include proof of your housing expenses, such as copy of your lease, rent receipts or check images – if they have to ask you for these, it could delay your funding by a few weeks.
Now, even if you don’t pay rent because you live with your parents, you could still be eligible for extra funding, although it might not be the full $7,500. Alberta Student Loans uses the following chart to determine your funding if you’re single without dependents.
Tuition/fees and books at the University of Calgary are estimated at $21,882 for the 2015-16 year, so add 8 months (12 months if you’re in 2nd year and up) worth of expenses to that, then subtract what you’re already gotten in loans, to figure out roughly how much extra money Student Aid Alberta will give you.
So you might be thinking, why should should get more student loans if you already have a line of credit, or you can borrow from your family?
There are a few good reasons to max out your student loans:
They’re interest free till graduation from residency (provincial loans)
That’s potentially thousands of dollars interest saved. Although interest rates are low on lines of credit, that interest rate is variable (it could go up at anytime), and it’s not tax-deductible later on. And if you’re borrow money from your family, that’s money they don’t have to invest, so they’re still losing out by lending it to you.
They help you qualify for means-tested scholarships and bursaries
Most medical schools have scholarships and bursaries that are given to the neediest students. And your degree of need is generally assessed by how much money you owe the government. Lines of Credit don’t count towards your indebtedness, only government student loans. So if you’re going to be in debt, owe it to the government, because it helps you qualify for free money.
Student loans are sometimes forgiven
Occasionally, governments (usually Liberal or NDP governments) will forgive some portion of your student loans. It might be a percentage, or a fixed amount, but there’s a chance you won’t have to pay back all of your loans. There may also be special programs to forgive large chunks of your loan if you practice in a rural area. In other words, student loans are sometimes free money.
Student loan interest is tax-deductible
As I implied earlier, any interest you pay on student loans is tax-deductible. This may not mean much now, but later on when you’re raking in the dough as an attending, every dollar you pay in student loan interest will generate a tax refund of anywhere from 30 to 50 cents, depending on what tax rates are. So in effect you’re getting a big discount on the interest. It may still make sense, though, to pay off your federal loans with a line of credit when they’re no longer interest-free, since federal interest rates tend to be quite high. But I’ll write about the best strategy for that later on, if I ever graduate from medical school 😉