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TD Canada Trust offers advice on how to manage finances during grad school so students can plan for the future sooner

TORONTO, July 24, 2013 /CNW/ - Today's post-graduate students face skyrocketing tuition costs and a tough job market, which creates a financial challenge after graduation. According to new research from TD Canada Trust, 30% of post-grad students accumulate more debt than expected and 40% find it difficult to make minimum repayments on student loans in the first two years after graduating, ultimately preventing many new graduates from moving onto the next phase of their lives. In fact, many admit to postponing a number of life milestones, including buying a first home (40%), starting a family (36%), getting married (23%) and even moving out of their family home (18%), until student debts are repaid.

"A Master's degree offers the opportunity to delve deeper into a field of study, but the balancing act of borrowing heavily to finance education versus saving for the future has to be taken into account," said Shahz Beig, associate vice-president, TD Canada Trust. "For students making the personal decision to begin post-graduate studies, it's vital to create a financial plan and work with an expert to find smart financing options, like a student line of credit, to help pay for school."

Beig, a recent post-graduate student himself, provides tips on how post-graduate students can borrow responsibly and balance education costs with other financial priorities:

  1. Save, save, save - Start saving as early as possible and invest the money in a tax-efficient way to help it grow. Students should also apply for scholarships, grants and bursaries and consider borrowing money from their RSP to put towards their education. The Lifelong Learning Plan (LLP) allows students to withdraw up to $10,000 a year from an RSP to finance eligible education, to a maximum of $20,000 over four years.

  2. Live on a budget - It's important to diligently monitor daily and monthly cash flow to ensure debt doesn't escalate. To create a budget, list all funds available from scholarships, grants, work, family and savings. Then calculate all expenses for the month, including tuition fees, books and rent, in addition to food, entertainment and personal items. Subtract the estimated expenses from the available funds. If it's a negative balance, take another look at how to reduce discretionary spending. Consider affordable ways to fill any gaps in your savings, such as a student line of credit to help cover essential expenses like tuition, books and living costs.

  3. Create a long-term financial plan - Meet with a financial advisor to help create a realistic plan for borrowing that also includes debt repayment and investments for the future. An effective tool for student financing is a professional Student Line of Credit (SLOC). Designed specifically for post-graduate students, a professional SLOC allows students to control how much of their credit limit they want to withdraw, and when. Unlike a traditional loan or credit card, a SLOC can offer a lower interest rate and increased flexibility when it comes to repayment.

About the TD Canada Trust Savings Poll

TD Bank Group commissioned Environics Research Group ( to conduct an online custom survey of 590 Canadians who are currently attending post-graduate education or attended in the past three years. Responses were collected between January 10 and 25, 2013.

About TD Canada Trust

TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.

SOURCE: TD Canada Trust

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