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You’ve graduated from college and started to build a career in Canada. You might be making good money, but those student loans are hovering over you like a dark cloud.

The average debt for bachelor’s degree recipients in Canada is about $28,000 — a number that many people can’t afford. Here are six tips for managing your student debt in these trying times.
1. Establish A Monthly Budget
The first step in managing your debt is to establish a monthly budget. Calculate the minimum dollar amount you can spend each month to support your lifestyle and living expenses. The final number will help you determine how much income you can set aside for student loans. It will also give you a rough estimate of how long the debt will last with your current income level.
Setting a budget is crucial for consistently making your payments on time. If you fail to do so, the National Student Loans Service Centre (NSLSC) can send your loans to the Canada Revenue Agency (CRA) for collection. In some circumstances, the CRA withholds tax refunds and automatically contributes a portion of your wages to your student debt.
Paying on time will also improve your credit score and ensure long-term financial success. It all starts with setting a realistic budget to control your expenses.
2. Make Lump Sum Payments
The more money you can devote to each student loan payment, the better. It will help you escape the debt faster and boost your credit score. It will also help reduce your loans’ interest rates when Canada resumes the accumulation of interest for student debt on March 31, 2023.
This payment method is especially useful during Canada’s six-month grace period for new graduates. Every dollar you devote toward your student debt in the first six months post-graduation goes to the debt’s principal. In other words, you don’t have to pay any interest during this period.
3. Try Paying Automatically
Another way to pay off your loans faster is through automatic payments. Some private student loan lenders offer discounts for people who automatically devote a portion of their paycheck to the debt.
Making automatic payments can be psychologically beneficial as well. Removing a small piece of debt each month without seeing the money makes things feel more manageable. Many people use the same trick when putting money into their savings accounts.
4. Cut Costs Elsewhere
If your student debt prevents you from making ends meet, you need to cut costs elsewhere. Here are some common expenses people overspend on:
- Groceries
- Coffee
- Online shopping
- Dining out or ordering in
- Household cleaning products
- TV and online subscription services
- Entertainment (travel, movies, concerts, etc.)
You might also consider refinancing larger expenses, such as your car. Students and recent graduates can get rates as low as 2.49% for driving certain vehicles. In any event, you should update the terms of your home and auto loan agreements to make more room for student debt.

5. Evaluate Your Living Situation
Everyone with student debt needs to be honest about their living situations. As with most other major cities, Toronto’s cost of living is expensive. It costs about $1,300 each month before rent for just one person. If you can’t afford to pay for an apartment by yourself, you must be open to roommates.
Thousands of students and recent grads in the Toronto area are looking for roommates. You can help each other pay off your student loans by making the cost of living more affordable. Of course, you can also return to your parents’ house to save money. That prospect might not seem appealing, but you may not have a choice if your debt is too steep.
6. Find A Side Hustle
If your current income level isn’t enough, you have three options: ask for a raise, pursue a promotion/higher-paying position or find another income source. In this economy, the third option is the most realistic. There are many side hustles you could pursue:
- Drive for Uber or Lyft
- Deliver food for DoorDash or Grubhub
- Rent out an extra bedroom
- Babysit or pet sit
- Do landscaping work for neighbours
- Sell items you don’t need on eBay, Facebook Marketplace, etc.
- Become a freelance writer, photographer or another content creator
You should also start practicing sustainable living habits to reduce your daily expenses. You don’t have to alter your lifestyle completely, but making a few necessary changes can go a long way toward resolving your debt.
Be Honest About Your Student Debt Situation
Honesty is the most important part of handling your debt. If you’re dishonest about your income, daily expenses and living situation, you won’t resolve your debt any time soon. Look at things objectively and determine how you need to adjust your routine to make your student debt more manageable.
About The Author:
Oscar Collins is the managing editor at Modded, where he writes about cars, fitness, the outdoors and more. Check out @TModded for regular updates!
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