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A friend was suggesting to me that it would be wiser for me not to spend money that I am currently earning, since as a student, I am in a very low tax bracket / below the lowest tax bracket. Their suggestion was that I should rather put all the money I earn aside, and pay all my schooling using student loans.

The rationale behind it was that when I exit school, I will be in a fairly high tax bracket, and the amount that my taxes will be lowered by the deduction of my payments for student loans will more than compensate for the amount of interest that I have to pay on the loans.

From my understanding, it is only the interest on student loans that can be deducted from one's earning, not the principal. Obviously, if this is the case, his argument falls apart entirely, since the taxes I pay on the interest cannot be higher than the interest itself.

Will I be able to deduct the principal on a student loan from my earnings? I'm in Canada for reference.

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