Student debt loads continue to increase: StatsCan
Students are graduating from post-secondary institutions saddled with debt and are taking much longer to become financially self-sufficient.
The proportion of students with heavy debt loads of $25,000 or more rose to 27%, up from 17% in 1995, according to the most recent Statistics Canada data.
This is hampering recent graduates when it comes to saving for the future and, in some cases, is also forcing their baby-boomer parents to postpone their own retirements.
And it doesn’t get much better from there — at least not in a hurry. The average assets of postsecondary graduates aged 20 to 29 who had borrowed money was $60,700, compared with $106,300 for those who hadn’t taken out loans.
Student-loan borrowers could only lay claim to an average net worth of $17,500 — less than a third of the $61,900 average for those with no loan.
This goes a long way to explaining why more than 60% of baby-boomer parents admit to providing roughly $3,700 a year in financial support to their adult kids. And why they don’t see things changing anytime soon.
While the majority of baby boomers claim they were financially self-supporting by the time they were 21, they don’t expect their children to achieve the same goal until at least 25.
Are you still strapped with student debt? Are your parents helping you over the hump?
By Gordon Powers, MSN Money
Posted by: SP | Mar 1, 2022 8:38:22 AM
Is this a surprise for anyone? The baby boom generation had their parents pay through the taxes for their education but they have been unwilling to pay for their own children's education. This is how Canada moves further from Europe and more towards America/Hong Kong. Which is GREAT (if you're wealthy). Should provide wonderful opportunities in the home security industries
Posted by: Lisa | Mar 1, 2022 10:45:04 AM
Well, I'm a parent now, although I went to university years ago. (no debt now...finally...)
The bottom line here is, KNOW what career you want when you go to college/university. RESEARCH colleges and universities and KNOW WHY you want to go WHERE you want to go.
Remember, the more WAGES you are going to get out of your career when you graduate dictates how much DEBT you are going to have at graduation time. For pete's sake...DON'T go to unversity if all you need is college!
If you discover a year or two into your program that you don't want to be there...get out quick!
Remember...noone but YOU pays at the end of it all...one way or another.
Posted by: Don | Mar 1, 2022 11:31:46 AM
I think there are a lot of "baby boomers" that paid for their own education. With a dollar being what is it in todays terms I dont think 25,000.00 is a lot to owe for an education. Most would spend more than that on a vehicle when they graduate in a heartbeat but feel it is to much for them to invest in their own future.
Posted by: Stephanie | Mar 2, 2022 3:29:32 AM
At least most people have the option of going to government funded colleges universities. Most art/performing art colleges and institutions cost between $8000 to $30,000 a year on tuition payments alone. Parents should be proud to support of their children in following their goals, in comparison to the many parents how can't financially support their children's education.
Posted by: Jim Davidson | Mar 2, 2022 8:06:09 AM
There needs to be more education about the benefits of contributing to an education savings plan starting from birth or even before. With very little contribution on a regular basis, debt for at least the first degree will be largely eliminated. With that kind of preplanning my own three children ended up with no debt for their first degrees and and received sufficient bursuries and scholarships to pay for subsequent degrees.
Posted by: Gen Xer | Mar 2, 2022 8:11:53 AM
This is a tough one. I have an RESP for my sons but i will have to increase my contributions significantly in the next year or two to ensure there will be enough for them. I want my sons to also contribute once they are old enough to have part-time jobs - it should be a family effort and they need skin in the game in order to see the value of their education costs. When I was in University so many kids goofed off and took 5 years to complete just a 3 year degree. What a waste. I did my 4 year degree in 4 years and I worked part-time up to 20 hrs a week all that time too.
I feel as a parent that i want to ensure my kids have a good start in their adult life and i do not want them to be saddled with student debt. I will pay most of their 4 year degrees and if they need to go to grad school (if they choose and occupation that requires that) then I will do what I can to help them with that too. After all, they are my kids and I have a responsibility to them. It may mean a few less trips etc. for us but family comes first.
Posted by: Lisa | Mar 2, 2022 9:59:20 AM
Great points "Gen Xer." I'm also of your generation.
I was one of those that got my education paid for...and it was VERY stupid of my parents. I was young (early 20's) and very foolish. However, if it makes you feel any better, I DID "pay" for it later in life.
It was my spouse that DIDN'T get as lucky as I did...and there was nearly a decade of another "mortgage" we were paying out. It was tough...but I"m very proud to say, we did it!
I completely agree with you that education should be a "family" effort! Yes!!
Posted by: Kat | Mar 2, 2022 12:38:04 PM
I am in university right now, and tuition has increased 120% in the last 20 years. You could have a part time job and pay for all tuition back then. Today, a part time job gives the money for groceries. While I do not think that parents should pay for all of my education, they should be contributing a large portion of it, so I'm not worried about getting more hours at work, instead I'm focusing on my studies to get scholarships.
To anyone who graduated 20 years ago: it is MUCH more costly to get a degree now. Tuition has risen 20% in the last 4 years, and is rising another 5-7% this coming year. Stop complaining that our generation thinks that we're "entitled" and start looking at the actual cost of our education. Maybe then you'll realize that education needs to change.
Posted by: Don | Mar 2, 2022 1:38:18 PM
It is costly but you are getting the benefit in higher wages. What is that worth when you factor in the number of years X the increased wage? Why should taxpayers making a lot less than an university graduate foot the entire bill. I would be interested to hear what students think is a fair share.
Posted by: Lisa | Mar 2, 2022 1:47:01 PM
Yes Kat: If you read carefully, BOTH your parents and yourself should be responsible for your education. Also, remember, Universities/colleges, just like everything else in life runs on "supply and demand." Obviously there is HUGE demand out there for top jobs/top dollars.
Maybe if we brought our expectations down, just a little, and went to college (not as expensive) and would "settle" for a job that didn't make QUITE as much money as going to University...then "demand" at Universities would come down...and guess what??...expenses would also come down. That is simply the way this society works.
Does anyone realize that years ago...before my time...only the "elite" or wealthy were educated?? We are actually extremely lucky in OUR society that anyone with drive and a goal IS allowed to attend University and pay back debts AFTER their higher education. (Maybe that's the problem.)
Posted by: Lin | Mar 3, 2022 12:09:00 PM
I'm always torn on this subject. I paid for my university education myself through a combination of part time work and loans. 5 years later I still have about 3 years left to pay off on my loans. Can I do it on my own yes, and I'm proud that I have. Would I like to have had a little help from my parents? Yes. 13 years of scrimping and saving(5 in school, 8 paying it off) is a large consequence to pay for a degree.
Yes its possible to pay for on your own with government loans but it's very difficult. If it wasn't for the fact that I met my future husband when I did and we ended up moving in together I'd still be at a students standard of living, so its a hard pill to swallow. I'm still paying off my loan myself but having someone to share household expenses with reduces the bills a bit.
Posted by: Lisa | Mar 3, 2022 2:35:08 PM
Lin, I now know, there is always great sacrifice for a great achievement.
The question really is, to any person, are you willing to sacrifice that much, for that achievement?
I wish someone would have told ME that I would be sacrificing for a decade. Sometimes I feel jilted that I wasn't given all the information up front. (and I know people who sacrificed longer than a decade)
Posted by: Tom | Mar 4, 2022 2:33:16 AM
I'm a "baby boomer" who defaulted on my student loan years ago. Why? Because I was making $125 a month and my student loan payments were $200. I paid my loan back in the end but I was almost 50 before I had it paid off. Not everyone in the baby boomer generation did well. I'm a teacher now with a masters in education and I do quite well so far as income goes but the legacy of the student loan I had and could not pay off has had repercussion all through my life. RRSp's? Forget it. I don't have the money. RESPs? I've got a little for my kids but no where near enough to pay for their post secondary education. I've met a number of people over the years who have defaulted on their student loans and not a single one has ever been a neer do well who just doesn't care. They have all been honest people who simply do not have the income to make the payments. The thing with a student loan is that you can not return it if you can not make the payments. You buy a car and can't make the payments - you can sell it. The same with a house. You can't do that with an education.
I can not understand how our society can afford to have so many young adults so far in debt. It takes years of higher income earnings to recover the costs of an education. Individual net worth says it all. If we want an educated workforce we need to be prepared to pay for it
Posted by: Lisa | Mar 4, 2022 8:26:20 AM
Tom, our government (our taxes), in effect "us"... CAN'T afford to pay it!
Why do you think our taxes are so high?? The money has got to come from somewhere to pay off all our debts. The "government" money doesn't fall from the sky. What makes ME angry with alot of people is they go bankrupt to get out of their responsibility BECAUSE it's going to take a decade or more to pay. Well, you shouldn't have gotten yourself so deep in the first place. (My husband was one of those people...but together we decided he wasn't going to go bankrupt.)
I agree, that in the end, it's your responsibility, not your parents and not the gov't. Yours.
Like you,my family doesn't have much in "extra" savings...although I keep some because frankly I don't trust the canadian gov't, to any great deal.
Anyway...years ago, under the liberal government, our country dropped in the standings, financially with the G7. I remember because it went, barely noticed, by many people. I"ll tell you, it scared the pants off my parents though...and now I know why.
Posted by: Greg | Mar 9, 2022 3:34:15 PM
The travesty of it all is that despite the fortune forked out for higher education, the reward for Gen Xers is lower salaries and reduced opportunities because the baby boomers still monopolize the workforce. Most of the latter were very successful with little more than high school, but now you need a PhD to collect garbage.
Posted by: Geoff | Mar 9, 2022 3:37:43 PM
There's no excuse for any parent not being able to put money into an RESP for their kids. The baby bonus more than covers the contributions.
Posted by: Lisa | Mar 10, 2022 11:28:21 AM
I so agree with you Greg. However, here is the "core" problem, after talking around to my age group (and I'm a "gen xer"), is that we were told, when finishing high school, by our guidance counsellors (who should have known what they were doing), that UNIVERSITY solved all of our problems. We weren't told to worry about debtl...just go to university. Many of us SHOULD have been told to go to COLLEGE. And you are right...we are suffering for it because we have had huge debts from university BUT only got jobs that we could have had out of college. (College is cheaper.)
Posted by: Don | Mar 15, 2022 5:16:09 PM
Greg: So the "baby boomers" have ruined everything. You know what...then give up your cell phones, give up the luxury's and live on what the baby boomers did when growing up. I can guarantee you wont be happy. As far as them working...what do you expect them to do? They still have to eat. Maybe give them all cigarettes and they will die off faster and not cost so much in their later years.
I am sure every babyboomer worked hard for years with the interntion of ruining your life. Whats the problem? Not getting enough soon enough or easy enough. You are the future...you dont like it...change it.....problem is there might be sacrifice. It might take you 30 years to build a decent life .
That is what it has taken for most "babyboomers" to do so. You are speaking of rewards when you havent put much into life to get any.
Posted by: free ringtones | May 9, 2021 3:53:00 AM
wow that is just ammazing
Posted by: Dr. J Lindon | Jan 2, 2022 2:15:06 PM
@Don... great post. I couldn't aree with you more. I am a "Boomer" and had to make great personal sacrifices early in my life to get to where I am now. My parents and grandsparents (and so on) all did the same. My education was 100% free, as I was given scholarships from the government and industry for my extremely high academic achievements. When I joined the workforce, my income was quite low and housing costs had peeked. I lived in very modest conditions to keep my debt load at a minimum. My standard of living was well below that of my colleagues, who accumulated huge debts for oversized houses and fancy cars. I was often criticized for the way I lived. By making these sacrifices early, working my way up in my field, investing wisely, I now can live in luxury, even in hard economic times. I heard that the economy tanked in 2008. Hmmm... didn't notice.