Student loan debt increasingly overwhelming: report
21% of post-secondary students admit to finding it hard to make ends meet, 36% believe getting through their financial difficulties will be a struggle and 41% of students are spending more money than they save, according to a recent TD Canada survey.
What’s worse, the majority of students anticipate they will be in debt when they graduate; 69% of students predict they will graduate with some debt, while 17% expect their debt will be $25,000 or more.
Good guess. According to the most recent Statistics Canada data, two years after completing school, Canadian students owe an average of $21,000 – although many professionals can lay claim to three or even four times that amount.
Student loans, like any massive debt, enslave the debtor — particularly since most student-loan payments are deferred until the borrower leaves school. That has the unfortunate effect of making it easy for students to ignore expanding balances. In many cases, students and their families don't understand the consequences of their choices until the bills come due.
The ripple effects, however, are significant. A growing body of research suggests that heavy loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones — from buying a first home to even marriage and having children — as well as impacting their health.
Contrary to popular belief, most students don't seem to have that many folks pitching in on their behalf either, TD reports.60% of the survey respondents said their parents pay for a quarter or less of their expenses, compared to 10% who said their parents pay for 75% or more. If they borrow from their parents, 41% say they are expected to repay the loan. However, an almost equal number (43%) expect their parents to let them off the hook.
What's your story? Are you haunted by debilitating payments? Is your family still helping out or are you on your own? Was it all worth it?
By Gordon Powers, MSN Money
Posted by: Jeff | Aug 26, 2021 7:47:51 PM
The suggestions to lower tuition and other related costs keep popping up but there is one small problem with this, the costs still have to be paid. The only way to do this while lowering the cost of education to the student would be to either cut back significantly on the types of education offered or to raise taxes for everyone (and this will eventually include the students) to cover the cost of education.
Posted by: Rob | Aug 26, 2021 7:58:40 PM
I think the main problem with students today is that they expect to continue to live the quality of life they have grown accustomed to at home once they move out and start school. I am a university graduate who received no financial support from my parents and graduated debt free. I have worked full time during summers, part time during school, never took any expensive vacations, quit several more expensive hobbies and own a less than impressive car. I always find it strange that more often than not, tuition and debt in general is being discussed at a bar or restaurant eating some appetizers, drinking a beer or while showing the latest pictures of your Europe trip, taken on your new SLR digital camera on your new lap top screen. Students don't go into debt from tuition, they go in debt from their lifestyle.
Posted by: Steve | Aug 26, 2021 8:22:00 PM
We can afford 'free' high school 'free' prescriptions for seniors, 'free' pensions for the elderly but we as a society can NOT afford 'free' higher education for those who are building the future knowledge economy of the future for Canada??? I don't think that I am the only one who can see the insanity of this approach. As for the high cost of US university, Try comparing it degree granting state colleges instead of Brown/GW/Harvard/Princeton/Yale (who incidentally give out 'full ride' scholarships not available in Canada). A few points; Women have a limited fertility window, time spent paying off student debt eliminates easy pregnancy years, immigrants can and do fill the spots where Canadian births are lacking but are also proven to be more likely to end up needing more consular assistance abroad (Afghanistan, Somalia, Guantanamo Bay, Iran, etc, etc, etc), A degree can be as cheap as a car BUT purchasing a car doesn't require you to move and give up your career for 4 years.
We as a society can choose to move forward by supporting our best and brightest and then taxing them upon completion or we can retain this Crab mentality (wiki' it if you're not familiar) and follow other countries spiraling downwards, not naming names....
Posted by: DoIsoundFedUp2U? | Aug 26, 2021 9:17:44 PM
My kids had/have jobs and through discussions about who is ultimately responsible for their education - we agreed to put half of every paychq in a savings account (not even an RESP which would have been better). This generation has never had it so good as far as how much min wage has gone up vs tuition. Kids bagging groceries at Sobeys make more then I was making just 8 years ago. My 14 y o son and I sat down and did the simple math of $9/hr x 15hrs/wk (during school) =$135/wk x 40 wks = $5400 for working only 6 wks of summer @ 25hrs/wk gives him an extra $1350 - that gives him 6 wks off/year and only really ever working part time but still giving him $3375 in savings with almost $64/week of spending money for the entire year - that is significant money!! In university you have almost 4 months off in the summer - my daughter only worked 2 months and made over $4000. Pick a university that is close - should be a no brainer- unless you want to take something totally obscure - your local university likely has a quality program - this is Canada not the USA... ALL of our universities are GOOD. Living at home might not be cool but it is CHEAP! By the way, owning a car is NOT a necessity it is a very expensive luxury esp when you factor in ins/gas/repairs not to mention the actual purchase price. If you own one while you are in university - you have no right to b*@$% - there are adults with jobs and families who get by on public transportation. And for those that want to complain about not being able to find a part time job...lower your standards!!! I heard that from my kids until I pointed out that they only seemed to be applying at all the 'fun/cool' places to work. And for any of those that want to bring up 'kids shouldn't have to work during school' or they 'need time to be kids' pick up a bloody newspaper once in a while and read about the 5 and 6 year olds of the world who have to walk 2 miles every day just to bring their family back drinking water - ask your own grandparents, one of which (statistically speaking) likely had to either quit school to help pay to support their family or never believed that university was ever even an option. Yes, education is costly but it gives YOU a greater earning potential for the next 45-50 yrs of your life - so quit whining and get on with it or...don't...you have a choice.
Posted by: dig1234 | Aug 26, 2021 9:37:21 PM
I am a 4th year student at the U of R. When I graduate I'll have roughly $35,000 in student debt; however I do own a condo and a car. My parents did not pay for one cent of my tuition because it was my decision to go back and get my degree. Also, I have RRSP's and my credit is pretty good for a 24 year old. Typical students don't see the big picture and most of them have their parents pay for their schooling. Most students don't understand the value of money and just spend it like there's no tomorrow because of their age and not having to defend for their own. Also, kids don't know that 18% interest on a credit card is bad and most of them max it out and have troubles getting a house or a car. At the end of every month I see a lot of students at the bars blowing their loans that they receive. There are responsible ones out there that know when they are out what they have to pay back (which I'm hoping i'll work my butt off to pay the debt before I'm 30).
Posted by: Chris | Aug 26, 2021 10:24:05 PM
To most a degree means a level of acheivment and rightfully so. I have two young children and I work 300 to 500 hours a month. I have no degree,except for the university of life, I will save hope fully enough money for there first two years of tuition. But I expect them to start thinking about what there goals for education will be and I will expect them to work through high school and save there money and put it toward there future goals. And when they need to borrow from the bank to help pay for there education then I will expect them to work and live within there means and pay there debts off .I belive that just because you come out of school with a degree that you should have a standard of living that your parent had, don't go out to eat or go to the bar or indulge your self because you think you need it. Put your nose to the grind stone and own up to your responsibilities. Also just because you have a degree dosent mean you will be well off at the start but all good thing come to those who wait. So go to school chose wisely in your caree path and plan and save and don't expect everything to come at once and your debt levle will not overwhelm you.
Posted by: SJ | Aug 26, 2021 10:34:18 PM
Please remember that education empowers people and societies. Ask those who are deprived of such a blessing: education. Loan can be managed but ignorance has a much higher price to pay.
Posted by: N | Aug 26, 2021 10:39:14 PM
This is an interesting topic for me..
I have been out of university for a couple years now and have struggled to pay off my masses of loan debt which equal approximately 60,000. I was not overly smart with money when I was in school and if I could do it over again I would. However that said, moving from a small town to a big city with big city costs definately weighed in on this figure. I worked a part time job while I was in university, however the minimum wage was not putting any dent into my 'savings'.. rather it contributed to necessities. I chose to put my focus into school and not burn myself out by taking on way too many work week hours on top of clinicals, regular courses, the stress, etc. I wanted to finish and actually learn as much as I possibly can. If I am paying all this money I didn't want to just scrape by or compromise my grades since I was already getting myself in loads of debt anyhow. I figured, make it worth it!
I began school with a scholarship also for about $10,000 which helped, but still didn't make a big difference in the end. I am so lucky I chose a career I could use right out of school, otherwise I would be completely up the creek without a paddle. My boyfriend owes $40,000 from his schooling and so we are starting our lives together mid twenties owing 100,000. All through university I stressed and stressed about loans and money. I was not careless but I could have been smarter I suppose and lived on potato chips and easy mac.. eating healthy is expensive alone!
Bottom line is, I do NOT THINK THE GOVERNMENT LOAN PROGRAM SHOULD BE CHARGING MORE INTEREST THAN MY BANK STUDENT LINE OF CREDIT! (If any!)
I have failed to get very far ahead over these past years. I still struggle to this day. I am sorry, but 800+ dollars is a lot of money to spend every month while still trying to keep my life afloat. That is a large portion of my earnings and leaves with barely any wiggle room. I moved west for a while at one point and made much more money because of the wage as well as the one as opposed to two taxes taken off your income. I took a step back by moving to nova scotia, however my family is here and needs me, and my heart is here. They say they want more of us to stay in nova scotia, and in Canada. Perhaps make it a little easier to pay off the principal amount of loans and people won't be leaving. We should support our own a little better, and not make a profit off of it. I absolutely love my job and am glad I focused as much as I did in school, because it helped shape me into who I am today. I just wish it was a little easier to get ahead. Also, just in case you are wondering, I am a Registered Nurse. I help people with young families, and I am in no position to have my own any time soon.
-N.
Posted by: Cathy | Aug 26, 2021 10:42:26 PM
My daughter graduated from a Canadian university 2 years ago. Despite bursaries and my help she still has over $25,000 to pay. And yes she worked every summer and during the year. She is presently working on her Masters degree in a European country, which is apparently bankrupt, at no cost except for an initial entrance fee of $900 and the ability to pay her own living expenses which are no greater than here..rent $250 a month. Here 7 students paid $400 each to share a house. Education should be available to everyone..not just those with the means to pay.
Posted by: Sr Grasshopper | Aug 26, 2021 11:36:52 PM
Do not let the fear of post secondary debt deter you from getting a degree/diploma from a college or university. In the end, even if you cant quite see it, the debt is worth it. You'll work hard to pay it off, it sucks but its worth every penny.
Posted by: N | Aug 27, 2021 12:57:29 AM
Sr Grasshopper, I agree that it was a good decision for me to go to university. However, something needs to be done to help people like me (there are many!!) who don't have any help from parents because they don't have the means to get by themselves. We put lots of government money into other things that are not as important. Come on Harper!! Do some good for Canada's future. Not all the positive contributors to society come out of stable families. For those who need to make it on their own, give them the opportunity to without having a massive disadvantage starting fresh out into the world. It's pitiful really.
****My advice to new high school grads...****
If you don't know for sure what you want to take, explore the world a bit and spread your wings. Find out somewhat who you are or who you want to be. And only THEN should you invest these masses of debt into your future. If I would have taken a simple science or arts degree with no direct job afterwards I'd be kicking my butt right now. And likely bankrupt. I don't even have that option actually due to the student loan bankruptsy ban of sorts. I have a dear friend who is as smart as they come. She took a bachelor of sciences and specialized in biochemistry and microbiology and wants to work in a lab. Think she could find a job anywhere in Canada after upgrading for extra courses for this over a year? Nope. She went to teach english in Japan for 2 years. Now she is back with lots of debt and no career prospects. CHOOSE YOUR CAREER CAREFULLY. Plan. Good luck all.
Posted by: Small Town | Aug 27, 2021 9:47:23 AM
I think the cost of education is extremely high and needs to be lowered by the gov't. In highschool they teach you how important it is to continue your education but what they don't tell you is that you will battle debt for the next several years of your life! They wonder why college and university students are so stressed. When I applied for a student loan they denied me because my parents were divorced and they took into account both parents income plus there spouses incomes. Denied because my parents make too much money yet they paid nothing towards my education! Why can't Canada offer paid education like France? I realize taxes are alot higher there but I would rather them take a little more off of each of my pay cheques than me pay high interest on a student loan for the next 5-10 years!
Posted by: don | Aug 27, 2021 12:03:22 PM
Most people struggle with debt all their lives. We did not get out of debt until we were over 45. The idea that you will be debt free within 2 years of graduating is ridiculous. Most wont be debt free (for some reason or another) well into their working lives. Several years to pay off a debt is nothing!!! Are our students living in reality ? Why is OK to carry debt for any reason except your own education? It all takes time. As far as "free"...there is that damned word again.....nothing is free.....if you look at these coutnries that offering "free" education they are swimming in debt with taxation rates above 50%, being forced to change and teetering on the edge of bankrupcy. . What if you dont have the marks to make it in university.Under the edcucation for all no one should be turned away. Are you offering to keep those people in school until they can graduate even if it takes years or do you just feel a few should be prividged and to *ell with the rest? All they get is to pay for the benefit of a few? Are we are such a selfish people
that we would force those without the ability to pursue higher education to not only pay for the edcuation of a few but then to pay high prices for the services of those we educate? Seems lose lose to me.
Posted by: Lisa | Aug 27, 2021 2:41:55 PM
Alot of good comments here. I went to the University and received a simple BA. I might as well call it a BS, for all the good it did me. I ended up one of the lucky few, with no debt, however. On the other side of things, my husband also went and we ended up with a huge debt JUST from HIS education. It ook us about 10 years to pay off...so to all those students complaining about a FEW years...you have a long row to hoe still, I"m afraid.
To "N," who seems very frustrated, you mentioned about "positive contributors"...the REAL problem for someone like yourself is the majority rules, NOT the minority. Yes, it's frustrating for someone like you. However, Harper or any other Prime Minister can't be throwing away taxpayers money to just anyone, just like your parents can't throw money at you. Remember, government money is really YOUR taxes, when you eventually have a job. How would you like VERY high taxes along with your gov't loan?? ...and you're complaining now.
However, "N," I DO agree with your end statement. To anyone THINKING of entering college/university, THINK this career through. DON'T go to college/university until you are positive about what you want to do for the rest of your life...and that IS the way you should look at it.
If you don't think you are ready for "the rest of your life" yet...take a break from school, get a part-time job and SAVE almost everthing you make, while living with your parents. By the time you hit your mid to late 20's, you will have alot of money saved and you will know what you want in life AND you won't be begging your parents OR the gov't for alot of money. Really, it's a win-win situation. (And yes, that means not partying and a lack of freedom for awhile yet. Is that really the end of the world?)
What hasn't been covered here, I don't think, is that they took out Grade 13. How the heck are kids, yes KIDS supposed to know what they want to do with their life, turning 18, when years ago, people like myself didn't know what they were going to do with their life turning 19. Does anyone else see that taking out Grade 13 just didn't make a whole lot of sense?
Anyway...good topic...wish I had this blog to look at 20 or more years ago.
Posted by: Jeff | Aug 27, 2021 3:59:10 PM
When I went to school 25 years ago the costs were only a fraction of what they are now, ie tuition maybe $1000.00.
Someone needs to ask the question where is all this money going, what are the schools doing with it? from the students perspective the education they get is the same as it was 25 years ago but in real terms cost 3 times as much. What do the schools use the excess money for? Administation and buracracy gone crazy?
Posted by: don | Aug 27, 2021 4:33:53 PM
I am not sure, but i dont think the issue of accumulating debt has as much to do with the amount tuition being charged as the amount it takes to live while in school?? Although tutions have increased I dont think they have increased nearly as much as the cost of living. Am I incorrect?
Posted by: Derek | Aug 28, 2021 12:15:14 AM
This is ridiculous. All these irresponsible people wanting free money. I graduated in 2005 after 8 years of university (undergrad& professional) with 15k debt. I did this by having a part time job and working lots of hours (60+)in the summer. If anything the government loans are too generous, we used to call OSAP the "Ontario Stereo Acquisition Program", guess what we spent it on..ok, we bought booze also!
I'm sick of people blaming the government for this. You knew the terms when you took the loan, it's on the document, don't complain that you now have to pay them back. If you would have gotten a part time job while in school and worked 10 hours a week, you would have made over 5k a year, which after 4 years would nearly wipe out the average 21k student debt. For that matter, you could get a part-time job now and pay the loan back within 4 years. Why not get started?
Don't complain about lack of time. I worked, partied and still managed to graduate with honours and a masters degree. It's not rocket science, work hard and you'll be rewarded. Slack off and you'll pay for it later.
Posted by: Ryan | Aug 28, 2021 3:31:32 PM
Exactly what I was getting at Dan, good points. Its a privilage to live in Canada shouldn't be considered a right. Enjoy what we have, work hard, and hope to have a good to modest retirement.
I think my 4 years at university were a great experience and learnt many things, but if I had the chance to do it all over again I would suggest college or trade school to my children or anyone looking for advice. Just my opinion.
Posted by: Rob | Aug 30, 2021 1:07:23 AM
Don, I agree with your opinion that eliminating useless courses is the best way to reduce education costs. One professor once told us after graduating he only had to use about 5% of what he learned. As an accounting student, 5% of the degree is philosophy courses, which is a complete waste of time. Students should be offended that the Ministry of Advanced Education is stupid enough to design our education like that. A garbage man could probably do their job better.
Posted by: SK | Aug 30, 2021 1:16:35 AM
Education is an investment and I don't regret my $34,000 Student Loan debt. I went to University across the country knowing the cost and understanding the outcome. The thing about this whole post education situation is how incredibly frustrating it is to deal with NSLSC and the job market. Despite my low interest rates of 2.5 + prime (which I am very thankful for since it is lower than your average credit card) NSLSC is the most frustrating agency to deal with - denying interest relief for someone on EI and postponing the process so 3 months later they can call you up and ask for 3 months of loan payments (loans are on hold during any application for relief process)...they set deadlines and expect paperwork to be back to them by the deadline when the paperwork doesn't arrive until after the deadline they set...Very stressful.
Aside from my NSLSC angst I think the real issue is that although I was prepared to graduate with a lot of debt I did not anticipate the fact that I would be working for $10-13/hr for the first 2 yrs out of University and then in my 3rd and 4th yr out of University I am making good money but on term contracts. Unfortunately this means that at the end of the contract I am unemployed looking for work again with the hopes of finding something in the same field so I can continue to build my experience. Eventually I will get the break of landing a full time permanent position within my desired field so I can actually get on track and pay off my loans for more than 6-10 months at a time. They say it takes 5 yrs to see profit with any new small business, so that is how I treat this whole scenario but it does not mean it is easy, it is incredibly frustrating.