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