According to BMO’s Annual Student Survey, 86 per cent of students in Canada expect to graduate with debt and 21 per cent expect to graduate with more than $40,000 in debt.
B.C. students expect to graduate with more debt than students in any other province, with Quebec students carrying a mean debt upon graduation of just $13,180 compared to students in B.C. who will be loaded with, on average, $34,886 apiece. (Quebec’s tuition fees are much less than those in B.C.)
B.C. students carry a heavier debt load for two major reasons, said Michael Olson, former national treasurer of the Canadian Federation of Students. In 2004, the B.C. government eliminated non-repayable options such as grants and B.C. students are charged the highest interest rates on student loans in Canada. B.C. charges prime plus 2.5 per cent, said Olson. Newfoundland and Labrador has no interest on its student loans and other regions in Canada range up to two per cent.
“There are long-term repercussions of entering the workforce with this debt,” said Olson, “including the inability to fully participate in the economy through starting families and buying homes.”
Olson said recent graduates often can’t work in their field of choice because it may not pay enough to help them repay the loans.
“Lawyers can’t go into not-for-profit work, doctors are resisting going into general practice, and we are seeing the same in other sectors,” said Olson.
Some students point out that entry-level salaries in their field are capped at $38,000 and they will have additional education costs. Repaying loans won’t be easy, at least for the first few years.
The BMO study also found that for most students, paying for school is a bigger source of stress than their grades, their personal relationships and concerns about finding a job upon graduation.
Students overall are relying less on parents and more on loans, their own savings, employment income and other sources. Overall, 58 per cent of students will be relying on their own money from a combination of sources for their education. And 73 per cent are working while attending school, up from 67 per cent in 2012.
