Student Debt Crisis

by Gary Seward
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Source: caglecartoons.com

Source: caglecartoons.com

Charlie was 22 years old when he graduated from university in 2009 with a BA in Psychology and 25 when he received his MA in counselling psychology. After university, Charlie began to embark on a rewarding career helping some of the most vulnerable and underrepresented people in Toronto, the homeless. Charlie is now using what he learned through school and volunteering as a Case Manager at a homeless shelter where he provides counselling and life skills support.

By the time Charlie graduated with his MA it wasn’t just a certificate he was presented with; he also accumulated $32,000 in student loan debt. That debt is considerably lower than the average debt of a student with a graduate degree because he worked full time through both degrees. However, in order for him to pay off his debt in 10 years he needs to make $400 payments per month, with $1000/year in interest alone.

Now Charlie has a job he loves but struggles under the weight of his debt. However, Charlie is lucky, real lucky.

The world of the post-secondary student today is vastly different from previous generations with new statistics from the Canadian Federation of Students painting a rather bleak picture. Since 2006, tuition fees have increased by 370%, compounded with textbook costs and rent expenses, some students are starting to question whether a degree is an affordable option.

According to the Canadian Federation of Students, the average student debt sits at $37,000. 

Canada has some of the highest number of graduates, which means the bachelor’s degree has become somewhat devalued. These days without post-secondary education means filling your life with mostly menial labour, service industry work and the like. But just obtaining a BA now entails years of financial hardship with only marginally better chances of a meaningful career.

With university tuition the highest it’s ever been at an average $5,138 per person, most students are faced with the difficult gamble of either giving up on the prospect of a higher career path or taking out student loans. According to the Canadian Centre for Policy Alternatives, the average cost of tuition has doubled:

  • 1976: $2,351
  • 1990: $2,607
  • 2012: $5,138

In a Gazette interview, David Molenhuis, national chairperson of the Canadian Federation of Students, notes that heavy student debt load is also forcing many to choose potential earnings over actual talent or interest in a career field.

StatsCan’s Youth in Transition Survey reveals that 70% of high school graduates who choose not to pursue post-secondary education cite its high costs to be the primary factor for their decision.

With these record high numbers it’s no wonder why we are seeing more post-secondary dropouts, more millennials on social assistance, and a record high national student debt rate of $15 B. Also why graduates are hearing that dreaded word “overqualified” more and more often and responding to it by tweaking their resumes to “dumb” themselves down.

Not going to university isn’t a prospect some students want to consider and do take the gamble. Using census data from Statistics Canada, Prof. Drewes found the earnings gap widened considerably between 1986 and 2006: College graduates in Ontario, between the ages of 21 and 30, earned on average 25 per cent more than people who were only high school grads, up from 12 per cent two decades earlier. The wage gap between university graduates and those with only a high school diploma climbed to 50 per cent from about 30 per cent. These numbers are rather encouraging, but not every prospecting college or university student can even afford the application fees alone. And with stagnated wages and tuition-related fees increasing every year, it’s becoming evident that the choice to attend post-secondary is once again becoming a choice only for the ones who can afford it. Leaving the rest with crippling debt or living lives with wasted talent and skills.

When I shared these stats with Charlie he didn’t seem to flinch and didn’t act surprised but added, “I needed to get out of my small town and university opened that door, especially because I had to leave the town in order to attend. Also, the only job [in his small town] I could get was at Wal-Mart…what other option did I have? I was so clueless about whether or not I would even have a future.”

It’s clear that Charlie made the right choice and his journey from high school graduate to university graduate to a career was certainly a rocky one. While Charlie may have to seriously sacrifice over the next 10 years until his debt is paid off, he acknowledges that he is privileged to know he has that security.

Post-secondary education is a wonderful option in order to secure a fulfilling life, but it’s time to acknowledge that it’s one that not everyone can afford. But isn’t education knowledge? And shouldn’t knowledge be accessible? So, why are we spending our lives paying for it?

Make sure to check out my upcoming article on the rise of students and graduates needing social assistance to survive that will include two stories from young Toronto residents.

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