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Important Stats on Student Debt

Student debt is increasingly becoming more and more of an issue for many Canadian students and graduates. According to the Canadian Federation of Students, in 2010, the total amount of student loans owed to the government was $15 billion. This number does not include provincial student loans or other types of loans such as lines of credit, personal loans, etc. This is obviously a very high number.

Here are some other student debt statistics that are important to know:

  • The average Canadian student debt for those with debt is about $27,000.
  • When including debt-free students, the average debt for all graduates is about $14,000
  • It takes an average of 14 years to pay off student debt.
  • A BMO study found that student debt rose 24% between 2005 and 2012.
  • In 2012, about 60% of graduating students had some form of debt.
  • A 2015 poll found that 48% of students are most worried about paying for school, living expenses and repaying student debt.
  • The same survey found that 37% of students aren’t sure if they will be able to handle their finances when they finish school.
  • A Statistics Canada report from 2010 found that average student tuition fees have doubled within the last 20 years.
  • This same Statistics Canada report found that student loan borrowers tend to have lower assets and lower net worth than those who have not borrowed money for school.
  • Another Statistics Canada report from 2012 found that $28.3 billion was owed in student loans. This is an increase of 44.1% from 1999 and 24.4% from 2005.
  • A 2013 study from the Canadian Centre for Policy Alternatives showed that the average cost of tuition and compulsory fees for undergraduate students in Canada will rise about 13% in the next four years.
  • Other studies found that one in eight Canadian families are carrying student debt.
  • TD Canada Trust research in 2013 found that 30% of post-graduate students accumulated more debt than they expected and 40% found it difficult to meet minimum payments on student loans in the two years after graduating.
  • This same TD study found that 40% of those surveyed are delaying buying their first home due to student debt. In addition:
    • 36% are putting off starting a family.
    • 23% are waiting to get married
    • 18% won’t move out of their parents’ home until they repay their student debt.
  • A February 2015 Labour Force Study by Statistics Canada showed that youth unemployment in Canada is 13.3%. This is higher than the national average of 6.8%.

Repaying Student Debt

That statistics and facts above show that many students have high levels of student debt and that this debt is not only difficult to repay, but it is also causing people to delay life milestones such as purchasing a home, getting married or starting a family.

Students who are having difficulty repaying student loan debt have a few options:

  • Revision of Terms
    • Those who are having trouble making their monthly student debt payments can request to have the terms of their loan changed. It is possible to extend the time period available to repay the loan up to 15 years. This will make monthly payments smaller. However, it will also result in paying more interest due to the extended time period.
  • The Repayment Assistance Plan
    • The government’s Repayment Assistance Plan is designed to make it easier for people to manage their student loans. Under this plan, loan payments are reduced (or even eliminated) depending on a person’s financial situation.
    • Enrollment in this plan is not automatic. A person must apply for the plan and must reapply every six months.
    • The Government of Canada and the provincial government of the applicant will pay the interest owing that is not covered by the revised payments. This will last for up to 60 months or until you are 10 years out of school, whichever comes first.
    • After this point, the federal and provincial governments will start to cover the principle as well so that the loan is paid off completely within 15 years of a person finishing school (or within 10 years if you have a permanent disability).
  • Bankruptcy or Consumer Proposal
    • Student debt can only be included in a bankruptcy or consumer proposal if the person has been out of school for at least seven years.
    • If you have not been out of school for the required seven years but you have additional debts  such as a line of credit or credit card debt, you may wish to consider filing  for bankruptcy for these debts alone. Once they are eliminated it may be easier for you to start meeting your obligations on your student loans
    • Also, Under the Bankruptcy & Insolvency Act, there is provision apply to have student loans included in either your bankruptcy or consumer proposal if you have ceased to be a student for five years instead of seven. You will need to prove to the court that you have acted in good faith in taking out and attempting to repay your student loans and that you would experience undue hardship if you had to wait an additional two years.