RBC survey finds students borrowing more but understanding less about how debt repayment works
Most Canadian students heading into post-secondary education expect to lean on borrowed money to get there, but a new survey from RBC suggests many are making that decision without a firm grasp of what it will actually cost them down the road.
The poll found that 57% of students currently use, or intend to use, some form of financial aid to cover their education. Despite that reliance, only 28% said they felt very confident estimating how long it would take them to clear that debt once they graduate, while a quarter described themselves as having low confidence in understanding how student loans function in the first place.
According to the study, students are committing to significant financing arrangements without a clear sense of how borrowing will shape their finances once they leave school.
Tuition is only one piece of the puzzle. RBC pointed to research showing that a single year of post-secondary study, once rent, food, transportation and course materials are added to tuition, can run past $30,000.
Students juggle multiple funding sources
The research also found that students rarely rely on a single source of funding.
RBC reported that 62% of respondents draw on two or more channels to pay for their education, blending government loans, scholarships, family contributions, credit cards and student lines of credit. Yet only 30% said they understood the practical differences between those options, including how a student loan compares with a line of credit or a credit card.
Sara Son-Hing, vice president, personal lending at RBC, framed borrowing as a tool that, used properly, extends beyond simply covering costs.
"Borrowing for post-secondary education is often a practical step toward future opportunity and earning potential," she said. "When students understand how debt works and repay it responsibly, student borrowing can do more than help fund education – it can help build credit and support future financial goals."
Borrowing as an ongoing process
Rather than viewing a loan or credit application as a one-off transaction, RBC said students and families are better served by thinking through how the debt will behave over time, what it is actually being used for, and how repayment terms might affect cash flow once classes end.
The bank set out four areas it believes families should work through before money changes hands. The first is having an early and honest conversation about costs, since students and parents often discover only after the fact that they had different assumptions about who would cover what.
The second is understanding the composition of the debt itself: money put toward tuition or required academic costs tends to align with long-term earning potential, whereas discretionary borrowing is harder to track and repay.
Third, RBC urged families to build in a financial cushion, noting that rent increases, job changes or other surprises are common during a school year and that budgeting for at least one unplanned cost per term can reduce strain.
Finally, the bank said repayment should be considered alongside the borrowing decision itself, since many students underestimate how interest accumulates and shapes what they owe after graduation.
