Rising tuition and costs of living leave students with unappealing options to tackle them
Given all of the negative consequences that come from unbridled student debt — postponed retirements, delayed home purchases, and financial anxiety, to name a few — it should be no surprise that incoming post-secondary students are less keen to take on student loans.
That’s the picture emerging in B.C., where high school students are less inclined to apply for such debt in spite of increased pressure in the face of rising tuition costs and costs of living in cities, reported CBC News.
“We are a generation that has grown up watching our older siblings, watching the millennial generation coming out of university with a tremendous amount of student debt,” Helena Marie Hill, a student in Victoria, told the news outlet. “We're terrified that if we come out of university with debt we're never going to be able to live in the cities we grew up in.”
The impact is by no means confined to B.C. According to studies by Hoyes, Michalos & Associates, millennials in Ontario are carrying much more student debt than previous generations. They have also found that student debt figures in 1 out of every 6 insolvencies, up from just under 13% nine years ago.
In a 2017 Ipsos poll, over 75% of Canadian graduates younger than 40 years old said they regretted taking on student debt. Figures from Statistics Canada say that the average university graduate is $26,000 in the red by the time they finish school.
The decision to avoid student debt may be prudent, but it gives rise to other hard choices. For Hill, it means going to the University of Victoria, which is located in her home city and will therefore let her avoid the costs of studying outside B.C.
“[Going out of province] is just not financially an option for students who didn't get $40,000 in scholarships,” she said.
Financial pressures could also push students into making academic courses against their own wishes. CBC News cited the example of Vancouver student Ember Dickson, who chose to take biomedical engineering in spite of her interest in arts.
“If I went into engineering right away, I'd also be able to make enough money to go into arts perhaps later on because I'd be already set up and I'd be able to, you know, take courses later on at a film school,” she told the news outlet.
Because of the sheer burden represented by college costs, parents may not be able to shoulder it all by themselves. Having an RESP strategy and applying for other education-linked benefits may help, but in many cases, the children also have to help fund their own schooling. Some may even take a gap year to work and build up an education fund for themselves.
While taking care to avoid debt could be difficult, it could certainly help students build financial savvy that would come in handy later on. “If you develop those skills when you're 17 or 18 that's a stepping stone for the future,” personal finance specialist Mark Ting told CBC News. “You'll be much better at planning for other bigger purchases. And the fact that you have less debt going forward in life it just makes things easier.”