Debt Weighs Heavily On The Minds Of Students

MNP's TAKE: As the cost of living and tuition continues to increase year after year, thousands of Canadian students find themselves taking on significant debt loads to cover the cost of post-secondary studies. In order to truly focus on succeeding in the academic world, many rely on credit to cover day-to-day expenses or to create a financial buffer for the costs part-time work simply cannot cover. Pair under-employment with credit reliance and a hefty student loan and you've got yourself a perfect storm.  

Student debt can be completely overwhelming, especially at a time when you are trying to focus on your studies and lay the foundation for a successful future. While it's not easy to budget with so little income (if any) coming in, establishing ground rules for your spending could help you avoid small expenses that can quickly add up on a credit card bill. Perhaps you can purchase your school books used, replace your daily coffee run with a coffee maker in your dorm or apartment or do bulk grocery runs with a roommate or friend. 

If debt has already started to take hold and you feel trapped, it's important to remember you're not alone. Depending on your unique position, there may be several options available to help you on track to achieving a fresh financial start so you can get back to studying. Contact Grant Bazian, CIRP, President of MNP Ltd. at 778.374.2108 or [email protected] for information on what debt solutions are available to help you.

Many of this year’s new postsecondary graduates have left the academic world carrying tens of thousands of dollars in debt. Meantime, those heading to college and university this fall will soon contend with steep tuition rates that often result in a similar burden.

While schools attempt to lessen the load by offering financial aid, average student debt appears to be climbing. So some institutions are also responding by beefing up their mentalhealth services to help students cope with life in the red.

“We’re worried about one type of debt – student debt – and we want to know how to pay it off as quickly as possible,” said Dillon Collet, who is about to enter his final year at the University of Toronto’s faculty of law and sat on the dean’s advisory committee on financial aid.

The committee organized a financial aid workshop that discussed the psychology of debt. It was well-attended, Collet said, with about 60 students in the room and a lineup outside.

The committee’s student representatives also pushed to have tuition fees – and their connection to student stress – to be discussed at the faculty council’s meeting each year, Collet said.

“A lot of students suffer silently.”

Estimates suggest average student debt in Canada is past the $25,000 mark.

In 2013-14, graduates finished school with an average of $12,480 in federal loan debt, according to numbers from the Canada Student Loans Program.

However, that figure doesn’t include provincial or private loans.

An Ontario student graduating from a four-year university program, for example, shouldered an average of $22,207 in provincial debt in 2012-13. That makes for a total debt load of more than $34,000 if they also borrowed the average sum from the federal government.

The Canadian University Survey Consortium surveyed more than 18,000 graduating university students from 36 Canadian universities for its 2015 annual report. The average debt-ridden student owed $26,819.

Such a debt load can have an impact on a student or graduate’s mental health, though only a small amount of published research exists on the apparent link.

A 2015 journal paper analyzed data from a U.S. Bureau of Labour Statistics survey of more than 8,000 youth in the United States – where tuition fees are significantly higher than in Canada – to determine if debt load and psychological well-being were connected.

“Students who took out more student loans were more likely to report poor mental health in early adulthood,” said one of the paper’s authors, Katrina Walsemann, an associate professor at the University of South Carolina.

Canadian experts have also noticed a link, even though Canadian students don’t generally go into as much debt as their American cohorts.

Jillian Yeung Do, York University’s director of student financial services, witnessed it while working with a student. While she couldn’t provide much detail for privacy reasons, she said she became really concerned about a student.

“After that encounter, I decided that it would be a good idea to – for myself, personally, and as well for the entire team – to be trained in having these conversations with students,” she said.

The university’s health educator taught the financial services staff how to identify students in distress, listen to them and provide proper referrals. York University also plans to launch a new financial literacy campaign soon, she said.

The University of Toronto’s faculty of law staff, including its financial aid workers, will also have training on mental-health issues next month, said Alexis Archbold, the assistant dean of the JD program. She’s also the chair of the dean’s advisory committee on mental health and wellness, formed this past academic year.

Archbold and the committee spent the year listening to students’ primary concerns. Unsurprisingly for a professional program, she said, high tuition and the anxiety of the corresponding debt load emerged as one of the common themes.

The school’s new academic, personal and wellness co-ordinator will work with Archbold this summer to develop a wellness strategy, she said.

The committee will continue to hear f rom students on how to improve the strategy, which seems to fall in line with at least some of what the students want.

“We want a platform in which we can engage with the faculty and the administration,” Collett said, “and we can really talk about the nuts and bolts.”

 This article was written by Aleksandra Sagan from The Globe And Mail and was legally licensed through the NewsCred publisher network.