Increasing number of college students faced with debt
Many college graduates are left with a diploma in one hand, and an inordinate amount of debt in the other.
A report conducted by the Canadian Millennium Scholarship Foundation on student debt, released November 1 stated that debt levels have risen for Canadian college students in 2006.
The study notes that many Canadians choose the college sector because the programs are generally shorter and less expensive than those offered by universities. For this reason, colleges have a great appeal to students from low-income or first-generation homes.
“In this context, the trends in Canadian college student debt are alarming,” the report said.
Fanshawe Student Union President Christine Thomson said students are being deterred from attending college due to the rising costs associated with school including tuition, and book costs, as well as the likely debt left over post-graduation.
“Money is a big reason why people get divorced. It is the same with students who don't attend school or don't finish school as well,” Thomson said. “Students think about money all the time, and sometimes it gets to the point where it becomes too much.”
According to the report, 44 per cent of college students have borrowed more then $10,000 for their education in 2006, which is up from 32 per cent just three years ago. In addition, 29 per cent of students have accumulated a debt of over $15 000, up from 17 per cent three years ago.
Manager of Financial Aid Services at Fanshawe College, Mary Stewart said students must take responsibility for managing their own debt.
“They should look at a budget, and find what the required school expenses are, and stay true to that budget,” Stewart said.
Items such as, cell phones, credit cards, and premium cable channels are things that Stewart said are unnecessary for students during their educational years and are part of the reason why they are left with debt.
“Students must include regular things such as tuition, books, regular phone, and basic cable in their budget, and wait till they are completed school to get the nice to have items,” Stewart said.
The Canadian government has put in place various interest relief programs to grant students grace periods where they do not have to pay off their student loan, due to lack of income.
The Canadian Millennium Scholarship Foundation report illustrates the failure of these programs to help students pay off their student loans.
In Ontario, students who graduated in 2002 and reported their status, only one-third of the graduates eligible for interest relief took advantage of the government's initiative to cover the debt.
The Canadian New Democratic Party (NDP) unveiled a plan on November 7 to help tackle the student debt crisis.
“The convoluted patchwork of tax credits and savings schemes created by Liberal and Conservative governments disproportionately benefit high-income families and do nothing to address student debt,” said Victoria, British Columbia, NDP MP Denise Savoie.
“Students need financial assistance when tuition is due, not when they are six years old, and not six months later off their taxes.”
The NDP strategy to reduce student debt includes a plan to double the current amount of various federal grant programs to over $1 billion, by canceling the Canada Education Savings Program and the Textbook Tax Credit.
The approximately $750 million in savings would go directly toward non-repayable grants averaging $1,500 for every student with Canada student loans in every year of study.
“An NDP government's first priority for post-secondary education would be to drastically reduce student debt,” said Savoie. “The yoke of debt is a tremendous burden on Canada's graduates as they begin their careers and a significant drag on our economy.”
The NDP strategy would also substantially increase federal transfers for post-secondary education, so that every province can freeze or roll back tuition, as well as re-invest in faculty hiring, resources and infrastructure according to its particular needs and the needs of its students.
“Tuition has grown out of reach for even middle-income Canadians,” said Savoie.
“The Liberal-Conservative strategy has been to tinker with taxes and increase loan ceilings, which have led to soaring debt loads. We have a different formula: lower tuition and more grants equals lower debt - pure and simple.”
Other options for students to reduce debt are applying for bursaries and scholarships, and obtaining a part-time job.
Stewart said students who are in financial need at Fanshawe can apply to the various bursaries available, and can apply for part-time work-study positions as well.
“School is very expensive and it is very scary to have debt afterwards,” Stewart said. “To reduce debt, students need to; limit their expenses, save money made at summer jobs, and get good grades so courses do not need to be repeated.”
The Canadian Millennium Scholarship Foundation distributes $350 million annually in the form of bursaries and scholarships.
A report conducted by the Canadian Millennium Scholarship Foundation on student debt, released November 1 stated that debt levels have risen for Canadian college students in 2006.
The study notes that many Canadians choose the college sector because the programs are generally shorter and less expensive than those offered by universities. For this reason, colleges have a great appeal to students from low-income or first-generation homes.
“In this context, the trends in Canadian college student debt are alarming,” the report said.
Fanshawe Student Union President Christine Thomson said students are being deterred from attending college due to the rising costs associated with school including tuition, and book costs, as well as the likely debt left over post-graduation.
“Money is a big reason why people get divorced. It is the same with students who don't attend school or don't finish school as well,” Thomson said. “Students think about money all the time, and sometimes it gets to the point where it becomes too much.”
According to the report, 44 per cent of college students have borrowed more then $10,000 for their education in 2006, which is up from 32 per cent just three years ago. In addition, 29 per cent of students have accumulated a debt of over $15 000, up from 17 per cent three years ago.
Manager of Financial Aid Services at Fanshawe College, Mary Stewart said students must take responsibility for managing their own debt.
“They should look at a budget, and find what the required school expenses are, and stay true to that budget,” Stewart said.
Items such as, cell phones, credit cards, and premium cable channels are things that Stewart said are unnecessary for students during their educational years and are part of the reason why they are left with debt.
“Students must include regular things such as tuition, books, regular phone, and basic cable in their budget, and wait till they are completed school to get the nice to have items,” Stewart said.
The Canadian government has put in place various interest relief programs to grant students grace periods where they do not have to pay off their student loan, due to lack of income.
The Canadian Millennium Scholarship Foundation report illustrates the failure of these programs to help students pay off their student loans.
In Ontario, students who graduated in 2002 and reported their status, only one-third of the graduates eligible for interest relief took advantage of the government's initiative to cover the debt.
The Canadian New Democratic Party (NDP) unveiled a plan on November 7 to help tackle the student debt crisis.
“The convoluted patchwork of tax credits and savings schemes created by Liberal and Conservative governments disproportionately benefit high-income families and do nothing to address student debt,” said Victoria, British Columbia, NDP MP Denise Savoie.
“Students need financial assistance when tuition is due, not when they are six years old, and not six months later off their taxes.”
The NDP strategy to reduce student debt includes a plan to double the current amount of various federal grant programs to over $1 billion, by canceling the Canada Education Savings Program and the Textbook Tax Credit.
The approximately $750 million in savings would go directly toward non-repayable grants averaging $1,500 for every student with Canada student loans in every year of study.
“An NDP government's first priority for post-secondary education would be to drastically reduce student debt,” said Savoie. “The yoke of debt is a tremendous burden on Canada's graduates as they begin their careers and a significant drag on our economy.”
The NDP strategy would also substantially increase federal transfers for post-secondary education, so that every province can freeze or roll back tuition, as well as re-invest in faculty hiring, resources and infrastructure according to its particular needs and the needs of its students.
“Tuition has grown out of reach for even middle-income Canadians,” said Savoie.
“The Liberal-Conservative strategy has been to tinker with taxes and increase loan ceilings, which have led to soaring debt loads. We have a different formula: lower tuition and more grants equals lower debt - pure and simple.”
Other options for students to reduce debt are applying for bursaries and scholarships, and obtaining a part-time job.
Stewart said students who are in financial need at Fanshawe can apply to the various bursaries available, and can apply for part-time work-study positions as well.
“School is very expensive and it is very scary to have debt afterwards,” Stewart said. “To reduce debt, students need to; limit their expenses, save money made at summer jobs, and get good grades so courses do not need to be repeated.”
The Canadian Millennium Scholarship Foundation distributes $350 million annually in the form of bursaries and scholarships.
