Almost two-thirds of students need loans

Dawn Wiseman

Fifty-nine per cent of full-time Canadian students require loans to finance their post-secondary education.

While the financial burden of Canadian students is significantly smaller than that of their U.S. counterparts, the average graduate earns their diploma along with a $24,000 debt load.

According to Laura Stanbra (Director, Financial Aid and Awards), 32 per cent of Concordia students receive government loans, “and more of them borrow money directly from banks or from parents and family.”

In Quebec, the average debt at graduation is at least $10,000 less than the Canadian average, for two reasons.

First, tuition here is the lowest in the country. Second, Stanbra explained, “when the provincial government received the monies from the Canadian Millennium Scholarship Fund, it was allowed to define how those dollars were used.”

Quebec chose to increase the percentage of student aid covered by bursaries, which do not have to be repaid. Seventy-two per cent of Concordia students who have loans also have bursaries.

Still, postsecondary financing is a controversial subject. Reductions in transfer payments from the federal government to provincial/territorial governments over the last decade or so have resulted in a general rise in tuition, and, in places where tuition freezes are in effect, the implementation of ancillary fees.

Universities need to cover costs. Student groups don’t want financial status to be a gatekeeper to higher education. The best path to balance is not necessarily evident.

Stanbra and her team do all they can to make the current system work for students.

“Our philosophy is to discuss the whole [debt] cycle with them, including the end result.”

This means not only helping with the technicalities of applications, but also being there to listen.

“All of our staff are very attentive. We understand how hard it can be for people to discuss personal finances, especially when they are experiencing difficulties.”

Most students make it through to their degree with few problems, but some will need extra help. Along with government bursaries and loans, FAAO can suggest alternatives. There are privately funded bursaries and the work-study program for students who are eligible, as well as short-term solutions such as tuition deferrals, bookstore lines of credit and emergency loans.

When financial issues are only one part of a larger problem, Stanbra said, “We also use the whole student services team — Health Services, Counselling and Development — whatever is required.”

There is also help for those who have already have their degrees. The federal Interest Relief program allows graduates to temporarily suspend loan payments if their earnings fall below $1,220 per month.

Fewer than half of those eligible for the program are using it, and Stanbra was just at a national meeting where much of the discussion focused on how to more effectively communicate with students and graduates about available programs. “We’re always looking at what we do, and considering if we can and should be doing something different.”

One thing Stanbra thinks we should do differently is shift how we look at student debt. “There’s a lot of stigma attached to debt in our society,” she said.

But when you consider that university graduates have twice the salary, half the unemployment and make at least $400,000 more in a lifetime than non-graduates, the initial debt “is a great investment. It never depreciates, and it gives you great personal satisfaction. It’s more beneficial than borrowing for a car.”

For more on the Interest Relief program, consult the Financial Aid and Awards Office, LB-085.