Canadian debt rockets

May 7, 2004

Canadian graduate debt is growing rapidly, according to federal government statistics.

Students who borrow to pay for their education leave university about C$20,000 (£8,260) in debt, according to a Statistics Canada survey, which found that half of graduates from the class of 2000 left owing money.

The survey, confined to students who had not pursued their education beyond a bachelors degree, found that those who graduated in 2000 owed C$19,300, about 30 per cent more than the class of 1995 and 76 per cent more than the class of 1990.

The increases in debt for the class of 2000 mirror the rises in Canadian tuition fees during the 1990s. Average undergraduate tuition fees rose from C$1,185 in 1988-89 to $3,064 in 1998-99. They have since increased to C$4,025.

The study did not survey students on professional programmes such as medicine, dentistry and law, where fees have skyrocketed in provinces that allow universities to set fees.

The study found that a small but notable proportion of graduates left with large debts. One in seven bachelor graduates, about 14 per cent, owed C$25,000 or more in government student loans on graduation.

With government loans insufficient to cover a significant amount of living expenses, one in five students borrowed privately. The survey found that debts of those using both sources averaged C$32,200.

Almost one-quarter of the students in the survey reported difficulty in repaying their loans. But, two years after graduation, one in five graduates had paid off their debt completely.

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