Canadian students deeper in debt

December 18, 1998

Evidence of rapidly growing debt among Canadian students has been confirmed by a survey commissioned by Statistics Canada.

Based on a 15 per cent sample of 1995 university and college graduates, the survey found that in the past 15 years no group of graduates has borrowed as much in government loans.

The average debt for university students was Can$13,300 (Pounds 5,200) - up from the 1982 average of Can$4,800.

Debts are likely to rise even higher, since some of the biggest increases in tuition fees have taken place in the three years since the surveyed class graduated.

A full-time arts graduate in Canada now pays Can$3,199 a year in tuition fees, a 35 per cent increase on 1995.

Compounding those figures are a number of new private institutions as well as the introduction of deregulated programmes in Ontario, where some medical faculties have been charging students as much as Can$7,800 per year.

The study also found increasing difficulties in repayment. One in 20 students defaulted on their loans within two years of graduation. Payback rates have also suffered. In 1990, more than a third of graduates were able to completely pay back their loans, just two years after graduation. But in 1995 slightly fewer than a fifth of graduates were able to repay in full within two years.

The high default figures have been making the institutions that handle the loan programmes somewhat nervous.

Canadian banks, which hand out more than Can$3.1 billion in student loans, called on the government this summer to stop the haemorrhage they say they have suffered from a default rate they claim is much higher.

There is, however, one recent figure, from another study, that points to a slight lightening of the student debtload. Bursaries and scholarships - student funding that does not need to be repaid - have gone up a significant 43 per cent since 1995.

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