By Charles Tang
When Susan Vasquez, 24, graduates from her bachelor of nursing program at Humber College in 2017, she will be carrying a student debt of about $80,000.
Although an average salary for a newly graduated nurse in Ontario can reach about $60,000, Vasquez is unsure if she will be able to pay off her debt within her first two years of working.
“I don’t know if I’m able to pay the whole thing, and with interest after the first few months, it will only come up to more.”
As well as food, transportation, and rent, Vasqhas two children to care for. With almost six out of 10 post-secondary students in Canada taking on loans to pay for school, there are many facing difficulties similar to Vasquez’s.
According to a recent Statistics Canada survey, total student debt in Canada increased 24.4 per cent from 2005 to 2012, reaching $28.3 billion in total, or an average of $27,000 per student. Also, tuitions across the nation are rising, at a rate much faster than the inflation. With heavy debt, students like Vasquez are holding off on some milestones in life, such as buying a house, or getting married.
A TD-Canada Trust survey said 40 per cent of students would not buy a house, while 36 per cent said they would not be starting a family. Meanwhile, 18 per cent of those surveyed said they would not move out from their parent’s house until all debts are paid.
“If I don’t have to pay off my debt, I would probably buy a small apartment after working for a few years,” Vasquez said, “but it would not be possible before I first pay them off.”
Meanwhile, student associations are putting pressure on the government to help.
Brandon Sloan, director of communication for the Ontario Undergraduate Student Alliance, said he recognized that huge student debts have long-lasting impact on student life. To address this, the alliance is asking the government to put greater investments into non-repayable financial assistance, such as the Ontario Tuition Grant, which reduces some students’ tuition by 30 per cent.
“We think the government should expand the eligibility of the OTG, to students who are more than four years after finishing high school, aboriginal students and students with dependents, and to expand that reduction to 35 per cent,” Sloan said.
Tyler Epp, director of advocacy, said the alliance is actively negotiating with the government to reduce the cost of education. The group has successfully lobbied to limit the allowable rate of tuition increases to 3 per cent from 5 per cent.
“We are asking to freeze the tuition rate to make it more affordable,” he said.
Despite the difficulties facing recent graduates, Jordann Brown, a blogger behind my-alternate-life.com, a personal finance blog, said it is possible to pay off loans. Within two years of graduation, she paid off her student loan of more than $40,000.
For current students, Brown advised taking as few loans as possible. “A lot of students…take more than what they need. If you take out less, you would spend less money, and it would be easier to pay it back,” she said.
“Once you graduate, start working right away, even if you don’t get your ideal job yet. And in the meantime, still live like a student,” Brown said. “I try to reduce my expenses as much as I can. For example, I moved away from the city to the rural area, and paid less on haircuts.” Brown added she got married on a modest $5000 budget.
“Remember every dollar counts, even if you have only $10 or $15 extra, make a little payment. I paid a lot of these small payments,” she said. Brown also set a goal at the beginning to pay at least $1000 a month. “I couldn’t do that at first, but by the second year, I paid about $1500 a month toward the repayment,” she said.
To earn that money, she blogged and took other freelance jobs on top of working full-time. Brown suggests looking for government assistance as well. For example, she applied and received government relief for about $2000 after fulfilling several requirements, like finishing her degree on time.