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The State of Student Debt in Canada

By Steve Horton on June 13, 2019 No Comments
Most students graduate with approx $26,000 in student loans. Here is how we can help

Are you dealing with student debt in the midst of the coronavirus? Contending with the virus, student loan payments, and earning cash while distance learning can stress the most resolved student. The COVID-19 pandemic is making Prime Minister Justin Trudeau and the Canadian government roll out various support programs to help the general population and post-secondary students. So while you young people  continue to earn from home to protect the public health at large, take some time to review the available support for students and tips to keep their student debt to a minimum through the coronavirus.

Support for Students in Need

Canada Emergency Student Benefit

According to Canada.ca, Parliament passed the Canada Emergency Student Benefit. The main points:

  • The CESB can grant support to students experiencing financial hardship over the summer due to COVID-19. These students must not be eligible for the Canada Emergency Response Benefit (CERB).
  • Eligible students can receive a flat-payment benefit of $312.50 per week, or $500 per week for eligible students with dependents or with permanent disabilities.
  • The CESB is available from May through August 2020.

Canada Emergency Response Benefit

The Canada Emergency Response Benefit (CERB) provides temporary income support. It’s for those whose personal finances have been impacted by the Coronavirus pandemic. It’s a great way to avoid depleting your emergency fund and savings account. See if you qualify for the CERB.

The Canada Summer Jobs Program

To encourage employers to hire younger workers, the Canada Summer Jobs Program offers wage subsidies to:

  • Employers in the public sector
  • Non-profit organizations
  • Private organizations with 50 or less full-time employees

The idea is to create a quality summer work experience for younger folks between the ages of 15 and 30. Beginning in 2019, the program goes beyond the students exclusively. Anyone between the ages of 15 and 30 may be eligible to participate.

Before the Pandemic Hit

The average post-secondary student in Canada graduates with $26,000 in student related debt, according to Statistics Canada. This debt is incurred from the cost of tuition, rent, and food. All which have been steadily rising. For young Canadians, cost may be a prohibiting factor from entering post-secondary school. The only solution is to borrow to fulfill their educational aspirations.

Statistics Canada also reports that “Among graduates from the Class of 2009-2010 who did not pursue further education, over 40 per cent financed their postsecondary education with some form of loan. This proportion was highest for bachelor graduates at 50 per cent, and lowest for doctoral graduates at 41 per cent.”

Almost every second graduate enters the working world with the heavy weight of student loans. But there is some reprieve through grants, scholarships and low-cost loans. These can help manage the cost of student life and keep debt levels down after graduation.

Ways to find that the cash for post-secondary school

Free cash

There are a number of websites where you can check out scholarships, bursaries and grants available to students. Scholarships Canada  is a one stop shop for students looking for free cash. The organization  claims they have helped distribute more than 99 thousand awards worth more almost $200 million. In the featured scholarships section on their website’s front page, they have ones worth $250 all the way up to $10,000.  Some of the tips they offer to win these scholarships include:

  • Carefully and thoroughly read the application—including the small print.
  • Make sure you qualify for the scholarship: double check the eligibility criteria.
  • Know the deadline and mark it in your calendar.
  • Find out if you need transcripts: originals or copies?
  • Answer all questions.
  • Request your reference letters as soon as possible and provide ample notice.
  • Have a minimum of one reference from outside of school.
  • Have at least one person proofread your application.
  • Keep a copy of the completed application and a note regarding any supporting documents that you submitted with it.
  • Is your application assembled appropriately? Make sure you have followed their guidelines.
  • Mail the application in time for the deadline.

Other sites that help connect students to scholarships and grants are universitystudy.ca and findmyscholarships.com.  Also check at your university of college’s campus offices and the student unions.

Low cost loans

Financial aid is available to students who need money to pay their tuition and living costs. The cheapest option is to apply for a government loan. Government loans for full and part time students are administered through your province or territory. You can apply for loans at both the provincial/territorial level and federal level all in one application. You can also apply for government grants at this time. For government loans there is a 6-month non-repayment period before you have to start making payments. This applies after you finish school, reduce your hours from full-time to part-time, or leave school for any reason. After this period, you must start making payments and your loan is subject to interest rates. You have two interest rate options to choose from. Floating interest rate, prime rate + 2.5 per cent, or fixed interest rate: prime rate + five per cent.

Manage money better

There are proactive solutions for students who don’t want to graduate with too much debt. Adjusting your lifestyle as a student will go a long way. This includes budgeting your entertainment spending. Always living with roommates or sharing a house with other students. Use public transit or a bike to get around. Walking whenever possible to your destination rather than taking UBER or a taxi. Work during the summer months, preferably in a job that will help build your experience. All of the above can will help you raise and save some cash, and get you job-ready for when you graduate.

Build your financial literacy

Almost every university and college offers students personal finance courses. Some may be part of the curriculum, others may include seminars offered throughout the year. When available, attend free classes to help increase your financial literacy. Start learning how to spend better, and save more. These are important lessons that will not only help you save money as a student, but set you up for financial success when you graduate.

Student debt is a growing problem in Canada. With more Canadians taking longer to pay it off than ever before. With some careful planning, you can graduate with minimal loans and a better handle on your finances. If you need assistance when planning, get a free estimate today.

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Steve Horton


Steve Horton is an SEO Specialist at Debt.ca. He's also the co-creator of a graphic novel biography of David Bowie, among many other works.

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