The cost of post-secondary education has been steadily increasing in Canada, leaving many graduates with student debt that is becoming much more difficult to pay back. Today’s students face ever growing tuition fees, additional compulsory fees, and residence fees. In fact, the national average undergraduate tuition fee in 2015/2016 was $6,191 with Ontario tipping the scales at $7,868. And this doesn’t factor in the cost of residence and a meal plan per year.
As a result of these costs, it shouldn’t be a surprise that students requiring a Canada Student Loan now graduate with $28,000 in student debt. And while recent changes to OSAP may make it easier for those in need to access more credit, it may also cause some to take on even more student debt.
We’ve seen the impact student debt can have, firsthand in our firm. Based on our 2015 Joe Debtor study, we found that the average student debtor was 36 years old, one in four was a single (lone) parent and 60% are female. The inability to find a job paying enough to allow them to repay their loans and the financial hardship caused by these loans led them to file for insolvency to deal with their student debt.
What can you do if you’re struggling with student debt?
You can try negotiating new payment terms to repay your loans, asking to pay a more affordable monthly amount. Be aware however that this will keep you in debt longer as it extends the length of your loan, making you pay more in interest.
Alternatively, you could see if you qualify for repayment assistance programs. You may qualify for a reduced monthly payment or partial interest relief however there are conditions and you will still be required to repay your loans.
If your student debt seems to be insurmountable and you have been struggling to pay it off for years, consider meeting with a licensed insolvency trustee to discuss student loan forgiveness through a bankruptcy or a consumer proposal. They will be able to walk you through your options, helping you to determine which one is right for you.
Read more about your options in our handy student debt infographic: