Student Debt Contributing To More Insolvencies

Graduates are increasingly unable to find a stable job with an income level sufficient to support both student loan repayment and living expenses, leading to an increase in the percentage of insolvent debtors with student debt.

The student debtor has been struggling with debt repayment for several years. They are highly likely to turn to credit cards and payday loans to keep up.

Student Debt A Problem but Mostly for Women

Student debt has been a growing concern for many years. As the number of graduates with student loans has increased, so too has student debt driven the number of insolvencies. In our current study, 15% of all insolvent debtors carry a student loan, up from 13% in our previous two studies. For those carrying a student loan, the average student debt has increased to $13,851 in 2017.

In addition to carrying more student loans, the average insolvent student debtor is getting younger. The average student debtor was 35.4 years old in our 2017 study, compared to 35.7 two years earlier and 35.9 years in our 2013 study.

Even more concerning, overwhelming student debt is primarily a problem for women. In 2017, 62% of student debtors were female, up from 60% two years earlier and just 57% in our 2013 study.

Student Debtor 2015-2016 2013-2014
% of all debtors 15% 13%
Student debt $13,851 $13,818
Average age 35.4 35.7
% female 62% 60%
% using payday loans 37% 26%

The female student debtor is struggling with higher student debt than her male cohort. Jane Student Debtor owes an average of $14,328 in student debt, 10% more than the average male debtor with student loans.

Jane Student Debtor’s income level, at $2,282, is roughly comparable to that of male student debtors ($2,298); however, female student debtors are much more likely to be unemployed. Whereas 88% of male student debtors were employed at the time of their insolvency filing, only 80% of female student debtors were employed when they filed. She is much more likely to be out of work for other reasons including maternity leave and child care, affecting her ability to maintain a stable income source.

Student Debtor Female Male
Average student debt $14,328 $13,071
Average debtor income $2,282 $2,298
% employed 80% 88%
% with dependant(s) 55% 34%
% lone-parents 35% 4%

It is this susceptibility to having an intermittent income level that makes it difficult for Jane Student Debtor to keep up with her student loan repayments. Consequently, she has a higher student debt level, across almost all age groups, than do male student debtors.

In general, the student debtor is unable to find a stable job with an income level sufficient to both repay their student debt and raise a family, and this is experienced much more acutely among women.

Adding to her financial pressures, Jane Student Debtor is also much more likely to have a dependant. While 34% of male student debtors have at least one dependant, this increased to 55% for female student debtors. Jane Student Debtor is also nine times more likely to be a single parent: 35% of female student debtors were lone-parents compared to just 4% of male student debtors.

student debt and bankruptcy

Personal Information
Male 38%
Female 62%
Average age 35
Marital status
Married or Common-law 31%
Divorced or Separated 19%
Widowed 1%
Single 50%
Average family size 2.2 (including debtor)
Likelihood of having dependent 47%
Average monthly income $2,288 net of deductions
Total unsecured debt $46,734
Unsecured debt-to-income ratio 170%
Likelihood they own a home 8%
Average mortgage value $194,074
Detailed Information on the amount of average unsecured debt:
Personal loans $12,621
Credit cards $10,458
Taxes $4,722
Student loans $13,851
Other $5,082