(TORONTO, ON) – Many Canadians think back to their post-secondary education as a memorable time, during which they came of age. But “growing up” is not always enjoyable – today’s college and university students are confronting the adult problem of debt.
A recent survey released by CIBC found that half of Canadian college and university students (51 per cent) must borrow money to fund their education, and forty per cent of students expect to have more than $25,000 in student debt.
Other important findings include:
- Seventy-three per cent of students expect to owe more than $10,000
- The majority of students (73 per cent) with summer jobs won’t make enough money to pay for their college or university costs
- Two-thirds (66 per cent) expect to pay back their debt in five years or less
While it is encouraging that a large number of students appear confident in their ability to service their loans, Consolidated Credit Counseling Services of Canada warns that it takes more than optimism to pay down debt.
“A positive attitude is a great start,” says Jeff Schwartz, executive director of Consolidated Credit. “But getting down to business and managing your debt will take strong planning and even greater discipline.”
Consolidated Credit offers the following money saving tips for college students:
- Soften the blow – You might not be able to pay for your entire school year with your summer job savings, but you’ll be able to make a dent. Save as much as you can and reduce the amount that you will need to borrow.
- Create a budget – Maximize your loan by using it wisely. Identify needs and wants and spend your borrowed money only on the needs. Years later, when you’re looking at your loan balance, you will want to feel reassured that none of it went to a spring break trip to Mexico.
- Live lean – Students are in their early twenties and many don’t have mouths to feed. Take advantage of this time in your life and live frugally. You don’t need a fancy car, in fact you probably don’t need a car at all. There’ll be plenty of monthly bills later in life; try to avoid them now.
- Get a part-time job – Just because the semester has started, doesn’t mean your income has to stop. Your studies are your first priority but getting an evening or weekend job will go a long way in reducing the amount that you need to borrow.
- Apply for bursaries and scholarships – Sure, the applications and paperwork can be daunting, but it’s always worth your time to apply for educational funding. Speak to your school’s Scholarship Office and see what your options are. This is a source of funding that you don’t need to repay. Plus – it’s also a great incentive to keep your grades up.
- Attack the loan – Once you graduate, try to focus on eliminating debt as quickly as possible. Set up automatic monthly payments so you’re never late, and try to go above and beyond the minimum payment. This will help ensure that more of your money will go toward the principal and less toward the interest.
“Post-secondary education is a huge expense and it can be intimidating for young people,” says Jeff Schwartz, executive director of Consolidated Credit. “But it is also a great investment in your future. Keep your finances under control and enjoy the fruits of your labour. “
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Eric Spence, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc.
T: 416-915-7283 ext.1041