TORONTO, ON – According to a recent BMO poll, 58 per cent of post secondary students who borrow to pay for their education expect to graduate with close to $20,000 in debt, while another 21 per cent expect to owe more than $40,000.
With increasingly more Canadians graduating from the school of debt, it is no wonder that the biggest stress facing students today is how they are going to pay for their post secondary education.
“Many students have very little exposure to financial planning before heading off to college or university,” said Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada. “Combine that lack of budgeting skills with a limited income and the countless credit cards students are offered, and you have a recipe for disaster. Upon graduation, the debt seems insurmountable.”
Schwartz encourages parents to sit down with their kids before they even start applying to universities and talk about a how they are going to plan to pay for school. Adding, “It’s an excellent opportunity to engage your children in an open conversation about finances so they are prepared for the journey ahead.”
Effective budgeting, smart credit use and realistically evaluating education options can all help reduce the financial stress students are facing. Before making any decisions about student loan options, Consolidated Credit Counseling Services of Canada, Inc. recommends:
- Calculating the cost of your expected student loan payments before your borrow and compare them to the salary you realistically expect to earn when you graduate.
- Look for student loan options that offer flexible interest relief, debt reduction or disability benefits;
- Evaluate the costs associated with going away to school vs. going to a local college or university; and
- Consider working full or part-time while taking part-time studies to help ease the debt load upon graduation.
For more information on money management techniques for students, download Consolidated Credit Counseling Services of Canada’s booklet, Budgeting 101: Your Money Guide for Getting Through School.