Canadian students uneasy about financial life after grad
This week, CIBC released figures showing that the majority of students (56 per cent) are looking to their financial future with fear – 37 per cent are unsure if they will be able to support themselves after grad, while 19 per cent are certain that they will not.
Other important findings include:
- Thirty-six per cent of students expect to owe more than $25,000 by the time they complete their education.
- Students expect parents will cover 22 per cent of costs, down from 33 per cent in a similar CIBC poll from last year.
- Most students (54 per cent) expect to spend $10,000 to $30,000 per school year, with only a third (34 per cent) of education expenses expected to be covered by personal funds from employment.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, shares the concern.
“Graduating with that much student debt is a tough way to embark on a career in the work force,” says Schwartz. “Students feel like they’re starting way behind the finish line – that kind of money would make for good down payment on a house in a lot of markets.”
But while Schwartz has sympathy for today’s students, he hopes that their worry will lead to action.
“People of all ages fall into a buy-now-pay-later trap and ignore the future,” says Schwartz. “By worrying about tomorrow, students may be able to find the motivation to take positive action today.”
Schwartz and the team at Consolidated Credit have put together the following tips to help students take back some control over their financial future:
Minimize the damage – You might not be able to pay for all of your expenses, but the survey suggests the average student can cover a third of their costs, and that is a solid dent. Every dollar you save from your summer job is one less dollar that you will need to borrow.
Create a budget – Use borrowed money wisely. Identify needs and wants and spend your student loan only on the needs. You might feel like blowing some of your loan at the campus pub today, but you will not enjoy repaying that money, with interest, ten years down the road. Talk about a hangover!
Live lean – Most students do not have mouths to feed. Take advantage of this time in your life and live frugally. You should be able to get by on a shoestring budget. There’ll be plenty of financial demands later in life; try to avoid them now.
Get a part-time job – Your studies are your first priority, but getting an evening or weekend job will put extra money in your pocket. A part-time job will also give you valuable work experience that can help improve your earning power in the future.
Apply for bursaries and scholarships – The paperwork can be daunting, but it’s always worth your time to apply for educational funding. This is money that you don’t need to repay. Websites like Yconic.com can do some of the work for you by matching you with scholarships that fit your profile.
“Study after study shows that education is a great investment,” adds Schwartz. “The dollar amount may be intimidating, but if you do what you can to minimize your spending, you will be happy that you went through with it.”
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: