A down payment on a house, a solid credit rating, four trips around Europe, or a university education? Choose, because you likely won’t be able to do it all on your own, at least not in your twenties.
The average Ontario student graduates with more than $28,000 in student debt according to the Canadian University Survey Consortium.
If you worked 40-hour work weeks at minimum wage, it would take you 64 weeks to earn enough to pay off your debt. That’s not factoring in any other cost of living. The rest would take years to pay off.
Bilan Arte, national chairperson for the Canadian Federation of Students, said close to 200,000 students were unable to make a payment on their student loan in the last academic year.
“Tuition fees are regulated at a provincial level,” Arte said. “Some provinces do it better than others.”
She added that Newfoundland and Labrador has had a tuition freeze for a decade, allowing tuition to stay at the average of $2,743 dollars. This has lowered the province’s student debt exponentially.
The regulation of tuition fee prices may be in the province’s hands, but the regulation of student loans doesn’t have to be.
In a recent press release, the Green Party said if elected, they would enact a new student loan system which would have one-time charges instead of constant interest charges.
It would also monitor each person’s annual income to determine their payment schedule. This new system would make student loans more manageable, but it would not change the cost of tuition.
In 1972, the average cost of tuition was $2,351, according to a Policy Alternatives news release. In the statement, they said tuition rose to an average of $2,607 in 1990, and then flew up to a whopping $6,640 in 2012 for Ontario students.
They also wrote that in 1990, a family putting a child through university used 93 per cent of their disposable income. In 2012, it cost a family 150 per cent of their disposable income.
Arte noted the strongest economies in the world, such as Germany, have no tuition fees.
Having high tuition fees and therefore high student debt “makes it difficult for students to contribute to the economy,” Arte said.
Countries such as Germany, who have free post-secondary school, see schooling as an “investment in a generation,” Arte said.
Erika Shaker, the lead researcher on tuition research at the Canadian Centre for Policy Alternatives, said she agrees with Arte.
“We can all benefit, not just financially, but socially, by investing in post-secondary education. And a major way to do that is to recognize that when we graduate an indebted generation, we’re just looking at a lot of wasted potential,” Shaker said.
A university education does not only benefit the student, it benefits society as a whole, Shaker said.
People with a university education are “more likely to vote, more likely to be engaged in their communities, they have better health rates, they’re more likely to be involved as parents in their kids’ lives. These are tremendous benefits that help everybody,” Shaker said.
Tuition does not necessarily have to be as high as it is here in Ontario. Newfoundland and Labrador rolled back their tuition rates 25 per cent in the early 2000s, Shaker said, and then they froze tuition rates. Newfoundland and Labrador now has the lowest provincial tuition rates in Canada.
“Economy in the province was not booming,” Shaker said.
“It was done deliberately to address the issue of poverty in the province.”
Newfoundland and Labrador had a $8.3 billion net debt in 2013, according to Newfoundland and Labrador’s financial statements. Ontario had a $272.1 billion net debt in 2014, according to the Ontario Financing Authority bulletin.
Lower tuition rates do not equal a less stable economy. Newfoundland and Labrador is a smaller province than Ontario, but the difference between Newfoundland and Labrador and Ontario’s net debt is vast.
Arte said in Canada, more than 70 per cent of jobs today require some form of post-secondary education. She went on to say the unemployment level of students is double the national average.
It’s no wonder students are missing loan payments.
“Tuition is set by the university,” Shaker said. “Although, the province will determine the degree, the fees can increase or decrease.”
The provincial government is in control of funding for post-secondary education. They can also control any freezes in tuition rates, as well as the amount schools can increase or decrease tuition every year.
Some programs can be exempt from any of those policies, Arte said.
“People have a skewed reality when it comes to those jobs,” she said, referring to jobs such as lawyers, doctors, or dentists.
People think those degrees lead to a more stable career, but they don’t necessarily, Arte said. It is socially acceptable for degrees in law or medicine to be more expensive because society thinks those people will make more post-graduation.
Arte said people think if you go to law school, you’re guaranteed to get a high-paying job.
“But that’s not the case,” Arte said. “Student debt, at a federal level alone, is close to $17 billion.”
And that is not including provincial loans and bank loans.
“It’s going to take decades at this point to pay back the student debt we owe,” Arte said.
