Two-thirds of Canadians under 40 with a degree or diploma say they graduated with student debt, owing just over $22,000, finds a BDO Canada survey. Further, 62% of them are still paying off debt and expect they’ll need another five years to become debt-free.
Canadian grads expressed other regrets, including taking on other forms of debt, like credit cards or a car loan, when they were in school, and not working more hours while in university.
Advice to future students
Half of graduates say those planning to attend college or university should be willing to make financial sacrifices while in school, and recommend they start looking for a part-time or summer job in high school. And 39% suggest that high school grads spend a year or two after high school working and saving for their post-secondary studies.
Nearly one-quarter of grads have taken a job outside their chosen field to help pay off debt, 20% have used a Repayment Assistance Plan from the government, and 19% have taken on another job in addition to working full time.
“We were surprised to see so many Canadians carrying student debt well into their 30s,” says Doug Jones, president of BDO Canada Ltd. “And with interest rates rising again, those student debts could take even longer to pay off.”
Most who are still paying off student debt say it will take them another 4.8 years, on average. Just 10% think they’ll need less than a year to clear their debt, and 18% say 10 to 20 years.
Here are some additional findings about the grads who have student debt:
- A breakdown of what they owe: 33% owe up to $10,000; 11% owe between $10,001 and $20,000; 14% owe between $20,001 and $50,000; and 3% owe more than $50,000.
- They’ve had to scale back: 53% cut back on things like clothing, gym memberships or dining out; 46% reduced living expenses on internet service, cell phones or groceries; 44% cut back on vacations or avoided taking them; 26% lived at home to keep costs down; and 14% used cash to pay for everything.
- They’ve had to delay life goals: 46% delayed a home purchase; 45% don’t have enough for retirement; 24% delayed having children; 21% delayed marriage; and 16% delayed working in their chosen field.
About the survey: The Ipsos poll was conducted between August 16 and August 31, on behalf of BDO. A sample of 2,212 Canadians aged 21-39 with a completed college diploma or university degree was interviewed online.