Students in Canada, U.S. face growing debt. Here’s help

Student debt in the U.S. is reaching new heights.

In 2015, student loan debt was $1.2 trillion, compared to $0.2 trillion in 2003, reports the Centre for Retirement Research at Boston College.

Further, U.S. student loan debt now accounts for more than 30% of total household non-mortgage debt, surpassing credit card debt in 2011, notes the study. U.S. grads in 2013 had $31,000 in student debt.

And student debt isn’t a problem in just the U.S. — Canadian post-secondary students also face growing tuition fee costs, which could force them to take out larger loans.

The Canadian Federation of Students warns annual tuition fees could rise to $19,900 in 2035-2036, reports advisor.ca’s Suzanne Sharma. Students may not be thinking about the realities of debt, so advisors should help.

Have frank discussions about what it means to take out a loan. The government may offer your client’s child $10,000 annually, but she doesn’t have to use the whole amount if she only needs $8,000. Explain how blowing that extra $2,000 on pizza each year, for instance, will amount to the costliest pizza she’ll ever have, thanks to interest.

Read more on how you can help.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.