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Canadian Student Debt Growing Fast, But U.S. Is Much Worse Off

Canadian Student Debt Growing Fast, But U.S. Is Much Worse Off.

student debt canada

Student debt in Canada has soared in recent years, highlighting growing concerns that post-secondary education in becoming increasingly inaccessible.

But Canadian students can at least take some solace in this: The situation is much worse in the U.S.

According to Statistics Canada’s Survey of Financial Security, released last week, student debt grew 44.1 per cent from 1999 to 2012, or 24.4 per cent between 2005 and 2012.

In all, one in eight Canadian families are carrying student debt, with a median value of about $10,000, StatsCan reported. There was a total $28.3 billion in outstanding student debt in 2012, the survey found.

Yet Canadian students’ debt burden “pales in comparison with the U.S.,” writes BMO economist Sal Guatieri, noting that south of the border, student debt grew 110 per cent between 2005 and 2012, to almost $1 trillion.

The situation in the U.S. has grown so extreme that some experts are calling student debt the next economic bubble.

All the same, Canadian students are seeing their financial obligations grow faster than income. According to a study from the Canadian Centre for Polilcy Alternatives, released last fall, the costs of a post-secondary education — including tuition and compulsory fees — have tripled since 1990.

The CCPA forecasts that costs will rise another 13 per cent by the 2016-2017 student year. Ontario has the highest fees, at $8,403 on average last fall, rising to $9,517 by 2016-17. Newfoundland has the lowest. Its average of $2,872 last fall will barely rise, to $2,886, by 2016-17.

study last year from TD Bank found students are increasingly delaying major life milestones due to the rising costs of education, with the situation being made worse by a sluggish post-recession job market. That survey found average debt load sits at around $27,000.

Tuition hikes were at the heart of the Quebec student protests in the spring of 2012. The CCPA projects Quebec’s average tuition will hit $3,759 by 2016-17, low when compared to most provinces, but a nearly three-fold increase since 1990-91.

But to BMO’s Guatieri, the relatively better position of Canadian students, compared to U.S. ones, is good news for the economy.

Canadian students “could be in a better financial position to buy automobiles and homes than their American counterparts,” he wrote.

1 Comment

  1. My comment:
    A good question would be: will Canadian student debt become a bubble waiting to pop as the US one has? With over $1 Trillion (that’s with a T) in US student debt and little prospects in the way of economic recovery or jobs (despite the ongoing propaganda to the contrary), it is only a matter of time before US student debt ripples through the US economy in a way similar to the subprime mortgage crisis in 2007-2008, and perhaps even has greater repurcussions.
    Regardless, more and more postsecondary education is being seen as unnecessary. Why spend 3+ years and tens of thousands of dollars when the vast majority of job opportunities garner minimum wage? For many graduates of postsecondary education, public service used to be the means to an end but that option will soon implode as well as government debt piles up and eats into public service expenditures (except of course for those at the top of the pyramid).
    There is no easy solution to this. It’s what happens as a result of overshooting the carrying capacity of the planet and the economy begins to collapse…Peak Oil anyone?

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