Paying for school is rated as the #1 source of stress by Canadian post-secondary students, according to a survey conducted by BMO Bank of Montreal and Pollara in the summer of 2012. More than a quarter of the students surveyed (27 per cent) indicated they were very stressed about finances. By comparison, 22 per cent of students said they were stressed about finding a job after graduation, and 20 per cent about their academic achievements. Citing Government of Canada studies, BMO indicates that “the total cost for post-secondary education […] including tuition, school supplies, housing and other expenses, amounts to $14,500 a year, or nearly $60,000 for a four-year program.”
A 2011 survey by BMO and Leger Marketing also found that a majority of Canadians – students (54 per cent) and parents (65 per cent) – agreed that the cost for post-secondary education should be split between parents and kids. Over half of the parents surveyed saw as their responsibility to cover between a quarter and half of their children’ post-secondary education. 43 per cent of students agreed with this position.
Fifty-one per cent of parents said they were prepared to go into debt to fund their children’s education, while 40 per cent were not. “Attending university or college is a hefty investment, so it’s essential that students and parents are on the same page when it comes to funding a post-secondary education,” said Su McVey, BMO Vice President, in September 2011.
The 2012 BMO survey found that one third (32 per cent) of the students thought they would have significant trouble paying their bills while at school. Almost half (49 per cent) use loans to help cover their expenses during post-secondary education.
Of those using loans, 58 per cent expect to graduate with more than $20,000 in debt, while 21 per cent expect to owe twice as much, according to the 2012 BMO study. Students in Atlantic Canada expect to accumulate the most debt and take the longest to repay it. The study doesn’t include information on international students in Canada.
Citing the Canadian Federation of Students and the Canada Student Loan Program, BMO indicates that “the average student debt is almost $27,000 and […] most students take nearly 10 years to pay off their loans – with some taking the maximum 14.5 years.” Lily Capriotti, BMO Vice President, pointed out that “students often underestimate the amount of debt they will accumulate or the length of time it will take to pay it off.”
While some students may ask themselves if loans are worth the trouble – or if it’s rather preferable to get a job or become an entrepreneur right after graduating high school – in most cases the money spent will yield a good return on investment. Also, from a non-financial perspective a university education is one of those key things that form an adult person and give them the confidence they need to succeed in life. Of course, most of us want to pay less for valuable things, but at the end of the day – as the saying goes – there’s no such thing as a free lunch.
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