the briefing room

…More than two million Canadian students rely on loans to help fund their education, and nearly a quarter of that group struggles to pay them back after graduation.

A high interest rate on both federal and provincial loans, as much as 8%, is one problem beyond student control. One recent graduate said repaying these loans can be crippling.

“I know several people who haven’t even been able to pay back their loans until after they have been married — imagine what a burden that must be. Not only are you dealing with supporting yourself, but also your new family and trying to pay back a loan that keeps getting bigger because of the interest. It is a huge disadvantage coming right out of university.”

With collective nationwide student loan debt at a whopping $15-billion, Mr. Schwartz and other non-profit credit counselling services are keeping their doors wide open to debt-ridden students who need a whirlwind education in financial management. Or if students are too shy to venture into an office, they can access quick tips online to help them control their spending

“We want to see students get through the educational process,” Mr. Shwartz says, explaining he encourages young people to continue with their schooling despite their growing debts.

About 60% of students borrowing money study in Ontario, he says. These students are saddled with the highest fees, forking out close to $6,640 per year. In response to recent 5.1% tuition hikes, Ontario premier Dalton McGuinty introduced a 30% tuition rebate or the equivalent of $1,600, this January.

Even though undergraduate tuition fees in schools throughout the country have more than doubled from 1985-2005, rising from 14% to 30% and continuing to increase dramatically, Mr. Schwartz believes students have plenty of options for financial assistance.

What students need to master, Mr. Schwartz says, is the art of budgeting. Many young people are used to having a support system, and are shocked when they have to start managing their own money after they graduate…

(Source: business.financialpost.com)