September is back-to-school time for most post-secondary students, many of whom will rely on student loans to cover tuition costs and a portion of their living expenses while attending school. In fact, according to the Canadian Federation of Students, students requiring a Canada Student Loan now graduate with an average debt of over $28,000 (Canadian Federation of Students, 2015).
When you consider that the average non-mortgage debt for Canadians is just under $21,000 - causing warning bells to ring across the land – students really do appear to be more vulnerable than anyone (as they’ve been saying all along). But unlike other regular Canadians, who – if they find themselves in trouble – can easily avail themselves of credit counselling, Consumer Proposals and bankruptcy, insolvency regulations that apply to student loans leave students with limited debt relief.
One major pitfall with student loans, compared to regular debt, is that often you don’t realize what you’ve gotten yourself into until you finish your program of studies, which can take years. This is because the student loan repayment period does not begin until six months after you finish school.
I remember the despair and sheer panic I felt when I received my first student loan repayment statement in the mail. The payment itself was equivalent to one half of my rent. The amortization period was 14 years. I had never had an obligation so significant. I actually called my mother and cried because I was scared I would be in debt forever. I am happy to tell you I wasn’t in debt forever – I got through it and you will too.
Luckily for me then, and for students now, there is some help and relief with student debt; however, there are some catches too. If you are concerned about your student debt it doesn’t hurt to talk to someone – such as a Licensed Insolvency Trustee – about the options available. But here is some preliminary information, along with some of my own thoughts on the matter.
There is no question that post-secondary education comes at a high price. There can be a personal, emotional and / or physical price associated with getting through your courses and finishing your program of studies. And, of course, there is the actual price of tuition and living expenses, which can be a significant future burden if any part of that price is financed through student loans, lines of credit and even credit cards.
Whatever you do, stay positive! What may seem like a burden now will get easier in time, as long as you manage your debt in some way – whatever is the right way for you. Know that you are not alone and there is help available to you along the way in your student debt repayment journey. And, of course, congratulations on investing in your future and completing a program of studies, wherever that may take you!
This article was written for MNP Debt. You can access the original post here.