According to a BMO 2012 student survey, while the majority (59 per cent) of students are excited about the upcoming school year, the poll showed that paying for school is causing more stress than their academics.
The annual survey, conducted by Pollara, ranked the top sources of stress among post-secondary students, and found one-quarter (27 per cent) are very stressed about paying for school – more so than finding a job after graduation (22 per cent) or achieving success academically (20 per cent).
According to Statistics Canada, the average undergraduate tuition in Canada is $5,366. The total cost for post-secondary education – according to research from the Federal government – including tuition, school supplies, housing and other expenses, amounts to $14,500 a year, or nearly $60,000 for a four-year program.
According to the BMO survey, one-third (32 per cent) say they will have significant trouble paying their bills while at school, while 27 per cent will have just enough money to cover their expenses.
“Despite their level of optimism entering the school year, many students are handling a number of priorities on their own for the first time, including managing their own finances, so it’s no surprise that this can cause some anxiety,” said Lily Capriotti, vice president, BMO Bank of Montreal.
“However, it’s important that students ensure they work with a parent or a financial advisor to put a financial plan in place to help minimize stress during the school year, including finding out about products and resources that are available to them.”
According to the poll, of nearly half (49 per cent) of students using loans to help fund post-secondary expenses:
The majority (58 per cent) expect to graduate with upwards of $20,000 in debt and one in five (21 per cent) expect to owe more than $40,000.
44 per cent expect to pay off their student debt within five years after graduation.
Students in Atlantic Canada expect to accumulate the most debt (25 per cent expect to owe over $40,000), as well as take the longest to pay down their loans (only 30 per cent think they will be able to pay off their debt within five years).
The Canadian Federation of Students notes that average student debt is almost $27,000, and according to the Canada Student Loan Program, most students take nearly 10 years to pay off their loans – with some taking the maximum 14.5 years.
Capriotti noted that students relying on loans should think about their repayment plan long before graduation. “Students often underestimate the amount of debt they will accumulate or the length of time it will take to pay it off.
The Pollara online survey was completed from July 19-26, 2012, with a sample of 1,018 post-secondary students.
