There are over 100 universities and colleges in Canada for students to pursue higher education. These educational institutions offer over 15,000 different programs of study for undergraduate, graduate, doctorate degrees, and certificates and diplomas. But, post-secondary school tuition isn’t cheap.
Many Canadians take out student loans from the federal government, provincial governments, private lenders, and banks to cover tuition fees. Unfortunately, many student loan borrowers still struggle to pay off their debt, even years after graduation. COVID-19 enhanced those struggles, with the 355,000 jobs lost in Canada last year and disproportionate financial effects of COVID-19 for younger Canadians.
Here we’ll discuss everything you need to know about student loan debt, including the cost of education in Canada, student loan debt compared to other forms of debt, student loan debt forgiveness, and more.
Post-secondary education in Canada is generally cheaper than in the United States. On average, the cost of post-secondary education for Canadian students is $ per year. Students who live with their parents spend less, about $9,300 per year. However, students who live in school dorms or rental apartments spend almost $20,000 per year.
These averages consider the cost of tuition, transportation, groceries, entertainment, books, supplies, rent, and extra-curricular. And, international students usually face higher fees for housing and tuition than local students. Generally, post-secondary education costs depend on many factors, including:
- The school
- Degree type
- Credit requirements
- Living expenses
Tuition fees vary depending on a student’s program of study. For example, professional programs like dentistry, medicine, law, and pharmacy usually cost more than programs in the arts. And, master’s programs are usually more costly per year than undergraduate programs.
The Federal government paused the interest period for student loans as a COVID-19 relief measure. So, graduated students don’t have to begin repaying their student loans until 6 months after graduation. Student loans also don’t begin accruing interest until after the 6-month mark.
Canadian Student Loan Interest Suspension Update
- Starting from , Canada’s Government has suspended the accumulation of interest on Canadian student loans until .Read more here.
Student loans automatically have floating interest rates, also known as variable rates. These interest rates move up and down with the market. However, students can change their floating visit the website here rate to a fixed rate during their repayment period. Borrowers are responsible for making monthly payments, which increase depending on the interest rate of the loan.
How do student loans affect loan debt in Canada?
Most university students graduate with student loan debt. The average student loan debt for both Bachelor’s and Master’s graduates is about $28,000.
Student loans make up a significant portion of the average Canadian’s debt. The average student debtor owes about $46,000 in debt, with almost $15,000 of that debt in student loans. That’s almost a third of someone’s entire debts.
Debt load is higher for students in Ontario, with $2,301.5 million in student loans for both part-time and full-time students. Graduates in Alberta also face high student loan debt, with $503.3 million in Canada Student loans.
Can I declare bankruptcy to get out of student loan debt?
If you’re struggling to keep up with your student loan payments, you’re not alone. The average debtor owes over $14,000 in student loans. While many see bankruptcy as a last result of unmanageable debt, the rules are different for student loans.
If you successfully declare bankruptcy, you won’t have to continue paying many of your debts, except for your student loan debt. Your student loan debt is ineligible unless it’s been at least 7 years since your last day as a full-time or part-time student.