Worrying number of Canadian students considering dropping out due to financial struggles
Canadian post-secondary students find the financial realities of paying for education so stressful that an alarming number have considered dropping out.
That’s according to results from a new survey conducted by Leger on behalf of Embark, a Canadian education and savings planning company.
The survey unveiled eye-opening realities for Canadian students and how they are “education rich, but cash poor.”
The poll found that 44% of post-secondary students spend the majority (at least three-quarters) of their total income on funding their education without factoring in food and living expenses.
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Parents also play a big role in students’ ability to pay for their education, as 64% of respondents said they wouldn’t be able to afford schooling if they didn’t receive help from their loved ones.
Debt has many students (41%) thinking they will have to live with their parents for a prolonged period after they’ve graduated.
The financial burden of school also impacts students’ classroom performance, as 39% said their grades were affected by monetary obligations.
Over one in four (26%) said they would consider dropping out of school altogether because of money.
The harsh reality of student debt
Almost half of the students surveyed (48%) said that post-secondary debt will be an inevitable reality for them after graduation.
One in three said they currently have more debt than savings, and 49% admitted they were worried about the future with the amount of debt they are taking on.
According to Embark’s findings, students expecting to graduate with debt think they will be in the hole for over $25,000, and it will take them about 2.8 years to pay off.
However, Statistics Canada’s data paints a much bleaker picture, as it reported the average amount of post-graduation student debt to be $30,600 in 2020.
Cost-of-living crisis hitting students hard
Students are struggling with the everyday costs of life as well. Over half (52%) said they’ve cut out on buying key necessities to make ends meet.
Students are also trying to juggle school with work, as 64% of respondents said they have a part-time or full-time job to help pay for school.
Over three-quarters (76%) admitted that while it was difficult to balance school and work, their job was a “necessity” to offset costs.
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Andrew Lo, president and CEO of Embark, added that with today’s tough job market, students are having a hard time finding employment.
“For those who rely on employment to support their education, this adds another layer of difficulty on top of rising education and living costs,” he said.
According to Canada’s latest Labour Force Survey, the unemployment rate for youth aged 15 to 24 was 14.2% in July, up 0.7 percentage points from the previous month and the highest rate since September 2012.
Everyone is financially overwhelmed
It’s not just students who are feeling uneasy about their finances.
Recent data from Research Co. found that over two in five Canadians (42%) have worried “frequently” or “occasionally” about paying their mortgage or rent.
Over half (51%) said they would rate their own personal finances as “poor” or “very poor.”
The Office of the Superintendent of Bankruptcy (OSB) reported that the number of insolvencies in Canada rose in June 2024 and saw the third-highest peak in filings since the recession.
In June alone, 11,096 insolvencies were filed by consumers across the country.
Are you a student who has been impacted by the cost-of-living crisis? Email us at [email protected], and we may contact you for a story.
With files from Irish Mae Silvestre