Aside from student debt, adult graduates regret financial choices they made in university
Many Canadian adults can relate to the problem of student debt, and a new study has revealed just how long-term and wide-ranging its financial impact can be.
According to a poll conducted by BDO Canada, two thirds of Canadian adults under 40 had just over $22,000 in debt when they earned their diploma. What’s more, 62% are still not done paying them off.
The amount of leftover debt varied among respondents, with 33% owing up to $10,000, 11% owing $10,0001-$20,000, 14% owing $20,0001-$50,000, and 3% owing more than $50,000.
Respondents were also variedly confident in their ability to pay. Just 10% estimated they’ll need less than a year to be debt-free, and 18% said they’d need 10 to 20 years more. On average, respondents who still carried student debt said they’d live with it for another 4.8 years.
That burden has affected their budget for lifestyle expenses. Fifty-three per cent reported cutting back on small luxuries like clothes, gym memberships, and dinners out, while 46% scaled down on living expenses such as internet service, cell phones, or groceries. Forty-four per cent have forgone vacations or cut back on them, and 26% say they’ve lived at home to keep costs down.
Student debt has also caused respondents to delay major financial goals and milestones. Fifty-five per cent had to put off building their emergency fund. For 46%, it was buying a house; 45% said they aren’t saving enough for retirement. Other personal milestones were also affected, like having children (24%), getting married (21%), and working in their chosen field (16%).
The respondents expressed many regrets over choices they made as students, including not managing their expenses through a budget (30%), working more hours at a side job (28%), and taking on other debts like credit-card debts or car loans (25%).
Half of the graduates polled said students today should be ready to make sacrifices such as looking for part-time or summer jobs even in high school. Thirty-nine per cent even recommended that fresh high school graduates spend a year or two working and saving before getting their post-secondary education.
"We were surprised to see so many Canadians carrying student debt well into their 30s," said BDO Canada President Doug Jones. “We've seen that student debt can delay some of life's milestones, like getting married, buying a home or saving for retirement, and with interest rates rising again, those student debts could take even longer to pay off.”
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According to a poll conducted by BDO Canada, two thirds of Canadian adults under 40 had just over $22,000 in debt when they earned their diploma. What’s more, 62% are still not done paying them off.
The amount of leftover debt varied among respondents, with 33% owing up to $10,000, 11% owing $10,0001-$20,000, 14% owing $20,0001-$50,000, and 3% owing more than $50,000.
Respondents were also variedly confident in their ability to pay. Just 10% estimated they’ll need less than a year to be debt-free, and 18% said they’d need 10 to 20 years more. On average, respondents who still carried student debt said they’d live with it for another 4.8 years.
That burden has affected their budget for lifestyle expenses. Fifty-three per cent reported cutting back on small luxuries like clothes, gym memberships, and dinners out, while 46% scaled down on living expenses such as internet service, cell phones, or groceries. Forty-four per cent have forgone vacations or cut back on them, and 26% say they’ve lived at home to keep costs down.
Student debt has also caused respondents to delay major financial goals and milestones. Fifty-five per cent had to put off building their emergency fund. For 46%, it was buying a house; 45% said they aren’t saving enough for retirement. Other personal milestones were also affected, like having children (24%), getting married (21%), and working in their chosen field (16%).
The respondents expressed many regrets over choices they made as students, including not managing their expenses through a budget (30%), working more hours at a side job (28%), and taking on other debts like credit-card debts or car loans (25%).
Half of the graduates polled said students today should be ready to make sacrifices such as looking for part-time or summer jobs even in high school. Thirty-nine per cent even recommended that fresh high school graduates spend a year or two working and saving before getting their post-secondary education.
"We were surprised to see so many Canadians carrying student debt well into their 30s," said BDO Canada President Doug Jones. “We've seen that student debt can delay some of life's milestones, like getting married, buying a home or saving for retirement, and with interest rates rising again, those student debts could take even longer to pay off.”
For more of Wealth Professional's latest industry news, click here.
Related stories:
Debt-saddled students expecting to double down
Parents missing prospects in preparing education fund: study
