Financial realities of a post-secondary education can be overwhelming
As the new Canadian school year approaches, the finances of post-secondary students will be under pressure, as the cost of school adds to cost-of-living challenges.
New research published today (August 14) by education savings and planning company Embark reveals that 82% of students find the financial realities of a post-secondary education to be overwhelming.
With 44% of students who took part in the Leger survey saying they are spending at least three quarters of their total income on their studies, not including the cost of food and living expenses, many are ‘education rich, cash poor.’
Fortunately, the Bank of Mom and Dad is open for the two thirds of respondents who said without their parents’ help they simply would not be able to afford to go to school with 43% saying they would have to drop out. However, even with help 75% said they are finding it hard to make ends meet.
Of all poll participants, more than a quarter have considered dropping out of college due to the financial burden.
The cost of education is set to remain with many Canadians for some time after they leave university, with 48% of students polled currently having, or expecting to have, student debt, and 33% currently having more debt than savings. Longer term, 49% said they were concerned about the impact of their debt on their future.
For around six in ten respondents, going to college was their first real experience of managing their own finances, with 66% saying that it causes anxiety to look at their bank account and 52% choosing to avoid thinking about debt and money.
Almost seven in ten want to know how to improve their finances, but say they are unsure how to.
Trying to cope
To try to keep on top of their finances 64% said they have a part- or full-time job to help pay for school, but the job market is not an easy one for young Canadians currently.
“For those who rely on employment to support their education, this adds another layer of difficulty on top of rising education and living costs,” said Andrew Lo, president & CEO of Embark. “Our survey showed that 68% of post-secondary students wish they had saved more money before starting school, a sentiment that will only grow stronger in our current economic conditions. Students and their parents would benefit from starting education savings early to provide a larger financial cushion in volatile times.”
Respondents said they wish there was more transparency around the costs of post-secondary education and 47% believe they were not provided enough information to make an informed choice about post-secondary education.
“The lack of preparedness of students in choosing their post-secondary education is a shortcoming we all bear. For young Canadians, this is a significant financial and life decision that will impact their futures,” said Lo. “At Embark, we are addressing this by offering more resources to enhance transparency on post-secondary options and related costs, enabling more informed decisions.”
