A new study from Statistics Canada examines the financial situation of post-secondary graduates who borrowed to finance their education compared with their counterparts who did not borrow:
As tuition fees have risen, more students have relied on student loans to help finance their post-secondary education and debt loads have gone up. This situation in turn has had an impact on individual students' financial positions after graduation.
This study, based on data from three different surveys, found that well over one-half (57%) of the graduating class of 2005 had student loans, up from 49% 10 years earlier. Average student debt on graduation rose from $15,200 to $18,800 during the same decade. Also, the proportion of borrowers who graduated with debt loads of at least $25,000 increased to 27% in 2005 from 17% in 1995.
Among post-secondary graduates, borrowers did not differ significantly from non-borrowers in terms of employment rates, total personal income and the likelihood of having a registered pension plan.
However, borrowers had a significantly lower probability of having savings and investments than non-borrowers. Analysis showed that among post-secondary graduates aged 20 to 45 in 2007, 42% of those who had borrowed money to finance their schooling had savings and investments, compared with 52% of other post-secondary graduates, all other factors being equal.
Borrowers with post-secondary education were less likely to own their homes, and when they did, they were slightly more likely to have a mortgage than non-borrowers with post-secondary education.
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