Student Loan - Loans and Debt Consolidation

MASTER THE ART OF BUDGETING TO TACKLE STUDENT DEBT

Master the art of budgeting to tackle student debt

Jan 21, 2012 7:00 AM ET | Last Updated: Jan 20, 2012 2:21 PM ET

Michelle Siu/National Post

Shaun Shepherd, University of Toronto student in his final year and facing years of debt when he graduates.

Shaun Shepherd is thinking about attending graduate school after he finishes his undergraduate dual degree in human biology and bioethics. But after five years of school, he s drowning in a sea of student loan debts and isn t sure he should add to the pile.

With tuition costing him as much as his yearly OSAP loan, Mr. Shepherd expects to find himself handcuffed to $22,000 in debt a figure above the $19,000 national average by the time he finishes his undergraduate degree. And he s not happy. The financial assistance system isn t doing what it can to help students, he says.

But Jeffrey Schwartz, executive director at Consolidated Credit Counselling Services of Canada Inc., says students should shoulder some of the responsibility for their indebtedness and poor spending habits.

More than two million Canadian students rely on loans to help fund their education, and nearly a quarter of that group struggles to pay them back after graduation.

A high interest rate on both federal and provincial loans, as much as 8%, is one problem beyond student control. One recent graduate said repaying these loans can be crippling.

I know several people who haven t even been able to pay back the...[more]