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Student Debt in Canada Statistics 2023

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In recent years, talk of a Canadian student debt crisis has been getting louder. When we look at the numbers, it isn’t hard to see why. With the average student debt balance increasing more than $1,000 from 2021 to 2022, student debt in Canada is accumulating at a growing pace. But just how much student debt is there in Canada?

In this article we’ll cover the average amount of student debt in Canada over the last 10 years, the financial aid that is currently available, and the wider impact of student loans.

On this page, we’ll cover:

  • Student debt in Canada
  • Average student loan debt in Canada
  • Increased tuition fees
  • Rising interest rates
  • Student loan debt forgiveness in Canada
  • Provincial debt forgiveness
  • Student debt relief in Canada
  • Repayment Assistance Plan
  • Effects of the student debt crisis in Canada
  • Decreased mental health and well-being
  • Difficulty getting a mortgage
  • Effect on career choices
  • Political economy of student debt in Canada
  • Alternatives to student debt
  • Scholarships, grants, and bursaries in Canada
  • Part-time jobs and work-study programs
  • Co-op programs and internships
  • Tips for managing student debt

Student debt in Canada

Through Employment and Social Development Canada (ESDC), the Canada Student Financial Assistance (CSFA) Program delivers grants and loans from the Government of Canada.

The latest data from the Canada Student Financial Assistance (CSFA) Program shows that through 2021 to 2022, student debt in Canada grew to $23.5 billion. From 2020 to 2021 that figure was $23.3 billion, which means that the total amount of federal student debt in Canada increased by more than half a million dollars per day.

How does Canada stack up to other countries when it comes to student loan debts? The latest figures from the U.S. Federal Reserve show a total student loan debt of around US$1.76 trillion. This figure is incomparably greater than Canada’s total student debt. In the U.K., figures from the House of Commons earlier this year marked total government student debt at £206 billion, or approximately $340 billion CAD — still higher than Canada.

While Canada’s average student loan debt is growing year over year, the total value of outstanding student loans is far greater in both the U.S. and the U.K.

Average student loan debt in Canada

According to the CSFA Program, the average student debt in Canada for those graduating in 2022 was $15,578, an increase of more than $1,000 from the previous year. The same report also shows that 1.9 million students are responsible for the country’s total student debt amount of $23.5 billion.

These numbers only cover student debt from federal government loans. The Canadian Federation of Students, however, estimates that provincial and private bank loans could be responsible for another $5 to $8 billion of student debts. Considering that, the current estimates of total Canadian student debt could easily reach $30 billion or more.

Average student debt in Canada over the last 10 years

Year Average debt (CAD)
2022 $15,578
2021 $14,418
2020 $13,549
2019 $13,367
2018 $13,416
2017 $13,456
2016 $13,306
2015 $12,783
2014 $12,480
2013 $12,314
Average student debt in Canada graph

The increasing cost of student expenses is one factor contributing to the growth of student debt. Tuition fees, accommodation, groceries, and other basic living expenses are simply more costly today due to rampant inflation.

Increased tuition fees

In recent years, Canadian students have seen the average cost of tuition rise. For the 2021 to 2022 school year, students enrolled in full-time undergraduate courses saw a 1.7% increase from the previous year. In the most recent academic year, this number rose another 2.6%, leaving the average full-time undergraduate tuition costs at $6,834.

Graduate students saw an average tuition cost of $7,437 in Canada for the 2022 to 2023 academic year, up 1.7% from the year prior.

Average tuition fees by province graph, part of student debt in Canada

Rising interest rates

Interest rate hikes are another part of the problem. Rates have increased significantly since pre-pandemic, leaving many students faced with higher repayments than they would have budgeted for initially.

The current overnight interest rate is at 5.00%, up from 3.25% this time last year. Canadian banks will adjust their Prime rate in accordance with any changes to the Bank of Canada’s overnight rate. Both federal and provincial student loan interest rates are based on the Prime rates at Canada’s big five banks, so these increases directly impact student loan repayments.

As of April 1, 2023, the Government of Canada permanently eliminated interest on federal student loans, but any interest accrued before that date still has to be repaid.

Student loan debt forgiveness in Canada

Debt forgiveness is an option for eligible students, allowing them to receive financial assistance when paying off their student loan debt.

Federal student loan forgiveness is available to eligible family doctors and nurses, while provincial loan programs are less exclusive. In the 2021-2022 academic year, the federal government forgave a total of $25 million worth of Canada Student Loans, according to the CSFA statistical review for that year.

Here are the basic eligibility requirements for federal loan forgiveness in Canada:

  • Have a Canada Student Loan in good financial standing (i.e. no missed payments).
  • Be employed (part-time, full-time, or casual) as a medical professional in an under-served or remote region with a lack of proper healthcare (starting on or after July 1, 2011).
  • Have been employed for at least one consecutive year in an under-served or remote community (unless you’re a resident in family medicine), and provided at least 400 hours of in-person service.

How much debt forgiveness you’re eligible for depends on your profession. Doctors and residents in family medicine can qualify for up to $40,000 in loan forgiveness over a maximum of five years, while nurses and nurse practitioners can qualify for up to $20,000 in forgiveness.

You can apply for Canada Student Loan forgiveness by downloading the form found online and mailing in your completed application.

Provincial debt forgiveness

If you’re not eligible for federal loan forgiveness, the good news is that a handful of provincial governments also offer loan forgiveness.

British Columbia, Quebec, Saskatchewan, P.E.I., and Nova Scotia all currently have student loan forgiveness programs, none of which are exclusive to medical professionals. The levels of funding available through these provincial programs varies, and of course applies exclusively to provincial student loans.

In B.C., for example, eligible students can receive an annual reduction of up to 20% on their provincial debt, for up to five years. In P.E.I., you can receive up to $3,500 per year in loan forgiveness grants. And Quebec offers a Loan Remission program that will forgive 15% of total debt once you complete your full-time studies within a maximum period.

You can apply for provincial student loan forgiveness through the relevant provincial authorities.

Student debt relief in Canada

For those struggling to manage their student loan repayments, debt relief can provide a lifeline and help you avoid long-term damage to your credit score. Student loan debt relief in Canada comes primarily in the form of the government’s Repayment Assistance Plan (RAP), or RAP-D for borrowers living with disabilities.

You can also change your repayment plan to reduce your loan payments or extend the repayment period online at the National Student Loans Service Centre (NSLSC).

Repayment Assistance Plan

The Repayment Assistance Plan is means tested and designed to help those who can’t afford to make their monthly payments. Depending on your income, you may qualify for a reduction or complete elimination of repayments.

There are two ways RAP helps students manage their loan repayments. First, the Government of Canada will pay any interest owing on your federal loan that your reduced payment does not cover. It will also begin paying down both the principal and any remaining interest after 60 months of RAP, or 10 years after you finish your program.

You can apply for RAP or RAP-D as soon as you begin repaying your government student loans through the portal at NSLSC. Eligibility is evaluated every six months, so you’ll have to reapply if you need sustained assistance with your student loan payments.

Effects of the student debt crisis in Canada

Decreased mental health and well-being

According to a survey by the Canadian University Survey Consortium, 46% of graduating students in 2021 finished school in some form of debt, and 42% graduated with government student loan debt, specifically. With inflation and youth unemployment levels currently higher than usual, the mental and financial pressure on Canada’s recent postsecondary graduates has never been more intense.

Statistics Canada also reported in 2020 that concerns around student debt during the pandemic likely contributed to a decline in mental health and increased substance abuse in young people. Debt repayment also slowed for some graduates during this time, so many may now be years behind on their balances.

Difficulty getting a mortgage

You can still qualify for a mortgage if you’ve got student debt, but it could be much harder to do so. According to RE/MAX, there are two ways student debt affects your ability to get a mortgage:

  1. The debt you have will directly affect your mortgage affordability, which is how much you can borrow based on current income, debt, and living expenses.
  2. Late or missed payments on your student loan debt will lower your credit score, which is another primary factor lenders use when considering your suitability for a mortgage. So anything you can do to start rebuilding your credit score now can help.

Effect on career choices

According to the Canadian Federation of Students, debt can have a direct influence on career choice, even dissuading students from entrepreneurship. Its data suggests that medical and law student loan borrowers tend to choose jobs in high-paying fields or regions that may not be their first choice in order to help pay off student debt.

The pressures of carrying student debt can also push medical students away from public service jobs. This is partly why Canada launched a federal student loan forgiveness program for family doctors and nurses who work in under-served communities.

Political economy of student debt in Canada

There is currently no universal student loan debt forgiveness in Canada, and that looks unlikely to change anytime soon. As we’ve seen in the U.S. this year, even strong attempts to push through student loan erasure are far from straightforward.

The Canadian government made a bold move this year in permanently eliminating interest on federal student loans, which was largely seen as a great step toward reducing the total student debt burden.

While there were some calls to erase student debt in Canada last year, the government’s elimination of interest on federal loans seems to have offered satisfactory relief, at least for now.

Alternatives to student debt

Scholarships, grants, and bursaries in Canada

There are many scholarship and bursary awards available to students at both the federal and provincial level, with Scholarships Canada reporting over 93,000 awards in their database. Scholarships are usually awarded on academic merit or extracurricular activities, while bursaries are primarily awarded based on financial need. It’s worth taking the time to research the different funding options available to you.

The CSFA program offers students the opportunity to apply for any relevant grants available to them. The loan and grant application process is streamlined, and there are many different streams of grant funding available.

Grant funding is determined by your family income, tuition costs, and program length.

Part-time jobs and work-study programs

Part-time jobs are a crucial element of student loan repayment for the average Canadian student. A reliable part-time job can help make all the difference to your finances as a student.

Depending on your institution, you may be eligible to apply for a work-study program that can help fund your postsecondary education. Many universities throughout Canada offer these programs to students looking to work up to 20 hours per week, usually on campus. These jobs are usually in administrative or research roles. For example, the University of Toronto offers roles, including publications research assistants and marketing, web, and communications assistants.

Co-op programs and internships

Co-op programs offer post secondary students the chance to work in their chosen field as part of their educational program. There are both provincial and federal co-op programs, which are designed to blend theory and practice to help students who aspire to work in a public service profession. These programs can help you manage your student loan by providing income to make your repayments, as well as helping you secure a good job in your profession.

Internships are similar to co-op programs, but are not exclusive to public services and are less likely to be paid. You can find out more information on internships available to you through your institution’s career centre.

Tips for managing student debt

Managing your student debt is a daunting task, but the best thing you can do is have a realistic payment plan with an end date, while also considering your current living expenses and other savings priorities, like retirement. Your budget is your friend, and learning how to stick to it closely is a foundational life skill. The following tips can help you do just that:

  • Ensure you’ve got a clear picture of your total student loan debt. This is especially important if private student loans helped fund your tuition fees and overall postsecondary education in addition to government loans. Understanding the full picture will help you feel confident in your ability to manage payments later on.
  • Make sure you explore all of your payment options, ideally before you start making repayments. There are countless scholarship and bursaries opportunities which can help boost your finances, as well as repayment assistance and both provincial and federal loan forgiveness programs.
  • Don’t be afraid to admit when you need assistance. A proactive mentality can make a huge difference in managing your student debt repayments while you’re still ahead of loan or grant application deadlines.

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