Tuesday, May 4, 2004

SPOTLIGHT: Class of 2000

Grads coping with debt loads

University and college students are leaving school with ever-increasing debts, but they are still able to manage the load after they graduate, according to a new report.

About one-half of students who graduated in the class of 2000 left school owing money. And while the same proportion of grads left school with debts in both 1995 and 2000, those who graduated in 2000 owed far more on average than their earlier counterparts.

Students in university bachelor programs who graduated in 2000 owed about 30% more than bachelor’s grads in the class of 1995, and 76% more than those in the class of 1990.

Similarly, college graduates with government student loans owed 21% more than those in 1995 and 76% more than in 1990. These increases reflect soaring tuition fees during the 1990s.

About one in five graduates who had left school in 2000 with government student loans had paid them off completely two years after graduation.

Among the grads who still owed money two years after graduation, about three-quarters of their debt remained to be re-paid.

Most education debt was to government student loan programs. College graduates with debt to these programs owed an average of $12,600, while university bachelor graduates owed $19,500.

One in seven had large debts

About one-quarter of university bachelor grads reported difficulties paying their debt, compared with about a third of college graduates.

A small, but notable proportion of graduates left school with large debts. One in seven bachelor graduates, about 14%, owed $25,000 or more in government student loans on graduating.

Graduates who were able to pay off their debt by 2002 had higher incomes on average after graduation than those who still owed student debt two years after graduation. The ability to pay off debt was influenced by a number of factors: size of debt, employment, earnings, low interest rates and personal circumstances.

The report “Class of 2000: Profile of postsecondary graduates and student debt” is now available on online.

For more information, contact Client Services, (613-951-7608), Centre for Education Statistics.

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© 2004, Statistics Canada.