How some grads are crushing their student debt during the pandemic

Three years ago, Godwin Scott graduated from Carleton University with about $120,000 in student debt. 

Today, he's debt free.

"I'll be honest, it did not hit me that night," said Scott, 26, who made his final student loan payment last October, in the middle of the pandemic. "I still feel odd knowing that I don't owe somebody."

Scott is one of several post-secondary students who spoke to CBC Ottawa in 2017 about what they owed and how it was affecting their lives. We followed up to see where they are now, and how they're paying the rest of their debt off.

Scott, an international student at the time, had debt tied to an Indian bank that was charging about 13 per cent interest. He said he leaned on advice from financial experts and used Canada's tuition tax credit to defer taxes for a few years, but his best strategy was to get his overseas loan paid down as quickly as possible.

"When I graduated, I had a conversation with my friends [and family]. I asked them to sort of loan me maybe a couple thousand dollars that I could pay them back in a couple months," explained Scott, who said a handful of people trusted him and loaned him money at zero interest.

"[There] was an element of faith involved," he said.

Scott used the approximately $50,000 he borrowed from family and friends to slash his bank loan by nearly half. He lived frugally in the basement of a pastor's home where he paid $500 per month in rent, allowing him to allocate about 80 per cent of his paycheque to his student loans. 

As time went by, he was able to reduce the portion of his income earmarked for debt repayment to about 60 per cent.

"One thing I do want to share with the students coming into Canada is ... there's a responsibility on you to pay back what you borrowed ... quickly," he said. "Because that's the best way to freedom, financially."

Cracking down on credit debt

Troy Curtis graduated from Carleton in the summer of 2019 with about $17,000 in debt through the Ontario Student Assistance Program (OSAP) and a credit line. He also had thousands of dollars in credit card debt for living expenses during school.

Curtis, 25, who's now a freelance digital marketing consultant and photographer, has about $10,000 left to pay.

"After I graduated, the biggest thing for me ... was making sure I found a job right away," he said. Eventually, Curtis found a position with a non-profit, and freelanced as a graphic designer and wedding photographer on the side.

"That's when I was able to start really each month cracking down on my credit card debt first," he said. It took a year and a half to pay down the card.

During the pandemic, Curtis's work-from-home situation remained static, but he found himself with more contracts due to greater demand for virtual conferences and other projects. He was making bigger dents in his debt and saving for the future, perhaps for a house, so he approached a financial adviser. 

Curtis says he's now optimistic about his financial future.

"[I feel] more comfortable," he said. "$10,000 still left in debt is a lot, but it's definitely manageable. I can understand how to pay it back."

Goodbye to $30K in 2.5 years

Lauren Paulson, 27, graduated in December 2018 from Algonquin College with about $50,000 in debt — more than half of it through OSAP and the rest through a line of credit with her bank. 

Less than three years in, the X-ray technologist with CHEO has crushed about $30,000 of it, "which I'm pretty happy with," Paulson said.

Paulson said she's "extremely fortunate" to have found a job right after school. She said her strategy centred largely on keeping her expenses down, and she's thankful her partner was able to purchase a house, a "huge factor" in her being able to pay off her debt so quickly.  

"If I was in that situation putting so much of my paycheque each month toward rent, there's no way I would be able to have paid off this much debt so far," she said. "Luck was on my side in that sense."

Paulson also targeted her line of credit, which has a higher interest rate. Now, she's turned her focus toward OSAP, which has given her an interest-free grace period during the pandemic. 

"I am super fortunate," she said. "I've never been super strong financially, or very smart with my finances, I would say. There's a reason I wound up with $50,000 in debt."