Student debt limits post-grad options

Students who graduate from college and university with high debt loads are putting off buying a house, having children or investing for the future, according to a new report.

The Canadian Council on Learning published the report Wednesday, as part of a series on the costs of post-secondary education.

It found that the average debt load of university graduates in 2009 was $26,680, while the average debt for college graduates was $13,600. Those figures don't account for credit cards, lines of credit, car loans or mortgages.

A third of college and university graduates have difficulty repaying their student loans, the report finds.

"This report points to some of the long-term consequences of incurring large debts, sometimes involving postponement of the milestones of life, like having children or owning a house," said Dr. Paul Cappon, president and CEO of the Canadian Council on Learning.

"[Debt] can also impact choice of career, possibly to the public detriment," he said.

'Investing in education at the post-secondary level involves a certain degree of risk for students...' —Canadian Council on Learning report

While college and university graduates tend to earn substantially more than those with a high school education, the report also states that education alone isn't a guarantee that earnings will be sufficient to repay high debt loads.

"Investing in education at the post-secondary level involves a certain degree of risk for students, especially if they must rely on student loans," states the report.

Certain factors determine how quickly students are able to pay back their student debt, including their ability to complete their program, the employment potential in their area of expertise, and family and health issues that may result in prolonged unemployment.

A student's financial status prior to seeking higher education is also a significant factor. Low-income students may be more averse to taking on debt, forcing them to forgo college or university.

The report also found that students who attend private career colleges were more likely to default on student loans.

"While career-college students made up only 17 per cent of federal student loan recipients, they accounted for more than 30 per cent of delinquent loans," states the report.

"With so little information about private PSE [post-secondary education] institutions, no Canadian system of PSE accreditation, and no national quality review agency, students are denied sufficient and objective information in ascertaining value for money invested in PSE," Cappon said.

The report concludes that Canada should have a more co-ordinated system of handling student loans, as well as an accreditation system for all post-secondary institutions.