OTTAWA, June 2, 2015 /CNW/ - As Canada's 'Big 6' banks all reported stronger-than-expected profits last week, newly examined data from Statistics Canada reveals a massive upswing in privately held debt among post-secondary graduates. In only ten years, while bachelor's degree graduates saw a 5.2 percent increase in public debt, private debt for that group shot up by 53 percent.
"As the upfront costs of post-secondary education continue to rise, more Canadians must rely on debt to pursue their studies," said Jessica McCormick, National Chairperson of the Canadian Federation of Students. "Higher rates of private borrowing—and the associated interest—mean banks are seeing higher profits on the backs of students."
Private debt levels for PhD. and Bachelor's degree holders have jumped between four and 11.5 percent each year between 2000 and 2010. If the same standards used by the Bank of Canada for household debt are applied to private student debt—where annual growth above four percent raises concerns—then there is justifiable cause to sound the alarm. The Canada Student Loans Program expects that over 40 percent of borrowers will need more than the maximum available loans next year.
"Each year, as more students take out the maximum available public loans, they turn to private sources such as bank loans, lines of credit, and credit cards to make ends meet," added McCormick. "Similar to high household debt, high student debt slows recovery and keeps Canadian graduates from participating fully in the economy."
A more detailed analysis is available on the Federation's website:
The Canadian Federation of Students is Canada's largest student organisation, uniting more than one-half million students across Canada. The Canadian Federation of Students and its predecessor organisations have represented students in Canada since 1927.
SOURCE Canadian Federation of Students
For further information: Sarah McCue, Communications Coordinator at 613-232-7394 or [email protected]