New poll shows Canadian students struggles as they transition into the workforce
A new poll by Embark, Canada’s education savings and planning company, reveals the financial challenges that post-secondary students are facing.
The survey highlights that many students are finding it increasingly difficult to pay for their education while attending school, leading to a situation where they are “education rich, but cash poor.”
The data shows that 44 percent of students are spending at least three-quarters of their total income on post-secondary education, excluding essential expenses like food, and living costs.
The poll also underscores the reliance of students on parental support. Sixty-four percent of students stated that they could not afford their education without their parents' help, and 43 percent indicated they would have to drop out without this financial assistance.
Moreover, 26 percent of students have considered leaving their studies due to financial pressures. Despite the support from parents, with 75 percent of students reporting that their parents have helped them financially, many students are stretched too thin.
The findings reflect the harsh financial realities faced by today's post-secondary students and suggest a lasting impact on their financial well-being as they transition into their careers.
The poll further highlights that student debt is becoming an accepted part of the post-secondary experience, with nearly half of the students surveyed either having or expecting to have student debt.
One-third of students admitted that they currently have more debt than savings, and 49 percent expressed concern about their financial future due to the amount of debt they are accumulating.
A significant 82 percent of students find the financial realities of pursuing a post-secondary education overwhelming.
The rising cost of education, which has outpaced Canada's target inflation rate, coupled with increased living expenses, has made it challenging for students to afford their education.
Seventy-four percent of students reported that affording post-secondary education is very hard, and over half have had to cut back on necessities to make ends meet.
To fund their education, 64 percent of students have taken on part- or full-time jobs, but this comes at a cost. Thirty-nine percent of students said their grades have suffered due to their financial obligations, and 76 percent find it difficult to balance work and school.
The tough job market has further complicated matters, cutting off what many students see as a financial lifeline.
Andrew Lo, president and CEO of Embark, commented on the situation, stating that the challenging job market makes it particularly difficult for younger Canadians to secure the part- and full-time jobs they rely on to support their education.
He noted that 68 percent of students wish they had saved more money before starting school, a sentiment likely to grow stronger given current economic conditions. Lo emphasized the importance of starting education savings early to provide a financial cushion in volatile times.
Despite the challenges, Canadians still see value in pursuing a post-secondary education, with 61 percent of students acknowledging that it is hard to succeed in life without one.
However, 66 percent of students believe that graduating with debt will make it harder for them to become financially independent from their parents and start their lives after school.
This concern is further compounded by the fact that 41 percent of students plan to live with their parents for an extended period after graduation due to student debt.
The poll also sheds light on the expected levels of debt among students. Those expecting to graduate with debt anticipate accumulating $25,382 on average, with an expected repayment period of 2.8 years.
However, Statistics Canada recently reported that the average student debt is $30,600, with loans like those from the Ontario Student Assistance Program designed to be repaid over 9.5 years.
The survey reveals that for many students, post-secondary education marks the first time they have had to manage their own finances.
This new responsibility can be incredibly stressful, with 66 percent of students admitting that checking their bank account causes them anxiety, and 52 percent saying they avoid thinking about debt and money.
Even those who want to improve their financial situation often feel at a loss, with 66 percent stating they want to improve their finances but do not know how.
Transparency around post-secondary options is another significant concern. Nearly 73 percent of students expressed a desire for more transparency about their post-secondary options, and 49 percent said that if they could go back in time, they would make different decisions about their education.
Additionally, 57 percent of students wished they had known more about post-secondary school before deciding where to go or what to study, and 74 percent found navigating the post-secondary process to be complicated.
Sixty-nine percent wished they had received more guidance when planning their education, and 47 percent felt they were not given enough information to make informed choices about post-secondary education.
Andrew Lo emphasized the importance of addressing the lack of preparedness among students when choosing their post-secondary education. He highlighted that this is a significant financial and life decision for young Canadians that will have a lasting impact on their futures.
At Embark, the focus is on offering resources to improve transparency around post-secondary options and costs, enabling students to make more informed decisions.
The findings from the poll suggest that better financial preparation and education can help students navigate these challenges. Parents are encouraged to forecast the cost of their child's education early and save accordingly.
Utilizing tools like a Registered Education Savings Plan (RESP) can provide tax advantages and government contributions to help build an education fund.
Open communication between parents and children about education costs and savings goals is also critical in preparing for the financial demands of post-secondary education.
Students, on the other hand, are advised to research their options thoroughly, build financial literacy early, and consider the intensity of their chosen programs when budgeting for their education.
