Going to university is one of those things that nearly everyone dreams of. Graduating with your future ahead of you, your degree being the key to your dream career and a million opportunities.
Figures released by Universities Canada revealed that there were over 1 million full-time students in 2017 and 58% of Canadian entrepreneurs are university graduates.
But, like most things in life, your education comes at a price. Getting your degree will cost you thousands of dollars each year, which can leave you in financial turmoil by the time you enter the world of work.
You don’t have to pay your loans back straight away, you are given a 6 month period once you have graduated to give you time to make a plan for your repayments. This can seem great,but when most students graduate with close to $30k owed for their student loans,and interest piling up,it can become a lot to handle.
In an article published by CSC news, it was quoted that 25% of students go into default at one point in their repayment term.This often impacts their credit scores which in turn impacts their likelihood of future borrowing for things such as a home.
You can get help from the government through repayment assistance plans. However, you need to contact them as soon as possible. If your loan remains in default for longer than 90 days, you then lose the right to have this option.
Getting your degree isn’t an easy feat, but the debt you’re left with once graduating can affect your life in numerous ways.Defaulting on your student loan can result in it being sent to the Canada Revenue Agency (CRA). They can then take the money from your wages, your tax refunds or your GST.
Students are always under enormous pressure to do well. Good grades equal graduation which equals higher chances of a good job after graduation.
It is estimated by the government that 70% of jobs the current economy require some level of post-secondary education.
This, along with the level of debt you will be left with when you’re done can cause high levels of stress and anxiety.
According to an article published by Psychology Today, 73% of students are likely to experience at least one mental health crisis during their studies.
Many are working multiple jobs and having to sacrifice study time just to keep up, which has led to cries for the government to offer more support.
With interest rates close to 9%, you often end up paying back a considerably higher amount than you initially borrowed.
There have been cries to get rid of the interest on student loans in a bid to help students get out of debt quicker.
Jobs in the field you studied so hard for aren’t easy to come by either. Countless students will end up in jobs completely unrelated to their degree that only just allow them to get by.
Considering the general cost of living and other debts, it’s no wonder people struggle with their finances.
In a poll released by BDO Canada, 67% said they graduated with debt and 62% were still paying the debt off.
Many graduates end up being unable to save any money or even go on vacation.
This often drags people into a vicious cycle of having to take on further debt, such as payday loans or an overdraft to help them get by each month.
It is well known the world over that money is one of the main sources of relationship problems. Research conducted by SunTrust Bank found that 35% of people said finances were their biggest argument.
Being in debt can leave people feeling embarrassed, which can lead to people hiding their finances from their spouses, family and friends.
Debt can have an effect on couples because it affects them being able to buy a home, get married or have children.
Defaulting on your loans results in your credit rating being affected, which can actually affect your employability. Making getting that dream job all that more difficult.
The first step to sorting your debts is realising that your struggling. Below are some signs to look out for:
It isn’t easy to spot if someone is struggling financially, but there are a few signs that could mean someone you know is having money issues:
People often don’t know what to do or where to turn when they are in debt. One of the best steps to take is to contact the loan company, or even the government, to find out if they have any options for you.
Your loan company may be willing to negotiate repayments with you which may allow you to pay less until you are in a better position to pay.
Telling someone about your struggles can be a great tool in finding the support you maybe didn’t know you needed.
At Pearl Associated we understand that no ones finances are the same. Our professional advisors take into account your circumstances and are always on hand to offer you impartial and confidential advice to find a solution that suits you.