STUDENT DEBT: How is it affected by COVID-19? What can you do about it?
Are you a student paying your way through school?
Many students in Canada each year graduate with thousands of dollars of student loans in debt.
The life of a student is tough enough as it is with having heavy class loads, moving away from home, and making new friends. Students work hard to get through various years of school and maintain good grades, all for the opportunity to graduate and begin their career of choice. Unfortunately for some, finally graduating from post-secondary school also means ultimately having to face the many zeros at the end of their accumulated student debt. An article published by Vancouver Island Free Daily[BC] stated that half of students graduating in the year 2015 finished with academic debt. In 2018, two thirds of those students were still struggling to pay off their debt after graduation. This is a similar finding throughout various levels of study.
The debt of education should be less of a burden to students trying to move forward with their adult lives. Many factors may affect the likelihood that a student might struggle with post secondary debt such as financial status, environmental status, familial support, and their capacity to make money. COVID-19 is a fierce opponent when it comes to affecting the ability of students to manage their debt and it's only just begun. During the peak months of major nation wide shutdowns, students between the ages of 20-24 experienced a decrease in employment rates up to 23.6 per cent according to the Vancouver Island Free Daily[BC]. For many students, this significant drop realistically increases the length of time they may have to struggle with their debt. Below, you will find a visual representation titled “Educational Evolution” by artist Jeff Koterba that thoroughly illustrates the physical difficulties of carrying student debt.
It is difficult to tell to what extent COVID-19 has been a barrier for post-secondary students. One thing for sure, is that we may begin to see repercussions that we may not be ready to face.
Tips for managing student debt
Be aware of that number: It's important that you know exactly how much you really are in debt and how much you have to pay back. This may help you get the full picture of your financials and motivate you to start planning how to pay it off.
Payment terms and conditions: Knowing the terms, conditions, deadlines, and impacts for payment are important when managing your debt in order to stay on track of submitting your payments and knowing where you’re at in the process. Make sure you are familiar with the functionality of your bank and protocols.
Start big: Students may have multiple sources of debt. By cracking down on those higher numbers, you can decrease your interest rates and save money.
Set a goal and have a budget: By setting goals, you can plan for consistency when paying off your debt in a systematically efficient way. Budgeting is the perfect way to make sure you are living within your means.
Don't be so hard on yourself: Thousands of people worldwide struggle with the burden of debt. Understand and respect the process: it won't disappear overnight. You are not alone!