Educated Solutions - Paul Bien article
Republished from Educated Solutions: The Future of Post-Secondary Education Issue (Issue 6, November 2009)
By Paul Bien
The Ontario Undergraduate Student Alliance talks a great deal about student financial assistance. Some of these conversations are simple: “is it student financial assistance or aid?” Some of these conversations are incredibly complicated: “is the needs assessment formula representative of the kind of system we are hoping to foster?” One thing we don’t talk about, beyond broad strokes and generalities, is the impact of high student debt on an entire generation of Canadians.
Now, I should say, it’s not as though the issue isn’t important to the organization. On the contrary, it is on our minds all the time. The real challenge is that we don’t have enough information to talk about the impact that debt has in our country more specifically than just “well, we know it changes behaviour.” I’ve been working in the area of post-secondary education issues for long enough that I could tell you that the average loan this past year was almost $7,800, or that over one hundred thousand university students used the Ontario Student Assistance Program last year. But for the life of me, I couldn’t tell you if having over $20,000 of student debt means you can’t get a car, or a house, or forces you to take a job you hate because you need to pay down your debt.
Do a quick Google search for student debt and over the course of the pages you might find a study here or there outlining some of the fall-out from high debt levels. Now add the word “Canada” to your search criteria and suddenly you lose most results resembling debt impact studies. There is a great deal of information about repaying your loans and those who face difficultly. You can find interesting studies about the relationship between staying in university and the debt that you carry. But that’s where the data ends.
It is important to point out that staying in school, or persistence, is a choice and a clear impact of debt. When the Canada Millennium Scholarship Foundation published their paper about debt impact in 2005 a number of interesting facts came to light. The study explains that “the group with the lowest level of persistence had the highest amount of debt for the amount of program they had completed.” This means that students who chose not to stay through to the completion of their degree also had the highest amount of debt. The study goes on to point out that debt aversion was a main factor in the decision to drop out.
Understanding repayment and persistence is important, no doubt, but very little work has been done on how debt changes a graduate’s non-academic life choices.
For example, if I were to graduate with $90,000 of combined debt from an undergraduate B.A. and a law program at the University of Western Ontario would I still have the ability to pursue my dream of being a legal-aid focused lawyer? Could I still afford food, shelter, and an $800 loan payment each month? Further, what life steps will I have to put on hold to repay this debt. Maybe I’ll move back in with my parents, maybe I’ll delay my wedding and put off having kids.
Worst of all, maybe I won’t do any of this and instead go to Bay St. to take a high paying job that is not even in the vicinity of the reasons I had gone to into the profession of law for in the first place. This will ensure that I can repay my loans, but higher education is supposed to open the doors to achieving our dreams, not bolt them shut.
Imbedded in some of these questions are the kinds of metrics researchers might use to test the long term impact of debt. Comparative analysis between graduates from low-income and high-income family backgrounds would be useful in comparing post-graduation: employment choice; living situation; consumer purchases; or, further education. Moreover, a long-term survey and analysis, similar to the youth in transition survey conducted by Statistics Canada, would give important information over the period of time that might be considered the adult formative years: those years between graduation and your first serious professional employment in the field in which you studied. This will help answer the question of the true impact that the rising cost of higher education has on a student’s life over the long term.
It is time that the community of post-secondary education researchers spent some serious energy in this area. As tuition fees continue to rise, politicians and institutions are inclined to say “it’s ok, there’s student financial assistance to make sure no student is unable to access higher education.” But this is a worrying trend. If student loans are going to be used as the reason for allowing educational costs to grow ever higher, shouldn’t we better understand the impact of these decisions? With the Canada Millennium Scholarship Foundation’s mandate coming to an end, it will fall to the government and others to pick up this mantle and push the issue forward. Without more knowledge, we’re sending graduates down a perilous path without fully understanding where it might lead.
Paul Bien is the Director of Research and Policy Analysis for the Ontario Undergraduate Student Alliance. He graduated from Carleton University with a Bachelor’s in Public Affairs & Policy Management.
