It weighs me down
Behind their social lives, extra-curricular activities and academics, many Laurier students struggle daily with the reality of getting into debt.
With the government of Canada slotting student debt as of this fall at an estimated $15 billion and average tuition fees rising four per cent for this academic year, it is hard to deny that the logistics of financing an undergraduate degree are becoming ever more complicated.
And as obtaining an undergraduate degree becomes a requirement for more and more positions, an increasing number of students must face the difficult task of figuring out how to fund an education, along with accommodation, food, transportation and a social life. Accomplishing this without leaving university thousands of dollars in debt can be an onerous task, causing some students to feel stressed and helpless.
Those without significant savings or financial support from their parents must turn to the few available avenues: adding a job on top of their busy student schedule, applying for the OSAP or even applying for a line of credit from the bank.
“I think it’s a very significant challenge for students,” said Laurier’s VP: Student Affairs David McMurray.
“When deciding whether to go to university it’s an issue and then once you get in it’s an ongoing problem,” he explained.
For Nick Gibson, a fourth-year political science student at Laurier, the issue hits close to home. Gibson has worked extensively with an Ontario University Student Alliance (OUSA) campaign called “Food for Thought”, meant to expose the difficulties of living on an OSAP budget. Over the course of three weeks, Gibson sustained himself based on the average amount the program offered students for food last year: $7.50 per day.
“I’d been living like that for a long time…. The campaign gave me an opportunity to highlight what myself and a lot of students have gone through,” said Gibson, explaining that he must live on the OSAP budget every day.
“It’s very difficult to do,” said Gibson, adding that it’s “especially difficult for students involved on campus.”
Added to the struggle of eating healthy – which tends to be more expensive and time-intensive to prepare – he explained that when one is on campus all day it becomes difficult to avoid over-spending.
“It’s a two-pronged struggle between cost and speed,” he explained.
Laurier student Rebecca Watson, a fourth-year classical studies and religion and culture major, also explained that living comfortably is a huge difficulty when living on an OSAP budget.
“The amount still isn’t enough,” said Watson. “It may cover rent or it may cover tuition, but you still need that supplemental income to be able to get everything.”
For University of Waterloo Student Vince Launchbury, a computer science major in his fourth year, the problem lies in the arbitrary, impersonal nature of the student assistance program.
“They don’t give you enough money sometimes, but then other times they’ll give you $2,000 extra,” he explained, adding that when OSAP overpaid him by mistake, they subtracted money from his next semester. In his first semester of university, Launchbury was not even granted enough to cover tuition and had to resort to borrowing from family members.
Launchbury also told The Cord that the program has “screwed him over” by denying him funding based on academic probation standards independent from those of the university. OSAP has also failed to take into account the fact that while his parents – who are currently living in England – have steady incomes, they are not supporting his schooling.
Watson’s experience with OSAP has been largely similar.
“They kind of have this cookie-cutter shape of a student,” she said.
She is registered at Laurier as a disabled student and explained that OSAP asked her to begin repaying her loans last year due to her reduced course-load. As well, after buying a car recently – which she needs to get to and from school – the program denied her needed monetary support.
“They see everything just as numbers,” she stated. “If you have a car it’s just a number… They don’t take into consideration that maybe you need that car to go to school.”
Fourth-year English student Emily Ferko, who attends McMaster University, believes there should be a “separate form where you can explain extenuating circumstances and provide documentation.”
When Ferko’s parents separated, OSAP failed to take into account the fact that while her father’s income was sizable, he was no longer financing her education because he was paying spousal support.
She explains that because “you’re not getting a handout” and students are required to pay the money back, OSAP should make more of an effort to help students get the money they need – and that means personalizing the process.
Gibson agreed that taking family situations, cars and employment into account are important steps for OSAP. However, he added that an important f
actor is ensuring that allocations rise on par with tuition.
“[Student finances] are part of the
university experience, but in some
ways there are too many excesses, too
many excess stresses which distract
from what their focus should be, which
is academics and not having to deal
with financial questions literally
every second of every day.”
However, Gibson noted that students have responsibilities as well.
“Giving out more OSAP funding is great … but for students who are simply going to use those resources in a less-than-responsible way, it’s going to deplete our fiscal resources on a big level, but it’s also not helping them out in the long term because they’ll have more debt and they are not learning anything,” he explained.
Living in the negative
Gibson acknowledged, however, that for many it is almost impossible to avoid getting into debt.
“Debt is a huge problem across society… But for students it’s a different problem, in that we aren’t always spending more than we need to. We just don’t have enough money,” he said.
Watson worries about her debt on a daily basis.
“It weighs me down,” she noted. “I don’t want to continue school because I think what’s the point?… Being in debt $60,000 by the time I leave, is it worth it?”
To pay for rent, tuition and the cost of living – and supplement the limited amount she has gotten from OSAP – Watson has maxed out two credit cards and taken out a student line of credit.
“I’ll use some from the loan to pay off Mastercard and then Mastercard has to pay off the loan. It’s really easy to get lost in the cycle,” she said.
Watson also finds the pressures of student life have added to her debt, noting trends like organic food and brand appeal for clothing as contributors.
“There’s a look you have to conform to…. You can wear sweatpants but they have to be lululemon,” she explained.
Gibson also noted that socializing presents a significant financial dilemma for students struggling with money that those not struggling do not face.
“[Some of my friends] don’t have to face those spur-of-the-moment decisions that I do. Even just ‘Do you want to go to Wilf’s?’…. For me I need to stop and do the calculations,” he stated.
For some students, getting a credit card is one of the only ways to spend the money a normal student life entails, Watson stated.
“You have to have this certain lifestyle and just because you’re a student with no money it doesn’t exclude you,” she said.
Aaron Roberts, a fourth-year philosophy student at Laurier, explained that companies are trying more and more to get students to sign up for credit cards.
“Before they even figure out how to manage money, they’re given power beyond knowledge about how to deal with that power,” said Roberts.
Ferko, who just got a credit card, explained her major concerns about getting into debt. She stated that it’s easy “to just throw things on it which you don’t have the money for at the time.”
Launchbury, for example, told The Cord that it seemed as though the credit card companies were trying to help him get into debt, so that they could collect more interest.
When he applied to get his limit raised when he was spending his semester working, the credit card companies denied his request. However, when he asked to have his limit raised to pay for student housing, they obliged him right away.
While the cost of living makes debt unavoidable for many students, McMurray explained that there are steps individuals can take to lessen the debt and continue a postsecondary education.
“You have to talk about a long-term plan,” said McMurray, noting registering as a part-time student, working or even taking a semester off to build up some savings as possibilities for students in a financial bind.
Breaking through the barrier
McMurray also explained that, like someone attempting to accrue savings for his or her retirement, a student should try to diversify financially.
“For students, the more comprehensive their financial strategy is, the more prepared and better off they’ll be,” said McMurray, referring to multiple sources of monetary resources besides loans, such as loans from family members, applying to many available bursaries or reworking one’s course load to accommodate a job.
He explained that in many cases there is a solution to be found when one is creative, stressing that one’s financial situation should not always determine whether one obtains a degree.
As well, while recognizing the immense burden student debt presents, McMurray noted that, “the investment is undeniable.”
“You can spend $30,000 on a car and it’s not worth anything. Whereas you spend it on your education and the return is many times over,” explained McMurray, admitting that it is difficult for students to see the positive effects in the future past the current financial turmoil.
Gibson explained that struggling with money sometimes contributes to developing good financial sense.
“The student experience in many ways is being frugal, being smart with your money,” he said. However, he recognized that often this frugality becomes “onerous.”
“There’s a point where it’s good life experience, but then there’s a point where it’s past that and too much stress to add to student life,” he explained.
“The excesses of financial hardships for students are what we as a student body, union and administration, as well as provincial and federal government, need to focus on.”
An experiment on student spending at Laurier
Laurier psychology professor Roger Buehler and grad student Johanna Peetz conducted research over the course of several years on student spending. Looking at individuals’ predictions of how much they would spend and how much they actually spent the following week.
It was found that students underestimated their spending by 30 per cent. According to Buehler, “Students had a goal to decrease spending in upcoming weeks and that’s what they’d base their predictions on … but then when the actual week unfolded their goals didn’t seem to guide their behaviour.”
Buehler also noted that students did not learn from their mistakes and underestimated their spending each time.
“We believe that this could lead to problems such as excessive debt because people might take on commitments thinking they’ll have money available because they’re predicting they won’t spend that much money.”
While Buehler and Peetz’s research does not specify a way to rectify this problem, he noted one possible avenue.
“A good direction to go is to come up with strategies to bring people’s behaviour in line with their goals.”
Startling statistics on student debt
Approximate dollar amount of government student debt as of this fall
Overall dollar expenses for a first-year student living on campus
Maximum dollar amount a university student with no dependants could obtain from OSAP over the course of the typical 34-week school year
Average dollar amount paid for tuition in Ontario
Average percentage of tuition increase across Canada
Number of Ontario Student Loans issued in 2006
Number of Ontario Student Loans defaulted in 2009
Average dollars of student debt load per graduating student in 2009