Students Face Financial Struggles as Costs Rise Ahead of New Year

As the new academic year approaches, students across Canada are grappling with significant financial challenges. Rising tuition fees, increased living costs, and a sluggish job market are contributing to heightened anxieties regarding their financial stability. According to a recent poll by the Canadian Imperial Bank of Commerce (CIBC), nearly half of the students surveyed expressed concerns about their ability to cover their expenses for the upcoming school year.

The average tuition for undergraduate programs in Canada reached $7,360 last year, a noticeable increase from $6,580 five years prior, as reported by Statistics Canada. This trend highlights a growing financial burden on students, many of whom are turning to multiple funding sources to meet their educational costs.

Students Seek Diverse Funding Sources

To alleviate financial pressures, 78 per cent of students are employed during the academic year, and 53 per cent are relying on student loans. However, a significant portion, approximately 48 per cent, are worried about their dependence on parental support. “Students across Canada are navigating significant financial challenges, from the rising cost of living to unique student-related expenses,” stated Frank Psoras, executive vice-president of personal banking products and payments at CIBC.

Efforts to manage finances have prompted students to adopt various budgeting strategies. Approximately 55 per cent of respondents are using a budget, 49 per cent are cutting back on non-essential purchases, and 35 per cent are actively applying for scholarships to assist with their educational expenses.

The job market is not favorable for students either. Employment rates for those aged 15 to 24 fell to 53.6 per cent in July 2023, marking the lowest level since November 1998, excluding the pandemic years of 2020 and 2021. The Canadian National Exhibition reported a record 54,000 applications for just 5,000 available positions, up from 37,000 the previous year. Overall, summer job postings have decreased by 22 per cent compared to the previous year, according to a report from Indeed Hiring Lab.

Debt Levels Continue to Rise

The financial strain is evident in the increasing debt levels faced by graduates. Statistics Canada revealed that the average bachelor’s degree student graduated with $30,600 in debt in 2020, while college graduates carried an average debt of $16,700. These figures underscore the long-term implications of rising educational costs and limited job opportunities.

Despite these financial hurdles, there may be some relief for students in terms of housing costs. Average rental prices in Canada fell by 3.7 per cent in August compared to the previous year. Interestingly, Saskatchewan is the only region where rental prices saw an increase, according to data from Rentals.ca.

As students prepare for another demanding year, the financial landscape remains precarious. Many are actively seeking innovative ways to manage their budgets and secure funding while navigating an increasingly challenging economic environment. The ongoing economic conditions serve as a reminder of the importance of financial literacy and support systems for students entering the higher education sector.