$40k in student loans? Don’t worry.

University isn’t nearly as expensive as it seems


If you look at the sticker price of university, $7,259 on average in Ontario for full-time undergraduates, and compare that to what Ontarian students paid in 1990—about $2,500 in today’s money—a bachelor’s degree appears to have tripled in price.

But when you factor in a smorgasbord of rebates, scholarships and grants, as York University professor George Fallis pointed out in a recent Toronto Star commentary, it’s actually less expensive to attend now than it was two decades ago. The Ontario Tuition Grant, advertised as 30 per cent off, brings the cost down by $1,730 per year for university students from families with incomes under $160,000. Meanwhile, tax credits for tuition reduce bills by up to $5,000 per year during or after school. Families who started Registered Education Savings Plans get free money, too. And so on.

Student groups, of course, argue that many don’t get enough in loans and grants to cover upfront costs or are scared off by the price. Their proof is that low-income students access post-secondary education less than those from richer families. It’s true that only 75 per cent of high school students from families earning $25,000 to $50,000 attend, compared to 93 per cent from families earning $100,000 or more, but as Fallis writes in his book Rethinking Higher Education, it’s unclear that cost is to blame.

What is clear to me now that I’ve paid off my student loans—I got the “Congratulations!” letter in my mailbox last week—is the magnitude of all those credits and grants. During school, I didn’t know from year to year where the next tuition payment or rent cheque would come from. But I also failed to realize how much of my loans would be forgiven. I thought it might take a decade to pay back. In fact, it took four years.

My expenses for the first year of my bachelor’s degree at the University of Guelph in 2003 were about $5,000 for tuition and books, plus $10,000 for everything else. I drew $5,000 from my Registered Education Savings Plan (thanks mom, dad and tax credits), got a $3,000 entrance scholarship for having grades over 80 per cent, saved $2,000 from a summer job selling ice cream and borrowed $5,000 from a bank.

I would have preferred a government loan from the Ontario Student Assistance Program, since interest on bank loans starts accumulating right away, but my parents’ middle-class income disqualified me. Had my parents earned less, I would have been among the half of students who get OSAP loans each year from the province.

In year two, I lost the $3,000 scholarship but made up for that by earning more at my summer jobs and learning how to budget. Instead of eating $10 dinners on campus like in first year, I cooked $2 pasta dishes with roommates. Instead of a $900-per-month residence room on campus, I spent $450 for a room off campus.

I had to take a fifth year because switching programs left me short on credits. That was really stressful. I had run out of RESP money and the credit line was maxed out at $20,000. But because I hadn’t lived with my parents for four years, I was eligible for a $10,500 OSAP loan. That saved me for a while, but I was short by March, so I worked part-time jobs as a server, campus election-poll clerk, editor of a campus website—even as a medical research participant.

I had $30,500 of debt by graduation but that didn’t stop me from accepting an offer to attend a two-year master’s program at the University of British Columbia. I got another $10,500 worth of OSAP that saw me through year one and a $17,500 Social Sciences and Humanities Research Council grant that saw me through year two.

I finished in 2010 with $41,000 in student loans and got a summer job at Maclean’s that paid enough to start making monthly $320 payments on the bank loan. By the time my six-month grace period on paying back OSAP was over, I had steady work and could afford $280 monthly payments on that too. Every time I did some extra freelance work, I paid off a chunk. I haven’t earned a high salary over the past four years—about the same as the typical bachelor of arts graduate—but I have lived frugally.

While it’s true that I have my parents to thank for getting me started, that I was able to find work each summer, and that cheap rent since graduation has helped big time, the biggest surprise is how much taxpayers helped out along the way. I had $20,500 in scholarships over seven years, tuition credits that reduced my tax bill by about $15,000 over the first three years after graduation, and got a windfall known as the Ontario Student Opportunity Grant that knocked $6,000 off my government loans.

Although tuition was lower when I was in school than it is today, students who get the $1,730 Ontario Tuition Grant pay about the same as I did back in 2008. And while job prospects aren’t great now, they were just as bad in 2010 when I finished school.

It’s scary to not know where to find all the money, and painful to have to take on debt, but there is plenty of help along the way.


$40k in student loans? Don’t worry.

  1. Good on you for recognizing the help of taxpayers. You should consider that taxpayers also subsidized much of your tuition costs in the first place, but still, you are miles ahead of the spoiled brats from Quebec who paralyzed a province for months because they were asked to pay their fair share.

  2. While I don’t disagree with you about the available funding for those who attend public postsecondary institutions, at least in BC, when I last looked at the numbers (3yrs ago), the majority of first time borrowers didn’t go to public postsecondary. The majority of student loans in BC (and I’m guessing this is the case in Ontario, where there are also lots of newly landed immigrant students), are to those who attend private and often for-profit institutions. These institutions often cost more, the students are not eligible for SSHRC funding or similar tuition discounting, and these students often take out personal loans on top of the public ones. Now, there’s a story I’d personally love to see you cover, Josh!

  3. You lost me 1/2 way through this propaganda diatribe.

    Sure, in dollars it cost a lot less decades ago, but so were wages lower. I plugged in what I paid in 1978/79 into the BoC inflation calculator and the result was a much higher number than kids pay today. After inflation is calculated, education has never been cheaper.

    I was even denied loans, Mom was poor, dad was earning good but delinquent in family support, I was denied loans so I had 3 jobs to pay my own way. Graduated with $250 to my name and no debt. Huge life advancement, I didn’t realize it but they did me a HUGE favor in turning me down.

    Best job I liked was driving cab. Any idle time, I pulled out a tex book and did study time, great time management skills. A hidden lessons of time management and work skills already on my resume with a gradation in top 10%, got me a great job off the top, and no debt.

    Paid off our home mortgage at 35, as no student debt allowed me to reduce mortgage debt fast. Only loans I have had since 35 have been a case where the auto gave me 0% interest, and I would have had to cash out 5.3% yield securities to do it. That is, it paid me to borrow with low risk and defined return.

    Yep, I went from a poor family to a 2%er and retired early. But then I was strong on math, economics, logical and rational thought, you had to be to get through electronics engineering, a trade that paid money was part of why I chose electronics engineering and programming.

    No fluffy low paying degrees for my time. I never did ignore the obvious.

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