7 Helpful Tips from Grads to Reduce Your Student DebtSep 26, 2017
A new BDO Canada poll found that two-thirds of Canadians under 40 graduated with student debt, and most are still carrying it today. Perhaps it’s not surprising that three-quarters of them regret taking on student loans.
Based on their experience, these Canadian grads have a few things they’d suggest to the next generation of students. Here are their top tips to help reduce student debt:
- Be willing to make financial sacrifices when you’re in school. When you’re living on your own for the first time, it may be tempting to eat out, hit the clubs, or buy lots of new clothes with this newfound freedom…and money from the government. But if you can limit your spending until you graduate—and start making money of your own—you’ll have less to pay back after school. Canadians under 40 who graduated with student loans still owe an average of $16,816 in student debt.
- Get a part-time or summer job when you’re in high school to help pay for post-secondary. Working during high school, or even the summer before university, can help you pay for your tuition and reduce your reliance on student loans.
- Pay off student debt as soon as possible. Jordann Brown, a 25-year-old from Halifax, managed to pay off her student loans in 24 months by making extra payments each week, putting her tax returns and rebates toward her loans, and increasing her loan payments after she got a raise.
- Consider your career choices before picking a major. Grads in engineering, mathematics, finance and business can expect to earn higher salaries that should help them pay off student debts sooner.
- Keep working part-time or apply for a co-op program while studying. Steven Van Sluytman, who’s about to graduate from the University of Ottawa, earned $44-thousand from his co-op placement—enough to pay his full tuition. He also worked part-time during semesters, and will graduate without any student debt.
- It’s OK to spend a year or two after high school to work and save money for university. Often known as a gap year, this practice is more common in Europe, but is starting to catch on in Canada. While some take this time to travel, it would be a good idea to use this opportunity to earn money, rather than spend it.
- Try pursuing a trade or a college diploma instead of a university degree. Not only are diplomas or apprenticeships usually less costly than pursuing a four-year degree, but skilled trades are often well-paid, in-demand jobs. If you enjoy hands-on work, you can make a good living without going the university route.
If you find yourself struggling to repay your student loans, there are several debt relief options available. Visit our Student Loan Debt Relief page to learn more.