Students are stretched increasingly thin as cost of living climbs

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More than a quarter of university and college students are thinking about dropping out of school due to the rising cost of tuition, rent and groceries, according to a new survey released Wednesday by Embark Student Corp., an education savings company.

The survey said 26 per cent of Canadian post-secondary students have considered ending their schooling because of costs, highlighting the financial realities many face while in school. It said 48 per cent of students expect to have student debt at graduation, while 33 per cent said they currently have more debt than savings and 82 per cent find their finances overwhelming.

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Canadian tuition fees have steadily climbed since at least 2019. The average undergraduate paid $7,076 in tuition for the 2023-2024 school year, up from $6,468 for the 2019-2020 year, according to Statistics Canada. Graduate tuition, meanwhile, climbed $387 in the same period, reaching $7,573 for the last school year.

To help cover the costs, more students are taking up part- or full-time work.

The Embark survey said 64 per cent of respondents are working to pay for school, though 76 per cent find it difficult to manage their job and education.

Students are also finding it hard to find employment as many businesses have scaled back hiring plans due to the economic downturn in Canada.

“In today’s challenging job market, it is particularly difficult for younger Canadians to secure part- and full-time jobs,” Andrew Lo, chief executive of Embark, said in a news release. “For those who rely on employment to support their education, this adds another layer of difficulty on top of rising education and living costs.”

Along with needing a job, most students are turning to their parents for financial help.

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The survey said 75 per cent of respondents are receiving help from their parents, while 64 per cent said they wouldn’t be able to afford a post-secondary education without parental support.

Tips for education savings

Embark recommends parents set up a registered education savings plan (RESP) as soon as possible. If done correctly, Embark said government contributions could add up to $7,200 on the first $36,000 added to the account.

“Our survey showed that 68 per cent of post-secondary students wish they had saved more money before starting school, a sentiment that will only grow stronger in our current economic conditions,” Lo said. “Students and their parents would benefit from starting education savings early to provide a larger financial cushion in volatile times.”

For prospective students, Embark suggests doing research to find the right school program at the right price, and to take into account a program’s intensity and time commitment when saving. A more intense program would likely mean less time for a job and would thus require more savings beforehand.

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McLister on mortgages

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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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