National Graduates Survey: Student debt

About one-half of college graduates and bachelor graduates (graduates from a university bachelor's program) from the class of 2000 left school owing money for their education, mostly in the form of government student loans. One in five graduates who did owe money was debt free two years after graduation. On average, graduates who still owed money for student loans had paid off about one-quarter of their debt.

On average, bachelor graduates with student debt owed about $20,000 to all sources. College graduates owed almost $13,000. Most education debt was to government student loan programs: 41% of college graduates and 45% of bachelor graduates left school with government student loans.

College graduates with debt to government student loan programs owed an average of $12,600 and bachelor graduates owed $19,500.

Two years after graduation, one in five college and bachelor graduates with government student debt had paid it off completely. For those with debt still remaining two years after graduation, almost one-quarter of the debt had been paid off, more than would be paid off by a graduate making regular payments with a standard 10-year payment schedule.

Most graduates with debt did not report difficulties paying their debt. Only 24% of bachelor graduates and 30% of college graduates reported difficulties with repayment.

A small, but notable proportion of graduates left school with large debts. One in seven bachelor graduates, about 14%, owed $25,000 or more in government student loans upon graduating.

While 38% of bachelor graduates with large debt reported difficulties repaying their loans, about 12% had paid off their entire debt two years after graduation. Moreover, those with remaining loans two years after graduation had managed to pay off, on average, 23% of their debt.

One factor in the size of student debt is the length of time students are in school and possibly accumulating debt. Overall, over one-third of indebted college graduates and more than one-half of indebted bachelor graduates had some previous postsecondary experience prior to entering their most recent program.

Most student debt was in government student loans

The bulk of student debt was tied up in government student loans in 2000. However, almost one in five graduates borrowed from other sources to finance their education, either as the sole source of loans, or in addition to government loans.

Among both college and bachelor graduates, about one-third left school with only government student debt, and 8% owed only to non-government sources, such as private bank loans, student lines of credit and loans from family. Some students borrowed from other sources to supplement their student loans: 11% of bachelor graduates and 8% of college graduates owed money to both public and private sources.

The amounts owed to private or non-government sources were generally much smaller than government loans. At the college level, graduates with only government student loans owed an average of $12,500 at graduation, compared with just $7,100 for those owing money only to non-government sources. College students who owed to both sources had an average of $19,200 in total student debt.

The figures were much higher for bachelor graduates. Those with only government student loans owed on average $19,300 in 2000, and those with only private loans owed $9,500. However, bachelor graduates who owed to both sources were in debt to the tune of $32,200 on average.

Class of 2000 grads owed more than their 1995 counterparts

Although there was no change in the percentage of graduates with government student debt, college and bachelor graduates from the class of 2000 owed more, on average, than borrowers from the class of 1995.

Students in bachelor programs who graduated in 2000 owed about 30% more than the class of 1995 and 76% more than the class of 1990 (in 2000 constant dollars). College graduates with government student loans owed 21% more than in 1995 and 76% more than the class of 1990.

These increases reflect the rise in tuition fees over the 1990s. Average undergraduate tuition (in current dollars) increased from $1,185 in 1988/89 to $2,023 in 1993/94 and $3,064  in 1998/99.

Debt repayment related to good employment and earnings prospects

The ability to pay off debt is influenced by a number of factors: size of debt, employment, earnings, interest rates, and personal circumstances. It is not surprising, therefore, that the graduates who were able to eliminate their student debt in the first two years following graduation were advantaged in many of these respects.

First, the average debt on graduation for students who paid off their debt within two years was significantly lower than the average debt of students who still owed money two years later. Bachelor graduates who were debt-free had started out with about $8,000 less debt; debt-free college graduates had started out with almost $6,000 less debt. In addition, fewer of these graduates at both levels had started out with large debts of $25,000 or more.

Graduates who were able to pay off their debt by 2002 had higher incomes after graduation than those who still owed student debt two years after graduation. On average, personal incomes for 2001 for the graduates who had paid off their debt were 13% higher for bachelor graduates ($4,000) and 24% higher for college graduates ($6,000).

At the bachelor level, there was no difference in the employment rate of graduates who had paid off their debt by 2002 and those who hadn't. However, at the college level, 94% of those who had paid off two years later were employed, compared with only 88% of those with remaining debt.

Overall, about 90% of college and bachelor graduates who had not pursued further studies were employed two years after graduation. Median earnings for bachelor graduates working full-time were $39,000 compared with $31,000 for college graduates.

Definitions, data sources and methods: survey number 5012.

The report Class of 2000: Profile of Postsecondary Graduates and Student Debt (81-595-MIE2004016, free) is now available online. From the Our products and services page, under Browse our Internet publications, choose Free, then Education.

For more information, to order data, or to enquire about the concepts, methods or data quality of this release, contact Client Services (1-800-307-3382; 613-951-7608; fax: 613-951-9040; educationstats@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.