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3 of the Most Common Student Debt Questions Answered

Congratulations! You’ve got the degree or diploma and you’re starting your working life. But now it’s time to pay back your student loans, which might seem impossible with the amount of money coming in. Having concerns or questions about repaying your student debt is common. We know from our own surveys that a significant number of Canadians are struggling to pay off their student loans — especially women.

The majority of Canadians who rely on federal student loans and repayment assistance are women. And that’s not a surprise, since our Affordability Index poll, conducted in 2018, told us that women struggle more than men when it comes to affordability. They also are more likely to carry a larger debt load than men (52 per cent vs. 45 per cent).

Are we closing the financial gender gap?

Overall, women are closing the gender gap when it comes finances. In a 2018 report, The Economic Well-Being of Women in Canada, Statistics Canada states that, in families where the core working ages are 25-34, women’s earnings accounted for 46.7 per cent of the family’s income in 2015. That’s up 22.2 per cent since 1976.

But women are also more likely to be paid less than men with the same qualifications, and women are overrepresented in low-paying occupations. This could be why so many women need answers to the common debt questions below: they’re the Canadians struggling the most.

When it comes to student debt, women are usually talking about student loans used to pay for education. But many women also graduate with credit card debt and/or a maxed-out line of credit.

It’s not a comfortable place financially. Fortunately, there are solutions.

How do I manage my student loan debt?

If you’re managing to make your payments but are feeling squeezed, start by taking another look at your budget. If you don’t have a budget, create one. A budget really is an excellent tool that works if you stick to it.

Consider how you can reduce costs.

Do what you need to do to free up or make more cash each month so making payments isn’t so stressful (shop off-brand, cut a service or subscription, etc.). Then focus on paying off the debt with the highest interest. Read more about the debt avalanche method of debt repayment.

Getting out of heavy debt isn’t easy, but it is doable on your own. It might help you to connect with other women’s stories of paying off student debt. You can learn more about four female bloggers who broke free of their personal debt on our Oshawa BDO website.

What if I can’t afford to make my student loan payments?

See whether the Repayment Assistance Plan (RAP) is an option. Through RAP, you can get your monthly student loan payments reduced — sometimes down to zero — for a limited period of time.

To qualify, you must reside in Canada, have graduated or left school at least six months ago and have kept your loans up to date (no missed payments).

There’s also the Revision of Terms Plan, which allows you to lengthen the amount of time it takes to pay off your loan’s principal and interest by up to 15 years. Your monthly payments will be lower but you’ll pay more in interest.

Can I include my student loans in a bankruptcy?

A consumer proposal or bankruptcy may be an option for paying off or eliminating student debt, but not until you’ve been out of school for seven years. There may be other avenues available to you. The best course of action is to talk to a Licensed Insolvency Trustee (LIT). An LIT can analyze your situation and help you decide how to proceed.

Stress over student loans and other debts makes it more difficult to focus on building a great career. It’s common to have questions about your student debt. Take steps now to get answers to those questions and act on what you learn — you’ll breathe easier. Just remember that there are debt solutions, no matter what your situation.

Is student debt stressing you out? What are you doing to deal with it? Tell us your story on Twitter. #LeaveDebtBehind #WomenAndMoney #Students



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