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The student debt crisis in Canada is hitting harder than ever, and one thing is becoming clear: young Canadians need more financial education before they take on loans.
A recent survey shows that over 97% of Canadians believe that young adults should receive better guidance about loans before borrowing.
This statistic is shocking, but it’s only part of the bigger picture. Rising student debt is forcing many to question if they were ever properly prepared to manage their financial futures.
The financial strain on graduates
Today, Canadian graduates are leaving school with an average of $28,000 in student loan debt, and for many, that’s just the beginning. This debt often takes decades to pay off, and many young people struggle to make ends meet.
Joshua Harris, BComm., MIB, CIRP, a licensed insolvency trustee at Harris & Partners, explains: “We’re seeing a growing number of graduates who simply can’t get ahead financially because of their student debt.
“Without better financial education early on, many don’t understand how long they’ll be dealing with their loans and how it impacts their overall financial health.”
A lack of understanding about loan terms
Even though loans are easy to get, financial education can be hard to find. Only 46.3% of respondents knew what their minimum monthly payment would be after graduation, and 34.5% didn’t even know if their student loan carried an interest rate.
These numbers indicate a massive gap in financial literacy among young Canadians, a gap that contributes to poor financial decision-making.
Joshua Harris emphasizes the importance of understanding these key details before borrowing: “If students don’t know what they’ll owe after school or how interest will impact their payments, they’re being set up for financial failure.”
“It’s a vicious cycle,” Harris adds. “Students go to school hoping to secure a better future, but they end up trapped by the debt they didn’t fully understand. It’s frustrating for them, and it’s avoidable with the right education.”
What needs to change?
The clear demand for better financial education highlights a major gap in how we prepare students for the financial realities of adulthood. Schools, governments, and financial institutions all have a role to play in closing that gap.
“We need to start teaching financial literacy much earlier,” Harris suggests. “Students need to understand what borrowing really means before they sign any paperwork. And once they’re in the loan process, there should be more transparency—students should know exactly what they’ll owe and how long they’ll be paying it back.”
