CTV News published an article on September 2, 2022, asking Canadians if student loan debt should be forgiven. This question was posed right after U.S. President Joe Biden announced that his administration would provide up to US$20,000 in student loan “forgiveness” for 40 million low-and middle-income borrowers.
As Canadians, why should this conversation matter, especially when average tuition costs for Canadian citizens at post-secondary institutions within Canada are significantly lower than in the United States? The Canadian government has almost $20 billion in outstanding debt from 1.9 million borrowers. On average, students graduate with more than $13,000 in debt by the time they are 24 years old. This amount does not include additional provincial or private loans such as lines of credit, credit cards, or loans from family and friends.
In reality, student debt is becoming a growing crisis. In 2018, student debt contributed to more than 1 in 6 bankruptcies in Ontario alone. These statistics do not include the additional financial hardships brought on by the COVID-19 pandemic, the rising cost of student housing, or the gig economy.
In 2013, the Government of Ontario granted free tuition for up to four years to former Crown wards and youth aging out of care at all universities in the province and one-third of colleges. They would also provide an additional $500 per month to cover these young people’s living expenses. This initiative is significant considering that, in most cases, youth in care cannot rely on the support of their families to supplement basic needs such as food and shelter. Most students who are Crown wards cover day-to-day costs by using a credit card, bank loan, or student line of credit. Like other students who rely on these sources, this increases their average debt from $13,000 to almost $44,000 by the time they graduate, which amounts to an additional $31,000 of incurred debt compared to their peers.
So, how can we address the student loan debt incurred by youth who were formerly in foster care, particularly considering the complexities of how this debt is accumulated? We can start by gaining insights from people like us with lived experience.
Karen’s Story
My name is Karen Naidoo. I became a Crown ward a month before my 16th birthday. I was considered “lucky,” since I was “only” in a youth shelter for three weeks before being funneled into an all-girls group home on Christmas Eve. However, before this, like many other young people with similar experiences, I became adept at avoiding the foster care system.
My experience of youth homelessness and avoiding foster care was not about breaking free of parental control. Rather, my mother’s severe mental health condition made living at home impossible. The challenges of receiving holistic care for mental health in Canada coupled with the stigma surrounding mental illness broke familial relations. This left my single mother in isolation, relying on self-treatment as her main source of care. The echoes of my mother’s mental health struggles continue to be felt in the lives of her children.
At the age of 19, when I was precariously housed, I became my 9-year-old sister’s primary caregiver while trying to begin a university degree program and working multiple jobs.
Under provincial and federal student loan regulations, my pre-2013 student loans of $50,000 became $70,000, despite my financial literacy. So, should I have this debt forgiven or should I continue to struggle with building a life under the strain of student loan debt? This situation continues to be exacerbated by a childhood shaped by my mother’s mental health, youth homelessness, and familial responsibilities.
Elaine’s Story
In order to mitigate poverty across generations, completing K-12 and postsecondary education is essential. Yet, for students whose lives are shaped by systemic class inequality and inequity, student loans are a nightmare. I’m Elaine J. Laberge and I have experienced intergenerational poverty. I know about student loans from my own lived experiences and through my research in higher education. Poverty, homelessness, and housing precarity reverberate across generations and can shape an entire life. While I was not a Crown ward, I became a homeless youth in rural Alberta.
Although I was financially savvy, nothing prepared me to understand how student loans work and how provincial and federal interest rates would financially devastate me while living on my post-college poverty wage. I am one of the 1.9 million borrowers who were thrown further into poverty because I sought higher education. Fast-forward to my research on the poverty in higher education in Canada, and it quickly became apparent that Karen’s and my stories are not mere anecdotes.
Student loans are seen as the great equalizer, particularly in relation to obtaining a university education. However, this fails to take into consideration a very messy piece of the higher education financial puzzle: social class. To escape poverty, students from a poverty-class background too often find themselves buried alive in student loan debt, despite their best efforts. Our education can take longer than middle- and upper-class students’ because we often have to juggle other survival tactics, like working multiple jobs. Our education is constantly interrupted by our daily realities.
This is all compounded daily when other social characteristics are factored in, such as being a single parent. For example, in my masters and doctoral research, I found that single mothers faced staggering daycare costs that directly impact student loan debt. Additionally, female students continue to face gender disparity in their wages and a glass ceiling based on class. The implications of student loan debt for those of us from poverty are debilitating. To demonstrate, these levels of student loan debt, ranging from $50,000 to $100,000, mean that home ownership, a game-changer when you have lived experience of homelessness, is a cruel fantasy.
The Higher Education Paradox
Our society bemoans the fact that poverty-class people and/or people with lived experience of foster care and youth homelessness may need to lean on social supports. Yet, when we access higher education, we too often end up far worse off. We need education to, at a minimum, mitigate poverty and homelessness yet when we end up poorer because we seek higher education, we become a further entrenched so-called burden on society.
As I have said in my research, Canadian society leaves us in a double bind. We are hated if we rely on welfare and other social supports, yet we are denied access to and full participation in higher education, which directly impacts our full participation as citizens.
Our Call to Action
Imagine what the societal costs—and benefits—would be of forgiving the loans of students with similar lived experiences to us. Below, we outline 7 calls to action:
- Recognize that student loans do not level the higher education playing field.
- Treat education as an imperative to mitigate poverty across generations.
- Respect that the impacts of foster care, youth homelessness, and poverty last a lifetime.
- Create equitable student loan systems by revamping provincial, territorial, and federal student loan systems through an intersectional lens.
- Educate marginalized students on how current student loan systems work.
- Broaden access and participation initiatives for students with lived experiences of foster care, homelessness, and poverty in ways that do not have a devastating financial impact.
- Treat education as a human right that is imperative to mitigating poverty across generations and allowing all social classes to participate fully in addressing society’s challenges.