You’ll remember that useful senior high school course you took about the dangers of the illusory economics of debt and credit cards.
You probably don’t remember it because either it didn’t exist or even if it had, it didn’t help because according to Statistics Canada, you and millions of Canadians have racked up total household credit market debt of a tidy $1.892 trillion, with mortgage debt being $1.234 trillion of that.
Debt may have become a feature of Canadian life, but debt can also be a crippling load for post-secondary graduates and Canada’s economic future.
Today, tuition fees in Canada are at an all-time high. According to Statistics Canada, the average tuition alone for an undergrad degree is $6,500 a year, plus the added costs of books, school supplies and residence.
“It’s not the tuition fees [alone], it’s also the fact that you have to live somewhere for eight, to nine, to 10 months of the year while you’ve got no money coming in,” says Donna Mihalcheon, senior vice-president at BDO Debt Solutions.
This can and does lead to an economically crippling situation that, on the one hand, sees 70 per cent of “new” jobs demanding a post-secondary university or college education, which too often goes hand in hand with the assumption of significant debt and no real guarantee of a salary-producing job at the end of it all.
As one example, for students looking to make a career in public education after four to five years of post-secondary education, the good news is that the job-busting decline in B.C.’s student population has levelled off from the declines of the late 1990s.
The not-so-good news is that the nine teacher-education programs in B.C. graduate about 3,300 new teachers every year. In rough numbers, that means that there are still as many as two to three teachers vying for every full-time permanent teaching position.
In strong contrast, many occupations that are expected to continue to face labour shortages are in health-related and natural and applied sciences occupations.
Higher health-care needs, mainly due to population aging, will increase demand for several health-care occupations.
In 2016, Health Match B.C. reported 656 positions available for physicians on their website. Of that number, 443 of those were for general practitioner placements.
About 15 per cent of the B.C. population still cannot find a family GP.
To exacerbate the situation, hundreds of family doctors in B.C. are expected to retire in the next five years, raising concerns about the province’s ongoing shortage of family practitioners.
Even so, according to University of B.C. Medical School statistics, admissions remained, as of 2014 at least, at about 288.
Similarly, according to the Canadian Nurses Association, the number of registered nurses working in B.C. is up slightly, according to a new federal report, but the number of nursing school graduates is dropping.
Again, early retirements from a incredibly demanding job factor in.
The net result, according to a recent Angus Reid poll, is that financial security, rather than career goals, is becoming the No. 1 consideration for many university students in B.C.
Many B.C. university students emerge from the sheltered halls of academia to find themselves anywhere between $10,000 and $30,000 in debt with no job in sight, finding themselves having chosen the wrong career path to financial security, sometimes because of enrolment limitations.
Predictably, in the absence of any serious secondary school education in matters of money management, there are even some students who, unaccustomed to having sudden access to significant amounts of money through their student loan, neglect to use the money for paying their tuition fees.
Clothes, shoes, technology and entertainment once thought unaffordable become tempting, and students fall into debt early because of readily available credit with minimal requirements.
The net result is that students, unaware of the long-term financial consequences, miss credit payments or default on loans altogether.
In 2017 alone, the federal government, for the second year in a row, wrote off student loans it will never collect to the tune of $178.4 million.
It might be long overdue for some serious secondary-school-level guidance in two areas; money management and reality checks on post-secondary career choices.
It might also be time for universities, like retail business, to maintain currency with market research and correlate admissions planning with mid- and long-term career forecasts in this rapidly changing world of employment opportunities.
Geoff Johnson is a former superintendent of schools.
