Monthly Archives: September 2012

Are Student Loans Immoral?

Posted on by
Reply
Recently a professor at NYU wrote an article on student loans while covering a wide variety of issues related to these loans. Whether or not loans could be technically classified as immoral is another story but student loans and debt are definitely crushing and a burden for many years. Are student loans immoral? I don’t think so, but the hikes in tuition and the astronomically large debts students face after university/college are a handicap when trying to start off a life after completing school. Also the current generation faces a lot of factors, but the most important thing to do is to keep track of your debts and be responsible with the money you do have  during your time at university.


“I have concluded that it is immoral to expect young people to privately debt-finance a basic social good like education, especially if we are telling them that a college degree is their passport to a livelihood that is increasingly thin on the ground.” -Andrew Ross, NYU Professor

 

Differences between Canada and the United States
Most often I find that a lot of articles are written about the student loan/debt crisis in the United States and this is often reflective of their astronomically expensive tuition fees. In Canada we are slightly blessed because of our government run institutions in that there aren’t any for-profit universities with the main goal of getting your money versus educating you. Certain provincial governments to provide relief in terms of student loans and many students do benefit from them, which helps to pay for quite a bit of tuition and room and board. Just to compare tuition fees in the US versus the University of Guelph this may provide a bit of perspective on the differences between the United States and Canada right now. Some state run universities have lower tuition than NYU, this was just the school that the professor who wrote the original article taught at.

University of Guelph
Tuition for 1 Semester (Arts & Full-Time Canadian)
$3534.99
4-Year program (without inflation and not including any other fees)
$28,279.92

NYU, In-State-Fall 2012
$20,439
4-Year program (without inflation and not including any other fees)
$163,512

Just by calculating that, I can fully understand why students in the United States are struggling especially in situations where they come from families that aren’t completely loaded. The debt can add up, but it is the same case with university students in Canada and student loans are still something that Canadian students struggle with as well.

Check out Debt-ridden and unemployed: We are the class of 2012 for a more Canadian perspective

  • Nearly 60 per cent of the class of 2012 will graduate with student debt, 26,480 in Ontario on average
  • More than 10% of people enrolling in Canadian college’s will have previously completed a bachelor’s degree
  • Half of Canadian’s in their 20’s live at home, 73% between the ages of 20-24


Rising Tuition Costs in Canada
In terms of tuition fees across the country and for Canada as a whole you can view these statistics here for the 2011/2012 school year (last year)

There are a few trends occurring, and as a University of Guelph student I quickly noticed the huge increase once again in Ontario’s tuition rates (approximately 5%) which is higher than Canada’s overall change for the year, lucky us. Throughout the last 4 years that I have attended university I have seen a fairly significant increase in my tuition fees and most often I get to find out my new tuition fee when I check in August, it isn’t significant but it is increasing.

Starting Tuition (Fall 2009)
$3665.22
Current Tuition (Fall 2012)
$4003.78

% Change= 9.23% and I still haven’t even finished my degree

On a year by year basis it doesn’t seem significant but I’m losing about $800 this year, funny how the OSAP 30% credit is that amount…At least the provincial government has stepped in and provided some relief for students.

Unfortunately for most career fields that students want to head into, the expectation is that you at least have a bachelors degree which could leave you at least $30,000 in the hole before you head out. OSAP helps students in Ontario but we are still forced to pay it back and pay a pretty hefty interest rate after graduation.

My tips for those who have been required to take out OSAP loans and other loans on top of that;
-Keep track of all that you owe the banks, the government, parents etc. you are going to have to pay them all back at some point but certain loans will have much higher interest than others, and those are what you should most likely focus on first and keep track of.
-Search in all ways possible to get some sort of scholarship, bursary etc. If you apply to OSAP you are likely to qualify for OSAP related bursaries.
-Don’t be ashamed of your debts, its highly likely that everyone else you know is in a similar situation, talking about it with others may help you strategize better in paying them off
-And on top of that, be thankful you don’t go to NYU :)

Image

Starting the School Year Off Right

Posted on by
Reply
It’s easy for spending to get really out of control within the first weeks of school. You need to buy a gym membership, stock up your house with groceries, want a new desk and several other purchases to get you off and running. Make sure to think about these points and keep thinking about them throughout the semester.
Make a Budget
  • The most important thing that you can do right now is plan and make a budget for your month by month spending. It’s also very important for this budget to be realistic, so you can stick to it. If you are an avid spender don’t set completely unrealistic spending goals for yourself.
  • Based on the money you made during the summer or the money you still have left make sure you have enough for the essentials; food, rent, and utilities. After you have figured out that you have enough funds to cover these expenses that’s when you can figure out the rest; clothing, alcohol, money for going out, trips, additional food that you don’t actually need etc.
Some Tips
Make sure to take into account increased utility bills in the winter months when the weather is colder and heating will increase.
Stick & Follow Through with the Budget
  • Making the budget itself may seem challenging, but the most difficult part is actually following through with the budget. Throughout the first month especially, it is crucial that you write down and record your spending in order to be able to tally it all up at the end of the month.
  • At the very least make sure to do a bi-weekly (half way through the month) check of your budget and see if you are on track. Are you spending too much on groceries? Scope out better sales and make better use of your grocery dollars and even try finding some coupons online.
  • At month’s end, tally up all of your purchases and check to see if you met your goals. Were they realistic? Do some numbers need to be decreased? Do some numbers need to increased? Don’t do this every month, but the first month is your trial run make changes after this month that make the most sense financially and based on your spending habits, then the budget for later months should be more concrete.
Keep Up to Date on Your OSAP Loans & Other Student Loans
  • Since you probably just received more loans or additional student loans to pay for tuition this semester, make sure to check the amounts owing to either OSAP, banks, your parents etc. Keeping that in mind may also keep spending in perspective, if you owe $15,000 in OSAP does that extra pair of heels make sense if you don’t really need them?
  • Additionally make sure to check if you qualify for the tuition rebate of $800 a semester through OSAP. I remember seeing somewhere that over 80% of students that could qualify for the rebate didn’t even apply. You don’t have to pay this money back unlike OSAP, it’s a bursary that requires no repayment, it’s free money that can help take a load off tuition or rent. Make sure to take advantage of this.
  • If you are no longer receiving OSAP loans, make sure you go an fill out a form to keep interest free status (and avoid paying interest until after you graduate). This can probably be done at Student Financial services at your university.
Hopefully this gets you thinking about your finances and how you can better keep track of them over the Fall semester and beyond. Remember, you’re a student, it’s very unlikely you have a ton of money so please don’t spend like you do.
Source: Image