What Is the Average Student Loan Debt in Canada? 19 Statistics About Student Debt

Written By
I. Mitic
Updated
August 12,2022

A student's life might seem fun and cruisy, but it comes with plenty of expenses. In order to attend college or university, most students have to rely on student loans to cover the high costs of tuition, housing, and school supplies. But what happens after they graduate and have to start repaying those loans?

Back in 2015, the average student loan debt in Canada for holders of bachelor’s degrees was around $28,000 per debtor, according to a report by Statistics Canada. This number has been increasing over the years, and it doesn't seem like the trend is going to change anytime soon.

In this article, we’ve compiled some statistics that shed light on the student loan debt crisis in Canada.

Editor’s Choice

  • More than 1.7 million Canadian students have a student loan.
  • The total value of student loan debt in Canada is over $22 billion.
  • The average national student loan interest rate is 2.5%.
  • Medical students in Canada have the highest average debt load: $84,172.
  • The average loan recipient is 24 years old and female.
  • In 2019, almost one in five insolvencies in Ontario were caused by unmanageable student loan debt.
  • 74% of students who need to borrow money take out government-sponsored loans, while around 30% - including those with multiple sources of debt - go for private loans.

General Student Debt Statistics

With the rising costs of tuition and other education-related expenses, it's no surprise that student loan debt is on the rise. Below, we'll present you with some of the most telling student loan debt statistics so that you can gain a clearer insight into the problem.

More than 1.7 million Canadians have a student loan. 

(Government of Canada)

According to data gathered for the Canada Student Loans Program statistical review, there are over 1.7 million Canadians who owe money on student loans. Student debt in Canada, as statistics indicate, is burdening an ever-growing number of young people.

A total of 608,000 students received government student loans in the 2019-20 academic year.

(Government of Canada)

In the 2019-20 academic year, 608,000 students received student loans from the government of Canada. The total amount borrowed was $3.4 billion, which is a 4% decrease from the previous year. If you work out the figures, the average amount borrowed per student was a steep $5,674, which contributes to the accumulated student debt in Canada over the course of a degree.

The total amount of student loan debt in Canada is over $22 billion. 

(Canadian Federation of Students)

According to the Canadian Federation of Students, the total amount of student loan debt in 2022 in Canada is a whopping $22.3 billion. The federation suggested a series of measures to help ease the student debt burden, including a reduction in tuition fees, financial support for Indigenous post-secondary institutions, and increased mental health support. 

The average student loan debt in Canada at the completion of a bachelor’s degree was around $28,000 per debtor in 2015.

(Statistics Canada)

The figures indicate that, on average, each debtor owed some $28,000 back in 2015. In 2010, the average debt load was slightly smaller: $26,300. However, compared to their American counterparts, Canadian students typically have it a bit easier. That’s because the average student loan debt in the USA is almost $40,000 (which is around 51,000 CAD).

In 2021-22, tuition fees for Canadian students are projected to total $6,693 for the year, up 1.7% from the year before.

(Statistics Canada)

As if the average student debt in Canada wasn't high enough, tuition fees are projected to increase in the ongoing academic year. The average tuition fee for a Canadian student at the end of the 2021/2022 academic year is expected to reach $6,693. The figures show that the total education expenses has risen 1.7% compared to the year before. 

This might not seem like much, but it can make students seek a solution such as debt consolidation loans to make their monthly payments more manageable.

The average national student loan interest rate is 2.5%.

(Reviewlution)

If we focus on government-backed programs, the average interest on student loans in Canada is somewhere around 2.5%. These loans come with an optional grace period, during which no interest accrues on the loan.

However, the exact interest rate will differ depending on the type of loan and the year it was taken out. Government loans are charged upon graduation, while with private loans, the repayments start right away. Private student loans usually also have higher interest rates.

Demographics: What Does a Typical Borrower Look Like?

The statistics on the average student loan debt in Canada wouldn't be complete without depicting a typical loan recipient. Here's our take on who they are and how they are dealing with their obligations:

More than half of students who receive financial assistance attend universities.

(Government of Canada)

In the academic year of 2019/2020, 56% of full-time students who were granted a loan were attending universities, accounting for some $2,950.7 million of the total financial assistance. A group of 44% of respondents was attending colleges. Finally, a minority of the recipients, some 12%, were enrolled in private post-secondary institutions. 

Medical students in Canada have the highest average debt load at $84,172.

(AFMC)

The average medical school debt in Canada is a steep $84,172, roughly three times the national average of $28,000 per student. This makes medical students the most indebted of all. 

This is likely caused by a combination of high tuition fees, a longer-than-average degree, and the need to take on extra debt to cover the costs of living while attending school (students in less intensive courses may be able to earn money through part-time work while studying). Bearing in mind that the total cost of medical education in Canada may exceed $100,000, it’s no wonder that many medical students struggle with their finances.

The average age of loan recipients is 24, and most of them are female.

(Government of Canada)

The 2019 to 2020 Canada Student Loans Program statistical review revealed that the student debt crisis disproportionately affects young women. At the time, the average age of loan recipients in Canada was 24, and 60% of them were women. 

More than half of debtors are single and do not own a home.

(Hoyes)

When profiling the debtors, the National Graduates Survey found that more than 56% of those who borrowed money for educational costs are single. Married or common-law graduates make up for around 28% of all debtors, while the other average Canadian students who have debt are divorced, separated, or widowed.

Another interesting finding is that only 2% of respondents own their homes, which means that the vast majority are still renting or living with their parents.

Undergraduates make up the majority of students who are receiving financial assistance for their studies.

(Government of Canada)

In 2019-20, full-time undergraduate students comprised the largest group of recipients of student financial assistance in Canada. They accounted for 58% of all full-time students who received some form of student loans in Canada, receiving some $3.02 billion in financial aid. 

The second largest group was graduate students (36% of all full-time students), who received $1,762.4 million in aid. Doctorate students accounted for only 1% of the recipients of Canada Student Grants or Canada Student Loans.

PhD students have more debt than those with lower levels of education.

(Statistics Canada)

Studies reveal that people’s level of education typically plays a role in the size of their student loans. PhD students in Canada had student loan debt of $33,000 on average in 2015. This was followed by master’s and bachelor's degree recipients, with an average debt of $28,000 each. College students owed an average of $15,300 for their education from any source (government or non-government).

Paying Back Student Loan Debts

Now that we’ve identified the typical borrowers and how much they owe on average, it’s time to focus on the process of repaying these debts. We’ve compiled relevant statistics on repayment terms and periods, as well as the financial struggles that different types of debtors face.

Thanks to the debt-relief program, government loans are now more favourable for borrowers.

(Government of Canada)

You might be wondering: how do student loans work in Canada when it comes to repaying debts? Well, the federal government has put in place a number of repayment assistance programs. The “seven-year rule,” for example, is intended for those who declare bankruptcy and are unable to repay their debts within seven years of finishing their studies.

In that case, the government will write off the remaining debt. This makes government-backed loans more favourable for borrowers.

Due to accumulated student loan obligations, Canadian millennials prioritize paying off debts over other financial goals.

(Edward Jones)

A recent study has shown that Canadian millennials prioritize paying off their debts over other financial goals, such as saving for a rainy day or retirement. This is mainly due to the large amount of student loan debt they’ve accumulated over the years. The average millennial has a median debt of $35,400, 1.8 times higher than the average debt of Canadian Gen-Xers, which can take years to pay off.

In 2019, almost one in five insolvencies in Ontario were caused by unmanageable student loan debt.

(Canadian Federation of Students)

In 2021, the Canadian Federation of Students compiled a factsheet named "Education Shouldn't be a Debt Sentence," which showed that in 2018, a significant portion of insolvencies was caused by unmanageable student loan debt. 

Compared to the previous decade, the figures were record highs, further highlighting the harsh reality of an indebted and vulnerable population of graduates entering the Canadian job market.

The average time it takes to pay off student loan debt in Canada is 10 years.

(TD Canada Trust)

According to a TD Canada Trust report, the average time required to pay off student debt is 10 years. These figures are based on the assumption that students make the minimum payments and do not take on any additional debt. The repayment period can be even longer if students take a break from making payments or make less than the minimum payment each month. 

The three-year default rate for borrowers who started making repayments in 2017-2018 was 8%.

(Government of Canada)

The Government of Canada examined data illustrating the student loan default in Canada and found that the three-year default rate for those who started repayments in 2017-2018 was 8%. This means that, of all the people who had to start making payments on their student loans in 2017-2018, 8% had not made a payment in over three years. Of those people, the largest group were graduate students (13%).

Private Loan Statistics

Private loans and lines of credit make up a small but growing portion of the overall student loan debt in Canada. We'll take a closer look at how students who borrow from private financial institutions deal with their debt.

74% of students take out government-sponsored loans, while around 30% - including those with multiple sources of debt - go for private bank loans.

(Statistics Canada)

Even though the government offers more favorable terms, the more expensive Canadian private student loans are required by nearly a third of all borrowers. Among them, those with higher-level degrees are most likely to borrow from private financial institutions: 41% for those with master’s degrees, 42% for those with PhDs, and 55% for professional degree holders.

Students who choose to finance their education with the help of private lenders can expect higher interest rates, which makes it more challenging to pay off their debt. 

In 2015, the median debt for those who had taken private bank loans or lines of credit to pay for professional degrees was $59,994.

(Statistics Canada)

The National Graduates Survey published in 2018 compared the average student loan debt in Canada of students who borrowed from government and private financial institutions. They found out that the median debt for those who used government-backed loans to pay for professional degrees was $25,596, while the median debt for private bank loans or lines of credit was $59,994. 

The figures indicate that graduates who borrow money from banks end up owing significantly more than those who use government-sponsored loans.

Final Words

As the statistics above show, we're witnessing a growing trend of graduates borrowing money from both government and private financial institutions. The crisis is reflected in the number of graduates struggling with their debt, as well as in the default rate, which is slowly but surely rising. 

With an average college student loan debt in Canada of $28,000 per debtor, high tuition fees, and an average pay-off time of 10 years, it's essential to stay on top of your student loan debt and create a solid plan for repayment.

FAQ

How much of a student loan debt is normal?

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As there is no set definition for "normal," the answer to this question varies. In general, most students can expect to graduate with at least some debt, as the cost of attendance for many colleges and universities is higher than what can be covered through scholarships, grants, and other forms of financial aid. 

The total student loan debt in Canada is around $22 billion, shared among more than 1.7 million borrowers. The average student loan in Canada that a borrower owes is just over $28,000. These figures can help you get a sense of how your student loan debt compares to that of other borrowers in Canada.

Do student loans go away after 7 years in Canada?

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If you declare bankruptcy seven or more years after you graduate, your student loans will be discharged (forgiven). However, this is not the only way to have your student loans forgiven. You may also be eligible for loan forgiveness if you are unable to make payments due to a long-term disability or if you work in certain public service jobs. 

Despite the government's recent changes to bankruptcy laws, declaring bankruptcy is still one of the most difficult and stressful ways to have your student loans forgiven. 

How long does it take to pay off student loans in Canada?

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The average repayment period for student loans in Canada is 10 years. However, this does not mean that all borrowers will take 10 years to repay their loans. The length of your repayment period will depend on the amount you borrow, the interest rate on your loan, and your chosen repayment schedule. 

What is the average student loan debt?

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In 2015, the average student loan debt was $28,000. With higher tuition fees, this number is only growing. As the cost of attendance continues to rise, it's important to be mindful of the amount you borrow and to create a solid plan for repayment. The average student loan debt in Canada reflects the crisis in the educational system.

Sources

About author

For years, the clients I worked for were banks. That gave me an insider’s view of how banks and other institutions create financial products and services. Then I entered the world of journalism. Fortunly is the result of our fantastic team’s hard work. I use the knowledge I acquired as a bank copywriter to create valuable content that will help you make the best possible financial decisions.

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