As is the case every year, each September, the media swarms with new stories questioning the value of a university education. It's an especially touch topic this year—even if the Globe maintains that university is the surest path to a career—because, in the wake of this summer's Quebec student protests, the questions swirling around education intensified: Are we saddling a generation with unpayable debt? And if so, how does a generation pay for that debt?

This led us to a column, published last May, by Linda McQuaig, the Toronto Star's excellent (if incindiary) columnist. The column addressed the protests—an issue that's been well-debated in the last few months—but she also wrote this:

"High tuition... enables our establishment to keep students on a tight leash, focused on getting into professional or business schools (where they'll have some hope of repaying their debts) and keeping clear of courses that might teach them to question prevailing othodoxies and mindsets."

If McQuaig's correct—and we suspect she is—that's effin' bleak. It's a reality for the rapid-shrinking middle class and the ever-swelling lower classes: Education isn't about pursuing dreams, goals, or intellectual pursuits. Who can afford those anymore? Is the only option, as McQuaig notes, going into professional or business schools—out of necessity? And, when it comes to student debts—which 60 per cent of student possess—is it worth it? Our Laura Manuel explores the issue. -Mark Teo

It is a frequent refrain: a post-secondary education is the key to a professional job. And a professional job should be one’s ticket to saving a nest egg, purchasing a home, perhaps starting a family, and saving for retirement.

Students, for the most part, tend to be comfortable financing their post-secondary education with loans; they are told that this is ‘good debt.’ Yet today’s graduates are facing difficult decisions when it comes to managing their money and career.

A frightening reality

Nearly 60 percent of Canadian post-secondary students graduate with some form of debt, and the average Canadian graduate owes tens of thousands of dollars. It’s a debt that can tie your hands, holding you back from moving onto the next stage of your life.

Meet university graduate Jordan Stanley from Nanaimo, British Columbia. He’s well educated but paralyzed with debt. Two years after graduating from Thompson Rivers University with a tourism degree, Stanley went back to school. “I was having trouble finding a well-paying job in the tourism field, and my student loan payments were difficult to manage on my monthly income.” Stanley returned to school to study accounting, taking on more student debt. With over $50,000 in student loans, he now feels immobilized when he considers his career. “I have been forced to take jobs that I really didn’t want because I need to pay back my student loans. The jobs that I have taken have usually not been in the area that I wanted, or even in the firms that I wanted to work for.

At Wilfred Laurier University Career Centre, career advisors confirm there is a trend in how students approach their career search. “Anecdotally speaking, we would say with debt increasing, students are more apt to take the first job that comes along versus investing energy, volunteer time, and more money on additional credentials to pursue a more lucrative paying career. Students have a sense of urgency to just pay the bills, and that means obtaining ‘a career’ becomes second to getting ‘a job’ to pay their debt.”

The numbers speak

In the fall of 2010, the Canadian Council on Learning (CCL) released a report about the long-term consequences of student debt. According to the CCL, the average debt for university graduates doubled between 1990 and 2000. Today, the average debt for university graduates is $26,680, while the average for college graduates is $13,600. The report also found that the proportion of students graduating with student debt increased from 49 per cent in 1995 to 57 percent in 2005.

These high debt loads are impacting the career choices of graduates. There is evidence that current post-secondary students are keen to secure a career with the government or work in the not-for-profit industry. But these aspirations may evaporate when graduates, like Jordan Stanley, are faced with a large student loan and juggling day-to-day living expenses.

Erin Mills, senior research analyst with the CCL, agrees. “Some [graduates] may re-consider their career choice, particularly in the event of poor wages.” The CCL’s report also found that large student debt affects more than careers. As Mills explains, “Graduates who had borrowed were less likely than non-borrowing graduates to have retirement savings and investments, and were less likely to own their own homes.” Stanley confirms that he is part of the group that Mills refers to, admitting that he’s had to put off buying a house. “I have no savings for retirement.”

Is it worth it?

While student debt increases, the outlook is still optimistic for new graduates. According to the University of Alberta’s most recent employment survey, those with a postsecondary education are likely to secure better paying jobs in the long-run. The key is to avoid a haphazard approach to attending college/university. A post-secondary education is an investment. And, like any serious financial investment, a strategic approach is best.

Bronwyn Rice, student aid administrator at McGill University, encourages students to approach their education with an investment-like strategy. Rather than get bogged down in loans that may be misdirected, Rice advises students to carefully examine and plan for their education, finances and career. “Students need to be realistic about their postgraduate earning power relative to their level of education — underestimating that could be dangerous,” explains Rice.

The career advisors at Wilfrid Laurier University echo Rice. They encourage students to consider their reasons for pursuing a post-secondary degree. Before embarking on additional education, they suggest that you do effective occupational research. This way, you can assess whether or not a degree/diploma is worth the time and money.

Sometimes, the post-secondary education road is not the best fit for an individual. Taking a year or two off to think about one’s education and finances is a sign of wisdom, not foolishness. “Once a student has calculated the cost versus the resources available, it may indeed come to light that suspending studies is a better option than going into more debt,” says Rice.

Managing Student Debt

For many students, financing their education with loans is a given. The key to having student debt is effective management. Rice suggests making a budget of monthly expenses, and accounting for where borrowed money is spent. She also stresses that government student loans are superior to bank loans, credit cards or lines of credit. “All Canadian government guaranteed loans are interest free for the student while they are [studying] full time. With all programs there is also a possibility of loan forgiveness should the student finish their studies within the prescribed time frame, so the overall debt could be reduced.”

Don’t underestimate other sources of financial support, either. Rice advises students to consider other methods of financing their education: savings, part-time work, scholarships/grants, and family support. They can help decrease the amount you need to borrow year after year, and much of it you don’t need to pay back.

Tracy Watson from Money Mentors, an Alberta-based credit counselling organization, warns that young graduates are often not aware of how much debt they have accumulated. She recommends writing out a list of debts including student loan payments, credit cards, and any other debts such as car loans. This way, you can have a clear picture of how much you owe and when it is due. Watson encourages new graduates to seek help if they are having difficulty managing their debt. Credit Counselling Canada is an organization that can assist graduates. Often, free credit counselling is available.

Looking Forward

Rice maintains that “Higher education is surely worth the cost.” The key is to apply a strategic approach when taking on student debt. And, if necessary, have the courage and wisdom to take time off from pursuing higher education to re-evaluate one’s strategy. This way, debt can be kept to a minimum and easily managed when you embark on your shiny, new career. Stanley admits that in retrospect he might have done things a little differently. “I think I would have definitely tried harder in my classes and applied for more scholarships and grants than I did. jp