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The Black Hole

Student loans

BY BETH | DEC 04 2010

Student loans. They are sort of the dirty little secret among grad students. Not something people generally like to talk about, because having student loans means you weren’t good enough to have won the big scholarships that the other grad students were able to use to sustain themselves through undergraduate and grad school. And that you weren’t in a lab that was well-funded enough to pay you a salary ((something that was quite common in my department)). But I can assure you that student debt is an issue that affects people during grad student life and beyond.

Of the students who graduated in 2005:

  • 54% of undergraduate students had some student debt
  • 46% of Masters graduates had some student debt
  • 44% of doctoral graduates had some student debt

(Source: Statistics Canada)

Although I did have some scholarships during my doctoral training, they weren’t enough to pay my tuition fees plus live in an expensive city like Vancouver. And after your fourth year you become ineligible for most scholarships, despite that fact that most people don’t finish their PhDs by the end of their fourth year. So it was back to needing students loans – in combination with TAships and other jobs – for years 5 and 6.  Combined with the amount of student loans I owed from my undergraduate and Masters ((as the Masters I did was a 1-year coursework and project Masters, which made me ineligible for even TAships, let alone scholarships)), and we are talking a very sizeable student debt – in my case, $70,000 ((before you yell, “How on earth could you rack up that much student loan debt?!”, as I’ve had others react this way before, consider that I was in school for 11 years, only 4 of which I had sufficient scholarships & TAships & other jobs to cover my tuitions fees and living expenses. So that’s $70,000 over 7 years or $10,000 per year – and with my undergraduate tuitions fees in the late 1990s in Ontario at about $5,000/year, you can see how $10,000 per year is pretty minimal!)).  We’ve talked before about how low post-doc salaries are – think about the ramifications of taking a postdoc with a $35,000/year salary (before tax) when you owe twice that amount in student debt.

Another issue related to student loans are the interest rates you pay on them. Currently you can get a mortgage in the range of 3% and finance your new car or couch for less than that – but I’m paying 5.5% on my student loans.  Student loans in Canada do come with a few advantages – your interest payments are tax-deductible and if you find yourself out of work (which is entirely possible in today’s job market), the government can provide you some interest relief until you get back on your feet. But I really think we need to question why the interest rates on student loans are higher than to those to buy a car, if we truly want Canadians to become educated and be part of the “knowledge economy.” And, of course, with better funding for both undergraduate and graduate students, we wouldn’t have nearly half of those completing graduate-level eduction already behind the eight ball financially.

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  1. Peter M., OCT / December 4, 2010 at 17:18

    I agree. For every dollar invested in education, you get at least 2 back when the recipient joins society and contributes.
    But this is not just a Science issue (at least there were TA-ships and Labs to offer work for pay).
    A buddy did his P…hD in Music Composition, and has $100,000 debt and a $35,000 salary (or less) living in Toronto, and not even a post-doc job related to his field to pay off those debts with the high interest rates. His school didn’t have any way to make money while at school, so he had to go to banks and personal loans.
    Wouldn’t less students default if they only had to pay back what they got, not what they got plus interest?
    And in the big picture, wouldn’t that money (since politicians blow wads of cash on socializing alone with other governments on a scale that I can’t even fathom) even be “well spent” on those who were educated but do nothing else with their education but pass on the drive and higher learning to future generations?
    Don’t we want a smarter, better, more thinking future generation? Or do we instead want to follow the Wal-Mart wage part-time wage slave model (just so we can get all that great, cheap junk from China?)
    Sorry to blog on your post. I see the early stages of this trend. I wish I could make more of a change, so instead I sow the seeds of political awareness and dissent, and hope they take ground somewhere!

  2. Catherine / December 5, 2010 at 00:55

    Hi. I agree that the interest rates are silly.
    There are a few students that wreck it for others. I was lucky enough to be in a well-funded department during my PhD so everyone had minimum ($18K) stipends – yet there were students who took out loans to live like non-student friends. So their student loan money was going to trips to Mexico and clothes. They thought I was silly to not ‘take’ the money because it was so easy to get. These students can really destroy sympathy for the majority of students who really need the loan money for survival.

  3. Girlpostdoc / December 5, 2010 at 02:21

    I have student loans in Canada but work in the USA. The tax deduction doesn’t help me at all. It would if I planned on returning to Canada, but I’d have to find a tenure track position – fat chance. If I had to do it over, it would be a very different road.

  4. SubC / December 5, 2010 at 21:38

    Considering how little resources are used by PhD students (very few classes) and how much they contribute (as RAs and TAs), the universities should seriously look into waiving tuition for PhD candidates. Maybe they can pay tuition for the first 1 or 2 years (by the second yr, courses would be done) and then become tuition-free !
    As for girlpostdoc- you are not serious, right? Did you really expect to get tax benefits in a foreign country based on your Canadian student debts???

  5. Girlpostdoc / December 6, 2010 at 00:07

    No I didn’t expect to get tax benefits in a foreign country – I was simply responding to the idea that interest payments on student loans as a tax credit is a benefit to incurring student loans. This is only true if you are working in the country that you trained in. There are far more jobs in the States than there are in Canada – and so it is unlikely that I will end up in Canada. Thus, I will never gain any benefit from that tax credit. Factor in that I live on a postdoc’s salary in a country where health care is not free. I make very little take home income. Ultimately, incurring student loan for me, was not in my long term financial best interest. I had to do this all again, I doubt that I would do the PhD.

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