Your debt and you: together for the long haul?

Graduates on floaties
 Illustration by Kendra Yee

Written by Frankie Barnet

Student debt. Chances are you’ve heard of it. The average law student in Canada graduates with nearly $72,0001 in student loans. In Ontario, the number’s even higher at $83,000.2 

Numbers that big feel abstract for many people when they first apply for the loan. After so many zeros it doesn’t matter how many more there are, you just sign and wait for the future you to handle it. You know, the version of yourself who’s, like, accomplished and stuff. They’re used to dealing with things like this. And they probably have great hair.


The most common advice you’ll find (and have probably heard a thousand times) is simple: you just pay it back. Make small monthly payments over several years while scaling back on things like Starbucks runs, solo-living, or Friday night cocktails. And though you might be scratching your head at the thought of four-dollar coffees somehow adding up to $70,000, it’s true that most seemingly insurmountable problems become manageable when we break them down into smaller steps. One hand-me-down winter jacket here, one rain-checked Cancun vacation there, and your money really can accumulate faster than you might think. 


However, depending on your income and lifestyle, it might not feel like there’s much you haven’t already cut down on. Take those, for example, with children, or who take on financial responsibility for their parents. Maybe you work a lower-paying job that doesn’t afford any exotic vacations to begin with.

If you find yourself in danger of missing a payment, more dramatic solutions do exist, though they’re not one-size-fits-all. 

For example, it may be possible to negotiate the interest rates on your student loans, though you’ll likely be limited by the type of loan you hold. If your debt is in the form of a line of credit, for example, you may be able to negotiate directly with your bank. Canada student loans also allow a bit of interest rate flexibility: you have the option of using the default (a floating interest rate that varies over time) or locking in a fixed interest rate of prime plus one. But once you’ve made your choice, there’s no going back on it as long as you hold the loan. 

With Canada student loans, you can also lower your monthly payments by extending your pay-back schedule to 174 months (that’s 14 and a half years!). By the time you’ve paid it back, your loan will be a teenager–resenting you as much as you resent it. While the thought of a payment plan that lasts longer than most Canadian marriages3 may not give you butterflies, an extension can be a good option if your budget is tight, since the last thing you (or your credit score) want to do is miss a payment.

It’s also worth noting that large sums of cash—an inheritance or annual bonus, for example—can make a considerable dent when put towards loan payments. As well, your income tends to increase the longer you’re in the workforce, meaning that payments that might feel oppressive in our late twenties become less of a burden as we earn more in our thirties and forties. 


Somebody started lending it to you/ you didn’t know what it was/ now you continue paying it forever just because? 

If the sheer magnitude of your debt still feels more like a waterfront Selling Sunset property than something that you could ever be responsible for, don’t worry, you’re not alone. 
The issue of student debt is becoming a hot-button issue here in Canada and in the United States—and rightfully so, as more and more young people postpone home ownership, starting a family, and even the ever-elusive not suffering from debilitating financial anxiety because of their student debt. 

Loan forgiveness is the solution you might see most often on yard signs and bumper stickers, but many experts agree this option isn’t politically feasible—at least in the short term. Besides, federal loan forgiveness wouldn’t include relief for private loans. Most law school graduates have a mixture of both. Which isn’t to say that structural solutions to student debt don’t exist or won’t be found in the future. It’s a massive, complicated problem but the good news is that people are talking about it. Stay tuned to this column to learn how student leaders and law associations across the country are contributing to that conversation.

For today, though living with debt may be a fact of life for many new graduates, you deserve to have a say in how it affects your life both personally and professionally. Deciding how you want to manage your debt is the first step in preventing it from managing you. 

We can help

Student debt can feel overwhelming—but you can manage it with a plan. Get practical advice about repaying your loans, investing in your future, and making a budget that leaves room for living. Book a free 30-minute financial planning session now. 

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Frankie Barnet lives in Montreal and is the author of An Indoor Kind of Girl

Sources: 1. Canadian Lawyer: “The Debt Burden,” August 2018. 2. CBA National Magazine, “Escaping the Weight of Debt,” by Zach Shaver, October 2019. 3. “Divorce Rates in Canada” by Mark-John O’Nions, November 2018