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Is My Schooling Worth It?

It seems as though the phrase “best years of your life” is synonymous with university life. Between living independently, having a reduced schedule, and being around new people from all over the world, that statement rings true for many. College allows for a lot of freedom, part of which involves choosing your field of study. However, this decision isn’t one and done. Once you’re done with your undergraduate degree, what’s next? Student debt, specifically student debt based on degree, is the topic for this edition of Meg’s Corner.

I’m coming into my final year at McGill, and like many third and fourth-year students, I have been thinking constantly about what comes next. This thought process comes in a stream of seemingly unanswerable questions – what about law school? Should I get a Master’s? What if I become a doctor? Is my Bachelor’s enough? Should I even go back to school? What’s the point of another degree? All this has led myself and many in my position to one unbelievably underwhelming answer – it depends.

“Do-I-Don’t-I” crisis aside, the financial aspect of graduate school is increasingly notable in Canada. The longer you’re in school, the more it costs – and the price of attending university is only increasing. As education becomes steadily more expensive, student loans are becoming more appealing to young people looking to finance their degree. Yet by the time they cross the stage at graduation, they may very well find themselves in a hole of debt.

Of course, university education is a requirement for a lot of very attractive jobs. Education is also a privilege and a tool for furthering your own knowledge and contributing to society at large. This fact also lends itself to the rising standards of many firms for individuals to not only hold a post-secondary degree, but a graduate degree as well. Firms are paying more for people with specific educational qualifications. So why is there such an issue with student debt in Canada?

In researching for this piece, I came across a Statistics Canada study that highlighted the variation of salaries from one degree level to the next across different fields. In all fields, a Master’s degree will earn you ~12% more income, on average, than a Bachelor’s. Comparatively, holding a PhD results in a ~7.5% salary increase from your Master’s. Breaking that down, we see that Master’s degree holders in BHASE fields (business, health, humanities, arts, social sciences, and education) earn almost 17% more than they would with a Bachelor’s, while STEM professionals only see about a 3% salary increase with a Master’s.

You can go down the wormhole of what-will-earn-you-more statistics (I’ve put some links below), but regardless of what you study, there’s the common denominator of student loans. A 2018 report states that Canadian students owe nearly 28 billion dollars in loans, with 489,000 full-time students taking a loan in the 2014-2015 academic year. This is an astronomical figure that will pale in comparison to future generations of Canadian youth as tuition fees and costs of living inevitably increase. With the average student debt figure currently hovering in the mid twenty-thousands, it’s clear that the more education you pursue, the more debt you accumulate. What’s draining students further is the element of time: the more time in school, the less time working for pay, and the more your debt becomes a burden.

While higher education will afford you a better salary, it also may require a lot more to be given up. This is exemplified in my own situation: despite my work with PennyDrops, I myself am – believe it or not – not in finance. I’m not even in a Bachelor of Commerce program. I’ll graduate next year with a Bachelor of Arts, which, while I have loved every minute of my program and have been afforded many opportunities, puts me at a statistical disadvantage with regards to student debt. In reaching the career I desire, I will have to obtain another degree. I’m happy to do this – I love school and am passionate about my field, but I know that this requires a greater financial investment and delays my entry to the workforce.

This edition of Meg’s Corner is not all doom and gloom. It’s not meant to discourage anyone from pursuing another degree, or a major they couldn’t care less about just for the sake of money, or university at all. But it does highlight a main theme that I believe is the crux of what we try to teach all PennyDrops students: make informed decisions. Student debt may be rising in Canada, but with proper education on the type of loans, the resources (such as scholarship programs) available to students, and an objective, critical look at the paths one can take to pay off debt in a timely and responsible manner, we are working towards a better financial future for all.