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2013 BMO Student Survey: Canadian Students Relying Less on Family to Finance Higher Education

- Students expect to graduate with $26,297 in debt and predict it will take 6.4 years to pay it off

- More than half of students use loans to finance their post-secondary education

TORONTO, ONTARIO--(Marketwired - Aug. 13, 2013) - According to the 2013 BMO Student Survey, Canadian students expect, on average, to graduate with $26,297 in debt and expect to pay it off in 6.4 years. Furthermore, the survey showed that students are relying less on their parents to finance their education.

According to the Canada Student Loan Program, most students take nearly 10 years to pay off their loans - with some taking the maximum 14.5 years.

Student debt expectation $ 26,297 $ 30,725 $ 13,180 $ 29,520 $ 28,296 $ 27,334 $ 34,886 $ 22,465 $ 30,210

The annual survey, conducted by Pollara, also revealed:

  • Compared to last year, students are relying less on the 'Bank of Mom and Dad' than in 2012 - down eight per cent (44 per cent versus 52 per cent)
  • They are less likely to depend on their own savings (58 per cent versus 62 per cent) and more likely to rely on loans (55 per cent versus 49)
  • Those in B.C. anticipate accumulating the most debt ($34,886) and students in Atlantic Canada expect to take the longest to pay down their loans (7.6 years)
  • Women believe they will accumulate more debt than men ($30,210 versus $22,465) and predict it will take longer to pay it off (6.9 versus 5.9 years)

"It's prudent to think about your repayment plan before you graduate, as it can be easy to underestimate the amount of debt you will accumulate or how long it will take to pay it off," said Janet Peddigrew, Vice President, BMO Bank of Montreal. "Consider sitting down with a financial professional who can help assess your current debt situation, provide you with a clear understanding of how it affects your overall financial picture and help you start building a detailed plan for paying it off after graduation."

Feeling the Pinch

The survey ranked the top sources of stress among post-secondary students:

  • Finances (28 per cent) continue to be the number one stressor, followed closely by achieving academic success (24 per cent) or finding a job after graduation (24 per cent)
  • Students in B.C. say they are the most stressed about their financial situation, while students in Quebec are the least (36 per cent versus 15 per cent)
  • Female students are more likely to report being stressed than their male counterparts in all of the top stress categories
Sources of stress 2013 2012 ATL QC ON MB/SK AB BC MEN WOMEN
Paying for school 28 % 27 % 32 % 15 % 34 % 20 % 28 % 36 % 21 % 35 %
Achieving academic success 24 % 22 % 18 % 12 % 27 % 28 % 32 % 28 % 18 % 29 %
Finding a job after graduation 24 % 20 % 28 % 12 % 34 % 12 % 28 % 19 % 20 % 28 %

BMO offers the following tips to help make student life more affordable:

Take advantage of "student status": Seek out discounts and promotions available to students. For instance, the no-fee BMO SPC credit card provides discounts at hundreds of retailers and restaurants across Canada and offers a choice of CashBack or AIR MILES reward miles.

Minimize banking fees: Take the time to do research and learn ways to save money and cut costs on banking fees, such as choosing a no-fee bank plan. BMO offers students free banking and is the only bank to extend this offer for an additional year after graduation.

Limit interest costs: Consider using a lower-rate option to help cover expenses during school. The BMO Student Line of Credit, for example, charges interest only on what is actually borrowed and allows students to make interest-only payments while in school and up to one year following graduation.

The 2013 BMO Student Survey was conducted by Pollara. Survey results cited in this report are from online interviews with a sample of 602 students enrolled at a post-secondary institution this fall, conducted between July 19 and 26, 2013. As a guideline, a probability sample of this size would yield results accurate to ± 4.0 per cent, 19 times out of 20.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $555 billion as at April 30, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

For further information:
Media Contacts:
Jessica Park, Toronto
(416) 867-3996

Ronald Monet, Montreal
(514) 877-1873

Laurie Grant, Vancouver
(604) 665-7596

Twitter: @BMOmedia