PENTICTON, BRITISH COLUMBIA--(Marketwire - Aug. 22, 2012) - Figures released last week show almost 60 per cent of post-secondary students who take out a student loan expect to graduate owing more than $20,000 - a daunting figure for those heading back to class in the coming weeks.
"Education is not cheap," says Jason Andrews, an investment specialist at Valley First. "We've seen tuition costs steadily climb in recent years. Couple that with the increasingly competitive job market and student debt becomes a real issue."
According to Statistics Canada, the average undergraduate pays more than $5,300 in tuition per year. Compounding that cost is the added expenses of textbooks, rent, transportation and other living costs, leaving many students wondering how they can realistically afford to finance their education.
"Some students are fortunate enough to get financial help from their families," says Andrews. "But, for the majority, that is not an option. The only real way to pay for university and all its associated expenses is to work part-time or take out a student loan, which most students do with the expectation of securing a job in their chosen field."
Having $20,000 in debt hangs over your head - only 44 per cent of students believe they will be able to pay off their loan within five years of graduation. However, as Andrews explains, there are options that can help ease this debt burden.
"Take, for example, a couple with children they want to help put through college. With the 20 per cent return on contributions via the Canadian education savings grant, they may choose to divert money to and benefit from the tax savings associated with a registered education savings plan.
"The advantages here are two-fold, the 20 per cent return on contributions and the building of an education fund for the future."
Valley First also offers a number of scholarships for its young members who are pursuing further education at Thompson Rivers University, UBC Okanagan and Okanagan College.
Beyond the purely financial aspects of debt, Andrews also says owing a large sum of money can hinder young people at a time when they are striking out on their own and striving for independence.
"A few dollars is your back pocket goes a long way toward achieving financial and personal independence," says Andrews. "I always tell people, it's never too early or too late to speak to a financial advisor. At Valley First, we have many experts that can help people at all life stages put together an achievable financial plan."
Valley First is a division of First West Credit Union, B.C.'s third-largest credit union, which has 37 branches and 29 insurance offices throughout the Lower Mainland, Fraser Valley, Kitimat and Okanagan, Similkameen and Thompson valleys. Led by Launi Skinner, First West has approximately $6.6 billion in assets under administration, more than 169,000 members and close to 1,400 employees. For more information on Valley First, visit valleyfirst.com.