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Debt Trap Illustrations by Rialda Dizdarevic

Debt Trap

For many students, taking out loans is a rite of passage. It’s just not clear what’s waiting for them on the other side.

I met Noël Patten on the first day of music school. “What do you play?” I asked her. Piano, she said. Me too. We kept finding each other in our other university classes: theory, history, musicianship. I slopped around in baggy sweatshirts, flannels and jeans. It was 1996 after all. Patten always seemed more professional, almost like she was ready for a performance at any moment. 

As we moved through our degrees, neither of us wanted to perform, though. We hid in the back rows of our classes, took notes, called each other at 2 AM the night before an essay was due. I promised I’d try to break her fingers with a hammer the day before our piano juries if she’d do the same for me. 

We lifted weights at lunchtime in the University of Calgary rec centre and bought pizza buns for $1.25 after. We made our friend Phil teach us guitar. On Friday nights, our other pal Calvin drove us in his ancient gas guzzler to the bowling alley or a free concert in a downtown church. 

Patten and I are tail-end Gen Xers; our birth dates put us in between the optimistic twenty-somethings of the nineties and underemployed millennials. Key to that upbringing was our understanding that we wouldn’t get anywhere in life without a degree, and we had boomer parents with middle-class aspirations who underscored that messaging. Constantly. So off to university we went, after years of over-achieving in the public school system and building the required credentials to secure admission. 

For both of us, university could only be a reality if we took out loans. We dutifully filled out our multilayered carbon paper forms and sent them off, receiving just enough to cover the tuition and textbook expenses—for me, in the vicinity of $3,000 per year—and when we needed it, more for rent and living expenses. 

To supplement, I worked cash at a grocery store and Patten ushered at the university theatre. I was lucky enough to live at home, but she was renting a house with her sister and other roommates near the university because her parents lived out of town. We didn’t think about it much back then, but it was normal for me to discover I only had 78 cents in my bank account, or to be stranded at the bus stop in a –35 Celsius blizzard and have no alternate way to get to my midterm.

My recollection of that time now thoroughly confuses me. Was I working class? What did I expect, exactly? I certainly had middle-class aspirations: a full-time job (in the arts, at that), perhaps home ownership and eventually a car. Student loans were a given, but they were a debt that was considered “good,” and could easily be paid off once we sailed into secure jobs. We had no way of knowing that twenty-five years later, we’d still be in debt from our undergrads. 

My upbringing was within a fairly conservative context—Calgary, the 1980s, the suburbs—which served to constrain my thinking on one hand and liberate it on the other. That contradiction is perhaps the fundamental crux of class aspiration: a craving for certainty and stability while yearning for the allure of difference, of standing out. 

Yet as I aged through my twenties into my thirties, I felt like the only thing that was making me different from others was my insurmountable debt. Everything else held up as a promise for my future had fallen away. Debt-free friends and peers moved on to achieve those markers of middle-classness, but Patten and I spun our wheels, with the awful recognition that we might never be free of our burden. It would take us years to realize we weren’t the only ones struggling.

Canadian student loan debt is a big problem, reaching about $22 billion in 2020. About 1.8 million borrowers across Canada owe student debt, and it takes the average borrower between nine and fifteen years to pay it off. The current fixed interest rate for federal student loans is prime plus two percent. That means, on a typical government loan of $30,000, a student can expect to pay an additional $7,223.12 over ten years. These statistics worsen for professional degree holders, master’s and doctoral students, and graduates in all health-related fields. 

The student loans system in Canada is overwhelming, fragmented and disorganized. Loan distribution is shared between the federal and provincial governments and banks, and managed by third-party extensions of both levels of government. Provincial loans vary dramatically across the country, and once their limits are reached, the federal portion of a loan kicks in to cover the rest of what’s needed. Repayment can be confusing when you are dealing with three parties and three separate loans. These parties don’t always communicate with each other, and they set different requirements for managing your repayment schedule. 

The post-secondary granting system—a batch of funding given, rather than loaned, to students—operating alongside loans is also complex. While loan eligibility is determined by family income and living expenses, grant eligibility is determined by many additional factors, including potential parental support, applicants’ marital status and dependents, medical conditions, tuition fees and living expenses. A frustrating component of the application is the expectation that students will voluntarily assume a life under the poverty line.

This is especially true in larger cities, where rents have climbed sharply over the last twenty years. In 2019, the maximum monthly living expenses amount allowed for an Ontario student sharing a unit with a roommate was $1,246, a figure that allows for $600 in rent plus $646 in other expenses, per month. That year, the average cost to rent a two-bedroom apartment in Toronto was $2,868 per month. 

Clearly, as evidenced by the cost of rent alone, living expenses have far outpaced the allowances recognized by loan policy. Christine Neill, an economist at Wilfrid Laurier University who specializes in post-secondary education and student loan policy in Canada, notes that living cost allowances, which vary across provinces, can lag years behind reality. “The last increase in how much you could borrow [in Canada] was in 2004. It’s been a long time. It should be indexed to inflation, or at least go up every decade or so,” she says.

Then there’s the matter of skyrocketing post-secondary tuition. Patten and I were on the cusp of an era when tuition caps were lifted; between 1991 and 2016, tuition increased 263 percent in Canada. This was the result of the federal government reducing social transfer payments to provinces in the early nineties. Provinces, in turn, cut university budgets and hiked tuition fees accordingly. While tuition fees are occasionally frozen temporarily, provinces have raised them consistently over the last three decades.

According to a 2017 report from The Canadian Centre for Policy Alternatives (CCPA), “In the past fifteen years, revenue from student tuition has tripled, public student debt has ballooned, and working conditions for campus staff have deteriorated ... these changes have also happened while public funding for colleges and universities has dropped in dramatic terms.” Students who have been marginalized, including BIPOC students, those with disabilities, LGBTQ2S+ students, student parents and international students, are more likely to be affected by climbing fees. The ongoing gender pay gap also affects the burden of debt carried by women graduates.

The student debt many people acquire while participating in this system has long-term, negative effects on graduates’ family planning, food security, housing security and financial stability. A 2013 study out of Northwestern University showed student debt has debilitating effects on physical and mental health. Debt has also been linked to depression, anxiety, suicidal ideation and substance abuse. I often wonder if my own gall bladder surgery in 2013 and cancer diagnosis in 2016 were somehow tied to the stress of constantly fielding student loan centre phone calls and collections threats. 

Still, in order to get a job in Canada, a post-secondary degree is more than advantageous. Many job postings require one, even if they’re for contract or otherwise precarious jobs. This casualization of labour isn’t an accident. It’s the result of decades of policy shifts designed to preserve the wealth and power of an increasingly influential few. 

The American-Canadian cultural critic Henry A. Giroux says conservative right-wing parties on both sides of the border have sought to restructure the university by undercutting faculty and treating students as consumers. This shift, he argues, aims to see graduates leave school not as critical thinkers challenging systems of power, but shaped by the university’s decision to “reduce the function of higher education largely to training students for the global workforce.” 

 Since the eighties, Canada Student Loans (now called the Canada Student Financial Assistance Program) has offered what it calls a “grace period,” in which former students are not expected to make payments, nor do they accumulate interest, right after they graduate. While this is a good way to kickstart repayment, the compounding interest that starts building six months after they leave school forces many graduates, like myself, into making minimum payments while their balances balloon. 

The federal grace period also does little to alleviate whatever changes individual provinces might make, such as the Ontario government’s decision to eliminate interest-free periods on the provincial portion of loans in 2019. The government’s cuts to government assistance, lower qualifying income thresholds, and decreased subsidies for low-income students were devastating for students, even with a 10 percent cut in tuition. 

All of this has led to an untenable situation. Students are trapped in a cycle of getting degrees that are not as valuable on the market as advertised by institutions. In Ontario alone, the proportion of workers earning minimum wage has increased fivefold since 1997. In order to advance their careers, many graduates return to school for additional training, ending up in a never-ending cycle of taking out loans, finding low-paying or no work, building interest, defaulting on their loans, and potentially returning to school again. I know because I did it, and it’s unsustainable. This debt load isn’t only bad for the economy, it’s also destroying us. If we don’t do something soon to ease the burden, debtors are going to collapse.

I graduated from undergrad in 2000. On the day of my graduation, I was fretting over paying my rent, which at the time was about $300 per month. Job prospects in my field were scarce, so I returned to school part-time to do a few more courses in preparation for grad school. That year, I worked full-time at my grocery store job. I also applied for a second job at a bookstore. After the group interview, the only applicants who were hired were the ones with degrees. We made about $6 per hour. By this point, my student debt hovered around $25,000, but at least I had no credit card debt or bank overdraft. 

But those balances started to accumulate when my master’s degree took me from Calgary to Edmonton. Rent more than doubled, and school was too busy to take on a proper job. I worked assistantships at the university and took on two jobs over the summer months, but by the end of that degree my debt balance had ballooned to $40,000.

During my master’s, most of my advisors said a PhD was only advisable if I planned to teach down the road and I really enjoyed the research I was doing. Since I did, I headed to York University to study ethnomusicology in 2003, taking out, on average, $8,000 per year in student loans for five years.

Patten came to Toronto the same year as me. We were in a constant state of panic with our higher rents, tuition increases and general inflation in cost of living, even though we both had assistantship positions and occasional scholarships to help us. I took on part-time work wherever I could, at clothing stores, radio stations, beer warehouses—and by 2006, I had started teaching occasional one-off courses to supplement my income. Throughout the next couple of years, I worked at my dissertation, planning to complete the degree as fast as I could. 

In wasn’t a good time to graduate in 2009, nor the few years following. Austerity was the preferred term of the day, tossed around casually by everyone from schools to governments to businesses. Those of us who were scrambling for work received stern warnings to be grateful if any scrap was tossed our way. 

About ten months out from graduating, I started receiving frequent calls from the National Student Loans Service Centre (NSLSC) because I was unable to start repayment. These callers always seemed baffled by my case. I was still in school, finishing my PhD, and officers couldn’t understand why I was still attending. We went through the same routine each time they phoned: I explained the stages of PhD completion, they argued it had been “too long,” even though I was coming in under the average time for doctoral degree completion. 

I suppose I should have been angry at the regular intervals at which they called. Yet I was deeply embarrassed. Why hadn’t I worked harder, or faster? Why hadn’t I earned enough to pay my way through? The calls signalled an impending realization I haven’t shed to this day: I was a failure. I wasn’t making much money. My remaining contract as a teaching assistant was on hold because our union was on strike. We were making $200 per week if we did full picketing shifts. I used the opportunity to also finish my dissertation so I could get out of there, and, I thought, get a job. 

What our union, but no one else, was telling us was that we were facing an employment desert. That particular strike was focused on the casualization of university labour, which had become the norm rather than the exception. And labourers’ thirst works to universities’—and all employers’—advantage. We fought over crumbs while universities used the recession to justify hiring freezes and the virtual elimination of tenure-track jobs. 

Meanwhile, tuition had grown. Between 2008 and 2012, it increased at a rate of over 3 percent per year, while inflation moved at less than half that. By 2012, 115,464 borrowers received loans in Ontario, nearly twice as many as in 2008. That same year, about thirteen percent of borrowers across the country were defaulting on their loans from the Canada Student Loan Program (CSLP). 

In my case, I was becoming eligible for a new federal program called the Repayment Assistance Plan (RAP), introduced in 2009, which would essentially buy me time while I finished my degree on a low income. Designed to rescue the most economically vulnerable from the burden of repayment, the program allows borrowers under certain income thresholds to have the interest paid down by the government in six-month stretches. 

Neill characterizes RAP as the best option to solving a widespread problem. “If you’re on the RAP for five years, you don’t pay interest. Longer than that, [the government] starts paying down your principal as well.” Gradually, over the course of fifteen years, student debt is forgiven.

As helpful as it might be, RAP has some flaws. One is its income thresholds. Until 2021, when it was raised to $40,000, a single borrower was only eligible if they made under $25,000 per year. It also didn’t account for the vagaries of gig work. If you made $5,000 one month, then $0 for the following four months, which I often did, it was difficult to convince officials you couldn’t remain in repayment. Most importantly, whether you make $41,000 or $200,000, you are on a repayment schedule that disregards your living costs; as such, you could be making minimum payments for years while living virtually in poverty, watching the balance grow exponentially with interest.

I defended my dissertation in December of 2009 and was nominated for the university dissertation prize. This seemed like a distinguished recognition I could leverage in the job market, but within a few months I was working as a cat-sitter for $11 per hour and applying to grocery stores once again. 

While RAP was great for reducing default numbers and easing graduates’ transition into the workplace, it also allowed the government to obscure the reality of student debt. By 2003, defaults had reached a peak of 28 percent across Canada. The rate fell to around 9 percent by 2018, but when those borrowers defaulting were combined with RAP users, it turned out about 42 percent of borrowers in Ontario were unable to repay their loans. (Sixty-five percent of RAP users at the time were women.) By 2018, a report revealed that 18 percent of insolvency filings in Ontario included student debt, up a whopping 38 percent since 2011. Essentially, graduates were sitting on their debt, unable to make payments, while racking up other consumer and bank debt, leading to bankruptcy. 

The explosion in numbers in 2018 was the decade-long fallout of the recession. If you claimed bankruptcy during the first seven years after your repayment began, it was unlikely your student loan debt would be forgiven. But if you had started school in 2008, came out at the end of 2011 or 2012 with debt, and couldn’t find enough work to repay it, by 2018, you could be claiming bankruptcy.  For about twenty-two thousand people across Canada, it was the only way out. 

Patten vaguely considered bankruptcy as a possibility for her, especially as her debt accumulated in graduate school. Like me, she returned to school to improve her job prospects, first in a women’s studies graduate program, later moving on to midwifery and nursing. She’s now completing a PhD through Western University in nursing, researching nursing care for women after intimate partner violence. 

Her debt—a combination of student loans and a line of credit—currently hovers somewhere around $110,000. She found out as she began struggling with repayment that insolvency wasn’t in the cards. That seven years out of her most recent time in school hadn’t passed for her because she had returned to school a couple of times to upgrade her qualifications.

Patten was paid $12,000 per year for her last research job, as she completed a program with tuition fees of $7,500 per year. She applied for the Ontario Graduate Scholarship (OGS) program and won an award of $15,000 per year up to a four-year maximum for doctoral students. But almost as soon as she got the good news, she found out it was being revoked. The reason? Her pre-existing debt. “[The OGS office] tried to stop me from getting it, every year, and I fought them,” she says. Three out of four years, she won. The fourth year, she was put on a waiting list.

“The rule they told me is: if you’re maxed out on your student loans, you can’t borrow anymore.” Patten had reached her maximum amount with her previous studies. However, OGS isn’t “borrowing.” It’s a scholarship. “I was no longer eligible for funding that comes from the government because I wouldn’t be allowed to get more student loans. They are saying you aren’t allowed to get that merit-based scholarship because it’s government money, and you’re maxed out.” In other words, she was being punished for holding debt.

My friend Varuna Prakash is thirty-three years old and grew up in Hong Kong and India. Her parents own a solar-powered farm in India, and they moved Prakash and her brother to Canada when she was fourteen in hopes of securing them a North American education. Prakash earned two degrees in engineering before she entered medical school. Her fascination with internal medicine has since landed her positions in various ICUs, including at the Toronto General Hospital. She was on a near debt-free path until medical school, as she’d paid off her loans and received several grants and scholarships.

Medical school is a different proposition, though. Tuition ranges widely, from $3,600 per year in Quebec up to $28,000 per year in Ontario. As soon as Prakash arrived for her first term at the University of Toronto, students were given financial seminars and courted by the top banks, all of which offered lines of credit that would extend into “major life events” like buying a house and car. They “catch a customer at the very start of their training, because then they’re likely to stick with you for a lifetime of physician earning,” she says. 

One hang-up in the system is what medical trainees refer to as the golden handcuffs. “Once you graduate from med school, you’re kind of tied to the field, because the only way you can make enough money to quickly pay off your debt is to continue in the same profession,” says Prakash. She tells me this is felt most acutely during residencies, when trainees are most likely to burn out. At this point, they’re so far in debt that leaving the field is no longer an option for those who want to. “It’s very much a real phenomenon and figures into a lot of people’s decisions on whether or not they stay in medicine,” she says.

Medical students do benefit, however, from reduced interest.  “Doctors and dentists have access to student loans at basically prime minus a quarter point interest. But we’re on the complete opposite end of the spectrum because we carry huge, huge student loans,” says Prakash. When she completed medical school, she held about $130,000 in debt. 

Now in her fifth year of her residency, she’s paid off about 60 percent of that debt by working as much as she can. This is asking a lot of an ICU fellow in the midst of a pandemic; the last time I talked to her, she mentioned taking locum spots (temporary fill-in positions for other doctors on leave) wherever possible, which were beyond her regular full-time duties. 

Prakash considers herself a “big personal finance nerd” and has multiple spreadsheets on which she monitors her student loans, dividing expenditures by “wants,” “needs,” and “nice to haves.” Her occasional days off from the hospital are permeated with this kind of busy work, a somewhat soothing activity focused on a part of her life she can control. 

We compared how we had been charting the interest accumulation against our projected income, re-inputting numbers obsessively until we got satisfying results. It’s something I’d do every time I made a payment, but for most of the duration of my repayment period, those were typically around $300 or $400. Against a balance of its peak $80,000, or $55,000, or even $20,000, each payment felt pretty futile.

Last year, I told Prakash how stunned I’d been by the interest on the federal portion of my loans when I began to pay them back. It’s a figure I now also show my students in class as a brief lesson on compound interest, even though I teach music classes. I figure, why not. I’m a good cautionary tale—forty-three years old, still renting, no car, not much in savings. Besides, they’re not getting this lesson anywhere else.

Amount Owing: $56,000

Remaining term: 174 months

Monthly payment: $437.34 (nearly $200 of this minimum payment was going to interest.)

Cost of borrowing (i.e. extra interest over the 174 months): $20,096.85

Prakash was as enthralled as I was about how to change that interest figure. What could we get away with, reduce, in order to pay as little interest as possible? We talked strategy: lower cell phone bills (mine is $45 per month), turn the heat off, cut any existing subscriptions, share internet with the neighbours, buy exact amounts of bulk food, shop at the fruit market instead of major chain stores, do all exercise with free YouTube videos instead of paid classes. We have both cut our own hair, which saves me about $150 per year.

Like Prakash, I’m into frugality and do-it-yourself fixes that keep us from over-consuming. It takes a toll though. I often spend hours bent over the sewing machine repairing jeans, or harvesting and drying the products of my balcony garden, instead of visiting my friend and her baby after work. Around 2015, I vowed to never buy a lunch or coffee again, and dedicated Sundays to pre-preparing a week’s worth of food. Extended errand trips to various shops with bulk and cheap foods have to be planned in advance. Weekends are primarily dominated by this domestic work, which never lets up.

Still, this is an individually oriented response to a systemic problem. If student loan interest is so debilitating that we refuse to buy new sweaters or we let our boots leak as we walk through rain and snow to get to work, then what is the ultimate cost of pursuing post-secondary education?

Around 1993, I took the required Health and Life Skills course in high school, during which we were given an egg to carry around for a week or two. If we didn’t break it, we were permitted to acknowledge our potential to be good parents. Our school was across the street from the grocery store where I worked, and we also spent a class pricing out weekly groceries for a nuclear family of four. Life planning, they called it. 

They didn’t teach us how dried beans and lentils are cheaper forms of fibre than fresh produce, or that no-name versions of products were no different from name brands. That you can live on a jar of peanut butter for a couple weeks. We also didn’t learn about loans or how compounding interest in any form can destroy you financially.

Looking back, doesn’t it seem odd that we were taught how to take care of egg “children,” but not manage our bank accounts? Yet debt has become a major factor in deciding whether to have those imagined kids. I should not have found out about compound interest by watching reality shows about couples who spend too much, or searching for finance books on my own. It should have been a fundamental part of my education.

Prakash doesn’t see her debt as a reason to not have kids; she was already planning a child-free life before she went to medical school. Patten and I were mostly on the same path, but if we had hedged at all in our consideration of children, one look at our loan balances would have immediately set us back to no-kids status. By the time we were thirty-five years old and having to seriously ask that question, we collectively held nearly $200,000 in debt and had yet to find full-time work. We lived in one-bedroom apartments. Raising children was out of the question. 

Helen Johnston, my partner’s sister, has a slightly different story. Johnston’s new place in Halifax has two floors plus a basement. It’s more spacious than the last one, which was only the squishy main floor of a shared house. This place has room for her eleven-year-old son Vince to play outside and have friends over. The whole family seems happier there, where Johnston was teaching fifth graders from home on and off last year via Zoom.

Johnston’s parents, a pharmacist and a teacher, paid for her first degree in sociology. “I feel very blessed. [University] was something I just assumed other parents could do for their kids too,” she says. “The message was that undergrad was given to us and then [anything else] would be on us.” After graduating from Dalhousie University in 1999, she worked as a server in Halifax’s harbourside restaurants through most of her twenties and met her husband on the job. 

As she worked in the service industry, she upgraded to an education degree. Johnston was making, back then, a pretty safe assumption: a teaching job would allow her to sustain the middle-class position her parents had given her. It made sense to borrow against that future. She left school the second time in 2008 with $24,000 in debt, the result of those three years of classes.

Her son was born in 2010, just as she was starting her teaching career. Maternity leave set her way back; the hours she’d banked as a supply teacher were wiped out, meaning she had to start from zero when she returned. When she was pregnant, she worked about one hundred days on a long-term sub. She says she needed more hours to qualify for maternity leave, and had to go on unemployment through the government. She returned to supply teaching and precarious contracts, working restaurant shifts alongside them while she raised Vince. Johnston finally took a permanent teaching position in 2021, thirteen years after getting her teaching degree.

Now, after following her father’s path of being a teacher, she makes $3,400 per month and is deep in a backward class slide. It’s not enough to live on—their rent alone is $1,500, never mind utilities, a car, groceries, and Vince’s school expenses. Debt is considered after all of that is paid, which means she’s making minimum payments for the most part. 

As a result, Johnston has started school again, taking extra education certification courses through Cape Breton University. Completing them will take about two years, after which she’ll be eligible for a pay bump. “I feel like I don’t have a lot of choice but to go back to school,” she says. Her employer will cover a portion of her course fees, but she has to pay for them up front, meaning more debt in the form of a $10,000 line of credit.

She still owes $11,000 on her student loan and is currently just making interest payments while she focuses on reducing her other debt. The interest keeps growing. “Even by getting rid of the interest alone ... at least you could just have that [base] number in your head and could just pay down the principal all the time,” she says. She tries not to think about it too much. “My happiness and mental health—I have to just kind of move forward. But I’m going to owe that debt when I’m sixty.”

There’s no way on this trajectory that Johnston will be able to save for Vince’s post-secondary education, which is creeping up quickly in just over six years. She’s still paying off her own. The realization is a shattering one: multiple generations under one roof, smothered by student debt.

Free post-secondary education seems to be far down the list of priorities when we look at the social safety nets that require immediate attention: subsidized daycare, our collapsing health-care system, or long-term care for an aging population. It also doesn’t align with a general North American neoliberal mindset of making it on your own, one that has also left post-secondary institutions with massive operating budgets and reduced government funding, bloated administrations and casualized faculty, and marketing campaigns designed to entice international students to our campuses for the unnecessarily inflated tuition fees they pay. 

Instructors have been forced into something of a popularity contest in order to stay employed, turning their classes into content-delivery systems designed to attract large numbers of students looking for “bird” courses and a quick way through now-necessary accreditation. “Living in constant fear of funding withdrawal is no way to operate, and sliding down the slippery slope of edutainment fun culture is one outcome—which is highly antithetical to a scholarly mission,” writes Randle W. Nelsen, a sociology professor in both Canadian and American universities, in Degrees of Failure: University Education in Decline

A neoliberal mindset is rooted in meritocracy—everyone for themselves and everyone in competition with each other. Those who play best, win. Students realize early in their education that those on the low end of the social-class spectrum might not beat others in the meritocracy battle. They’re already set up to fail, and the university exacerbates class difference. “It is a short step to seeing the entire school certification process as a sham (or a ‘scam’),” Nelsen writes. 

In 2015, the Canadian Federation of Students reported that the Canada Student Loans program had taken in $580 million in interest that year alone. Similarly, while campaigning for the 2021 federal election, NDP Leader Jagmeet Singh claimed the Liberals were profiting off of student loans, suggesting the party had pulled in $4 billion in interest alone since they came to power. 

This framing of student loan interest bothers Neill. “It’s not the Liberal government that’s collecting this,” she says. Instead, “let’s look at the total amount repaid into the student loan program. Total repayments is quite different [from interest revenue].” She also argues that aggregating data over the course of one party’s time in power is pointless, since student debt is a problem that spans multiple administrations. Neill’s research suggests the actual amount is closer to $3.7 billion, and that profit is a different concept from revenue. Even though the revenue is still higher than the government’s expenses, by the time you figure in the cost of default loans, it’s fairly close to even. 

Either way, the federal government has noted that interest does little to offset the total costs of the Canada Student Financial Assistance (CSFA) Program. A spokesperson said the government does not profit from interest. In fact, an internal report from 2018 indicates that it operated at a net cost to the government of $2.3 billion. The government does not track where interest money from student loans goes. (Though Neill points out that when discussing any government revenues, it’s rare to say that they should be directed to any particular program.)

For the most part, governments have been reluctant to fix the system, mostly resorting to band-aid solutions. A prime example is the RAP.  Another is the moratorium on federal student loan interest, introduced in 2021 and extended until the end of March 2023, when—apparently—the pandemic’s end will send most graduates into secure, stable employment. Then there’s Ontario recent introduction of a year-long interest-free grace period for anyone working in the “not-for-profit” sector, a field that includes health care, education, arts and charity organizations. These kinds of temporary stopgaps are poorly advertised and do little to relieve the ultimate weight of the debt. 

As the Trudeau government came to power, it offered various forms of relief—medical leaves, parental leaves, grant systems for financially insecure students, students with dependents, students with disabilities—none of which addressed the chronic underfunding of post-secondary or the fact that education remains financially out of reach for most people. These programs did little to open up pathways to potential students historically alienated from post-secondary education, and continued to ultimately penalize borrowers with interest. Education still remains available to students with some degree of class privilege, even if that comes in the form of simply believing you will advance out of your class position upon graduating.

Some provinces are making more effective changes, though. BC, Manitoba, Newfoundland & Labrador, PEI and Nova Scotia have all scrapped interest on the provincial portion of student loans in an effort to make post-secondary education more affordable. In Nova Scotia, graduates may also be eligible for a program that allows for five years of loan forgiveness, up to $20,400. These are steps in the right direction.

As with any debt, though, when I talk about it, the first thing people bring up is the incentivization interest creates, motivating borrowers to pay it back faster. I find it hard to think of interest as anything but punitive. It’s not a motivator. It is punishment, plain and simple. The only message I internalized over years of looking at that growing balance was that I’d failed. I was a loser. Interest is designed to make losers out of all of us. 

When it comes to student debt, asking for more transparency in university operations and budgets might be one place to start. For a publicly funded sector, it’s surprisingly opaque. Based on my loose calculations, my gross salary is about 16 percent of what students pay in tuition to take my classes each year. So where is the other 84 percent going? 

In 2018, CUPE Ontario, the union representing part-time professors, released a report on the impact of cuts to the education sector. In it, the union states that “unlike the Canada Health Act, which has strict requirements regarding what Canada Health Transfer dollars may be spent on and basic principles which the provinces must meet in order to receive funding, the provinces are free to spend their PSE (Post-Secondary Education) dollars however they choose, with no accountability for the outcomes.” The consequence of this could be provinces reducing their post-secondary budgets, putting universities in further peril.

Following this logic, institutions are forced to adapt. The CUPE report goes on to critique universities for “contracting jobs out to companies that pay very low wages and fail to provide good benefits and pensions.” This is the end result of the policy decisions of another Liberal government, that of Jean Chrétien. The funds his administration cut from post-secondary education in 1993 have never been recovered. 

Tuition fees are likely going into the pockets of university administrators charged with reducing budgets and casualizing their workforce; the costs of administration have nearly doubled over the last thirty years, in some cases taking up to $40 million of a university’s budget. In one particularly egregious case, the CCPA reports on the salary of the University of Toronto Asset Management Corporation President and CEO in 2016: $1,475,281. Between 2011 and 2015, at Memorial University, the student population increased by 1 percent, faculty decreased by 4 percent and senior management positions grew by 13 percent.

Perhaps I am not a loser after all. We’ve been fooled into thinking university is a public service, that education is a right, when behind the scenes it’s functioning like every other late-capitalist corporation. The CCPA is not shy in its assessment of the modern university: “A coddled one percent lives a rarified existence, while austerity is imposed on everyone else. Corporations and wealthy donors are welcomed on campus as decision-makers, philanthropists or drivers of research agendas.” 

This state of affairs doesn’t persist due to a shortage of potential solutions, but a lack of government will to pursue them. We could fund free tuition and end student loans by eliminating bureaucratically heavy administrative costs such as tuition tax credits, raising taxes on the wealthiest Canadians, and returning to pre-1993 federal funding levels, the CCPA argues. There’s also room for government interventions like tuition caps and loan forgiveness programs. As Prakash points out, such measures would need to prioritize economically disenfranchised students, or they’d be largely pointless. One thing is clear: if we keep notching up tuition while reducing operating budgets, it won’t be long until we reach a tipping point.

In 2014, feeling much the same way, a debtors’ union formed in the US called the Debt Collective. Together, the group aims to ultimately cancel debt, particularly those most egregious and debilitating forms like education, medical and housing debt. The collective led the first American student debt strike in history in 2015, a movement that began with fifteen former students trapped in predatory for-profit college debt, and that ultimately grew to thousands strong. 

In their book, Can’t Pay, Won’t Pay, the Debt Collective outlines its ideas for a broader cancellation of debt, recommending actions like joining their student debtors’ union and politicizing the inability and unwillingness to pay, instead of suffering quietly and alone. It’s an option that, with our current understanding of debt, seems fantastical. But why? Debt doesn’t have to be a shameful burden—it can be a form of leverage, the collective argues, and much like creditors who organized in 2008 and 2020 to receive bailouts, debtors can get organized too.   

Student protestors have done it before: In 2012, hundreds of thousands of students went on strike in Quebec, facing down police in riot gear, protesting a provincial tuition fee hike of 75 percent over five years. Folded into a general election, the bill in question was ultimately repealed when a new government was elected. Students have also successfully fought for free tuition in countries like Germany, Denmark, Chile, Argentina and the Philippines. 

The Debt Collective writes, “Imagine teachers, who are often buried in student debt, organizing along with their students for debt cancellation and free education. Imagine nurses organizing alongside their indebted patients for universal health care.” Maybe we’re not at the extremes we see in the US yet, where privatized loans can double our rates, and then are compounded by medical debt to a degree we don’t encounter in Canada, but we are well on our way. Eliminating loan interest is a small but profound move the Canadian government could make that would change the lives of hundreds of thousands of borrowers.

None of us were reckless. Yet collectively, Patten, Johnston, Prakash and I held $354,000 of student debt. We are your teachers, nurses and doctors. Debt seems in many ways interminable, a way of life. Between graduating in 2010 with a PhD and 2019, I managed to stay alive with four-month teaching contracts at one university and several part-time jobs. If I had any money left over after covering my expenses, I was choosing between paying down my loans and saving. Debt is an emergency, so I didn’t save anything.

But then I got lucky. In 2019, I got a second job teaching graduate students at another university. At this point, I’d reduced my expenses enough that I could put all of that additional income towards my loan. In Prakash fashion, I played with my spreadsheets in early 2020 and recalculated my loan:

Amount Owing: $18,886.49

Remaining term: nine months

Monthly payment: $2,200.00

Cost of borrowing (i.e. extra interest over nine months instead of 104): $307.17

Instead of paying off my loan when I was fifty-one years old, I would pay it off at forty-two. And I would save thousands of dollars in interest. 

The day it was paid, October 16, 2020, I bought a bottle of bourbon to celebrate and posted a very rare picture of myself on Instagram holding it. This is the face and the drink of someone who has paid off $80,000 of student loans, I wrote. I looked happy, but also like someone with two jobs, exhaustion, and health problems, in part precipitated by the stress of twenty-five years of compounding debt. 

After years and years of beating myself up over it, I now recognize the real problem: I had internalized messaging from a society and governments that believe post-secondary education is a privilege, not a necessity, and that those who attend should pay the cost.

Gillian Turnbull holds a PhD in ethnomusicology and teaches music at X University. She also holds an MFA in creative nonfiction from the University of King’s College, and she now teaches as a mentor in the program. She is the author of Sonic Booms: Making Music in an Oil Town.