The average debt level of college and university students has doubled since 1990, according to the Canadian Council on Learning (CCL). And the Canada Student Loans Program has reached its limit of $15 billion.

The findings are included in a new report, “Paying the Price,” available on the CCL website.

The introduction to the report notes the impact of the "mortgage-style" repayment model used by CSLP:

The CSLP has established a mortgage-style repayment model with fixed payments, fixed repayment periods, and relatively high interest rates. There is speculation that high student debt-loads may force graduates to “forgo careers that are not remunerative, postpone marriage, to postpone having children, or, in general, to be unable to participate fully in adult life.”

Luong (2010) discovered that PSE graduates who had borrowed were less likely than non-borrowing graduates to have retirement savings and investments, and were less likely to own their own homes. Moreover, she also found that the proportion of students graduating with student debt increased from 49% in 1995 to 57% in 2005.

The introduction also discusses income contingent repayment (ICR), in which graduates would repay their loans only if they landed in high-income jobs.

The idea of ICR is controversial, particularly among student advocacy groups, partly because where such schemes have been implemented they have been accompanied by steep tuition hikes. Moreover, ICR repayment periods for low-income borrowers can be extended to what some have characterized as a “lifelong debt sentence.”

The report concludes that a modification of the recently introduced Repayment Assistance Plan seems likely to give students more flexibility in repaying their loans, and thereby reduce the burden on their postgraduate incomes:

Further simplifications and broader public awareness may ultimately accomplish the CSLP’s objective: to promote equitable access to PSE, particularly for students from lower-income families.

To be successful, the CSLP must find ways to assure potential students that their fears about unmanageable student debt can be appropriately addressed and should not deter them from participation in PSE.

Crawford Kilian is a contributing editor of The Tyee.