Student Debt: The View from 1987

They’re talking about rising interest rates on CBC’s Cross Country Checkup tonight and some of the callers are talking about the burdens of paying down student loans. It reminded me of an article from MacLean’s Magazine from October 5, 1987, which featured yours truly as a freshly-minted graduate with a student debt problem.

The main point of the article, written by Mary McIver and James Careless, is that the cost of post-secondary education was very high, leading to financial hardships for indebted grads upon graduation. I don’t think this has changed. Unfortunately the title of the article is “The Artful Dodgers,” which is somewhat click-baity (even though there was nothing to click in 1987) and could be seen as as somewhat dog-whistley for those who opposed the student loan program.  The first two-thirds of the article focuses on people finding ways to dodge payments — primarily through declaring bankruptcy — although overall the article does a reasonable job of showing how those people arrived at that point.

Declaring bankruptcy is a last ditch solution for anyone in financial difficulty, and such action is rare among recent university graduates. But Fuller’s case underscores the problem that an increasing number of undergraduates will eventually have to face. With the high cost of tuition and other expenses, many students turn to Canada’s student loan programs for assistance. But when they graduate they often find themselves saddled with heavy debt at the starting point of their careers. The’ salaries they make in entry-level positions—if they find jobs at all—may cover such basics as food and shelter, but leave little for loan repayment.

I appear near the end of the article, as someone whose first payments are looming.

The numbers in this article seem low by today’s standards, but remember, these are 1987 dollars. However, the debt I owed — $16,000 — might as well have been a million at the time. (Not mentioned in the article was another $3000 I owed in loans outside of the student loan program.)

You can read the full article here in the MacLean’s archive. The bit that includes me is here:

But however controversial the student loan programs are, many students are grateful that they exist at all. One is Ed Hawco, who spent two years at the University College of Cape Breton and four years at St. Francis Xavier University in Antigonish, N.S., borrowing increasing amounts every year through the Canada Student Loan Program. He now faces a debt of $16,000, with repayment terms of roughly $250 a month over a 9½-year period.

Hawco graduated with a BA in sociology and psychology in May, and his first payment is due in late November. But the 27-year-old, who recently moved to Montreal to take a job as a photographer’s assistant at $12,000 a year, said, “There’s no way I can meet that first payment, and I don’t know how I’m going to pay any back at all, at least for this year.” On the one hand, Hawco said, “it is frightening to graduate with a $16,000 debt.” But he added, “Thankfully the system is there, because otherwise I couldn’t have gone to university.”

I’m happy to report that I did not declare bankruptcy, although the first few years were very hard. I was able to defer payments for about another year if my memory serves me, but once started those payments they were as much as, or more, than my rent. This went on for years. It took at least another five years beyond graduation (and after the publication of this article) before I really found my feet career-wise (and thus, money-wise). I made my last student loan payment in 1997, I think, ten years after graduating.

I was then, and I remain, grateful that the student loan program was there for me. I always resented people who wanted to shut it down or severely curtail it because of a few cases of people abusing the system or defaulting on their loans. My mantra has always been that this is simply the cost of having the system available for those who need it; that you cannot punish many deserving people because of the misdeeds of a few.

That said, many things can be done to make it easier to pay back the loans. First of all, recognition that it can take years out of school before some people obtain the financial footing they need to make the payments. The payments could also be tax deductible, which would help a little bit and would signal the government’s acknowledgement that education is an investment in the future of the country, not just the individual.

In my case, as hard as it was, I always tried to keep things in perspective. $16,000 at the time was about the cost of a Trans-am. Plenty of people my age in 1987 had Trans-ams. When things were bad I would remind myself that I could have spent that money on a goddamn car, or on six years of education. Which would give me the bigger return on investment (both financial and otherwise)? Right.