The Mark 2010

Bridled with sky-high student debt, the financial future of Canadian youth looks bleak, even as the recession recedes.

Monday’s Globe and Mail editorial "A Generation’s Raw Deal" was right to highlight the frightening economic environment young Canadians now face. Youth anxiety around the recession has been building for some time. In addition to the 20 per cent student unemployment rate reported by Stats Canada, DECODE recently found that 14 per cent of working young people aged 15 to 24 expected to lose their jobs in 2009.

What’s a kid to do? Traditionally, the answer was simple: go to school or stay in school. In the past, youth populations have ridden out recessions and depressions by pursuing post-secondary education, or staying in school longer to appear more attractive for the eventual economic uptick. That answer may not be as simple this time around.

There are troubling signs that this recession might be different. Post-secondary enrollment figures aren’t out yet for this year, but over 2007/2008 – just as we were seeing the first signs of economic trouble – the rate of increase in post-secondary enrollment was just .6 per cent. That’s the lowest rate of increase in almost 10 years, where it has averaged between 2 and 3 per cent. This is despite the fact that, according to our research, over three-quarters of young people expect to further their education in the next five years.

Why is this happening? Sky-high tuition is the likely culprit. Despite patchy efforts to freeze tuition rates, the fact remains that the cost of getting an education is an enormous burden on young Canadians and their families. DECODE’s studies over the past five years have shown that almost three-quarters of all students now incur debt to further their skills. On average, those taking student loans owe an average of $25,000 per student. That translates to over $13 billion in debt held by Canadian post-secondary students.

Somewhere along the line, Canada’s governments made the decision to pass on more of the costs of higher education to young people. The rationale has been focused on the individual benefits. Those with post-secondary education earn more than those without, and so, following this logic, should shoulder more of the burden.

We are about to discover the long-term implications of this choice. We’ll be hit in two ways. Those drowning in debt will stay at home longer, increasingly draining their parents’ resources, while spending less in the economy. More worryingly, a whole other subset of the population will internalize our current fixation on high personal debt – and won’t bother getting any education. Ultimately this will have dire consequences for our ability to compete in the new industries that will replace the hulk of the North American manufacturing economy.

We can’t keep telling young people to be more responsible with their spending and to incur tens of thousands of dollars of debt to secure a job they’re not sure they’ll have. The time has come to reset the balance and treat post-secondary education as a public service that we all benefit from.

There are two ways to make “youth stimulus” a pillar of Canada’s recession-recovery plan. First, invest in increasing post-secondary attendance. Reducing the tuition burden is vital to our economy’s long-term health. Second, re-initiate or extend summer employment programs through the whole school year, so that government and business can train their future workforce.

A final note, to Canada’s young people: You’re not off the hook. Your lack of interest in politics and voting seems to give other generations the perceived right to ignore you. It’s time to find your voice and get involved, to ensure Canada’s leaders understand how these decisions impact you.