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Mary MacGillivray

(November 30, 2000, Gazette)

The burdens of graduation

By Mary MacGillivray

Being a student is expensive. The recent convocation ceremonies have kick-started some students into worrying about their huge debts as they emerge from university. The cost of renting a graduation cap and gown is peanuts compared to the cash that some students are going to have to come up with — and soon. At $20, with a $30 deposit fee, renting this convocation wear is worth every penny. After all, for students, convocation is an eagerly anticipated event. Meanwhile, each year, a significant number of students also anticipate the whopping loan payments that are soon to begin.

With an interest rate of 10 per cent, student loans are extremely expensive over the long term. Students are given a maximum payment period of 14 years. If the loan is paid over a 14-year period (they automatically give you 14 years), the amount paid will double. A loan that was originally $30,000 will cost approximately $60,000 if paid in monthly installments over the course of 14 years. Hence, this financial burden will follow some students into their middle age. Unfortunately, some students are not aware of the impact interest rates will have until it's too late. Paying double the money one is expected to pay for one's education is a very nasty reality check. Many university graduates will want to settle down and start a family at some point during this 14-year span. Being broke is discouraging when considering supporting a house pet, let alone a growing family.

Of course it's great that student loans provide the option of going to school, but at a 10 per cent interest rate for more than a decade? This influences the decisions of working graduates drastically. Student loan debt makes life very difficult for many university graduates. Post-secondary education is important, and being employable is very important once you have racked up such a debt. Adapting efficiently to life with debt is essential, and this adaptation involves financial and other sacrifices.

Students are sometimes forced to choose between the jobs they want (that may act as a stepping stone to a career in their field), and the jobs that will better pay their bills. People cannot work their way up as easily if they have to deal with living expenses and an ever-present $500 loan payment every month.

This demanding debt means that for some, buying a home or a car is out of the question for a long time. Some graduates find they must move elsewhere to work instead of staying here with friends and family. What an awful reward for attaining a degree and moving into the work force. Debt and the need to meet payments is the urgent motivator. Higher currency rates in the U.S. have attracted many of our graduates. Those with a pressing debt to eliminate (as well as a whopping 10 per cent interest rate to consider) want to pay their loans as quickly as possible. Thus, making almost 50 cents extra for each dollar quickly becomes an important consideration in deciding where to live and work.

So, due to such financial pressures and a considerable unemployment rate, Newfoundland is losing out on an extremely precious resource — university graduates. Too many are moving, or are planning to move, to the mainland, Ireland, and even as far away as Korea. Graduates from the rural parts of the province may simply be unable to return to their small communities with such a debt facing them. While some are still optimistic about finding financially adequate employment here in Newfoundland, others are already planning their job interviews in other parts of the world.

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