Half of recent graduates finished post-secondary education with debt, according to Statistics Canada
Completing a degree can be challenging at the best of times but completing one during such uncertain times brings that challenge to a new level, as the labour market has shrunk because of the pandemic.
“(My classmates and I) are very worried now,” said Fang Lin, a fourth-year management and human resources student at the University of Toronto. She is planning to graduate in less than two months.
“We don’t know what our future is and we’re worrying how we are going to find a job under this circumstance,” said Lin.
Lin is an international student and her parents used their life savings to help her pay most of her expenses since she came to Canada in 2017. Lin was going to look for full-time work after graduation to repay her family in order to help them have a better life in China.
But Lin’s hope has slowly vanished since the pandemic hit last March. As COVID-19 swept through Canada, the labour market steadily declined.
According to Statistics Canada, the country lost 213,000 jobs in January of this year and the unemployment rate reached 9.4 per cent, the highest level since August 2020. Student unemployment rates reached 40 per cent in May 2020, being the highest youth unemployment rate for any year since 1976, which is as far back data is kept on the Statistics Canada website.
“Now I realize that there is no hope for a new job, but I also lost my current part time job. This is really frustrating,” said Lin.
Lin has been working as a part time office assistant for an accounting firm since 2018. They called her whenever they needed a hand, but a few months after the pandemic hit, the employer stopped calling.
“Now I feel like I have nothing,” said Lin. “Sometimes I get really depressed wondering what will happen if I won’t be able to find a job after graduation in April. How am I going to pay for rent and food and how am I going to support myself?”
Lin’s situation is not uncommon among university students who are graduating in the middle of the pandemic. The situation becomes more complicated when combined with post-secondary student debt; something that half of recent graduates will have to face.
In 2020, Statistics Canada released a report on the state of student debt in Canada. The document, which analyzes data from the 2018 National Graduates Survey (NGS), revealed that half of all recent post-secondary graduates incurred debt from their studies.
The report suggests that due to the COVID-19 pandemic, students may take on more debt to compensate for a likely loss of income.
“Examining the debt load of young Canadians is particularly important in the context of the COVID-19 pandemic, as many students lost their jobs or had a work placement cancelled or delayed as a result of the pandemic,” the document states. While COVID-19 continues, many recent graduates are still trying to pay back their debt.
A petition circulating online called DontForgetStudents is calling on the federal government to provide income support to cover all students and recent graduates regardless of prior work experience and income. The petition is led by a group of students from different Canadian universities and has gathered more than 47,000 signatures since March 1.
Simon Zhong, the executive director at the Toronto Community and Culture Centre, said that recent post-secondary graduates are seeking employment in one of the worst job markets since the Great Depression. He also said it’s going to be a difficult transition for students transitioning into the job market during COVID-19.
“A lot of employers aren’t in a position to onboard new people and train them right away, either because of the employers’ financial capacity or because of the current rules around working safely during COVID-19,” said Zhong.
However, CIBC bank is forecasting that Canada’s unemployment rate will fall to 6.2 per cent by the end of next year, a significant improvement from the 9.4 per cent unemployment rate reported by Statistics Canada earlier this month.
“There is so much pent-up demand. Not all the extra money will be spent, but much of it will go toward the service sector,” said Benjamin Tal, deputy chief economist of CIBC World Markets. “This is good news because that’s exactly where we need the jobs. That’s why we’re going to see such a nice rebound in the economy.”
Gavin Adamson, a business journalism professor at Ryerson University and former journalist for Bloomberg News, was surprised to see so many jobs being lost during the past year, but he is also optimistic about the rebound of the economy.
“The interest rates remain at historically low levels,” said Adamson. “I don’t see the Bank of Canada raising them for many months. That will encourage business owners, stimulate economic growth, and that will be good for jobs and younger people generally.”