The weight of debt doesn’t only plague the bank
account, it burdens the psyche. Owing money — especially
large amounts of it — spawns shame, rage, seemingly endless
frustration and a level of anxiety that shouldn’t be felt
in rich nations. When scores of people add up their net worth and
come up with a total of less than zero, crisis looms.
For young North Americans who’ve had to contend with the
consequences of tuition and cost-of-living increases, the debt
load they live with can often be soul shattering.
“The worst thing about being in debt is having the creditors
call and lecture me to the point of tears when I miss a Visa payment,” says
*Monique Stein, a 27-year-old student who will possess a Bachelor
of Laws degree in one month but has yet to land a job to pay off
the cost of her education. “Being in debt and still being
a student means that I have no income, so it’s really unnerving
not knowing if I can even afford groceries for the next week.”
Stein says she paid $10,000 in tuition for this final year at
the University of British Columbia, more than double the cost from
what the school charged just four years ago. She estimates that
the bulk of her $82,000 of debt can be accounted for by the cost
of tuition ($30,000) and housing ($25,000) while attending school.
Hers is not an uncommon plight. Twenty- and thirty something-year-olds
in North America are so saddled with bills and interest payments
that the forecasts for their prosperity can seem as antiquated
a dream as the notion of peace in our time.
“We’ve seen a change, a real shift over the past generation
from a system where less than half of students left with debt and
now two-thirds leave with debt,” Robert Shireman, director
of the Project on Student Debt, told the San Jose Mercury News
this month. “Now, it’s become the norm to leave with
debt — and often with a lot of debt.”
Making debt vanish is no easy feat in a world of rising costs,
and for everyone overburdened by their bills, the pursuit of wealth
is an elusive chase. According to a recently released survey by
the U.S. Federal Reserve, 11.7 percent of families whose top earners
are aged 35 to 44 were past due on more than two months of payments
in 2004; more than double the percentage from the 2001 survey.
While the alarms that sound the debt problem have been cranked
up in the United States by the Project on Student Debt and the
notoriety gained by Anya Kamenetz, the 25-year-old author of “Generation
Debt”, government intervention has been slow while tuition
hikes have remained steady. According to national statistics for
both Canada and the United States, the average student who graduates
with a bachelor’s degree owes approximately $19,000 (in each
country’s respective currency). Considering the cost of housing,
the increased price of living expenses and the relative stagnation
of wages, North America’s young professionals have little
hopes for relief and plenty of need for a strict budget. As well,
people are taking on debt they can’t pay off, pushing themselves
to occupy spaces in social stratas their finances dictate they
shouldn’t be in, and living on the razor’s edge of
insolvency.
“My financial plan for the future includes finding, or staying
in, the least expensive rental accommodation that I can find, working
full time, and paying off as much of my debt as possible as quickly
as possible,” says Stein, who has been a university student
for nine years and intends to remain in Vancouver, where the average
monthly rent for a bachelor suite is over $700. “The sooner
my debt is gone, the sooner more of my salary can go to saving
for a down payment to own my own property.”
*Name has been changed
|
