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Hi my name is Justin McLennon and I will be talking about student loan debt and how to manage it.

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This image shows how students are tied down or have huge burden of debt that follows them after graduation. This could really hold them back and be difficult to maintain.

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During today's record low unemployment and near historical low interest rates, it is surprising to see loans of any kind present problems for the US consumer. Yet, there are signs of problems in a variety of loan areas.

Auto loans have been a concern for the past year as consumers take out record loans for new, and even used, cars. Of particular concern to economists, consumers have increasingly used seven year car loans to finance their purchase. These longer term loans did not exist in decades past, and it is a troublesome sign that during these good economic times, consumers seem to be stretched into buying cars over such long timelines.

Credit card debt is on the rise with consumers leveraging more and more purchases on their cards. Consumers are using credit at alarming rates to purchase more and more goods without appearing to be able to afford the payments. Of course, most credit card debt is held at very high annual interest rates. Oftentimes, these rates approach 15% or more.

Most alarming is the growth in student loan debt and the seemingly problematic nature of that debt. As reported by CNN, "About 11% of the $1.5 trillion of US student debt was more than 90 days delinquent or in default, according to the NY Fed. That's the most for any loan type and is nearly double 2004 levels, the earliest year the report covers."

Could this be a time when a recession is actually caused by consumers, rather than employers? Have consumers become so overextended that they have to pull back spending, which then necessitates a recession?

The supply of low-cost debt has allowed consumers to pay for everything from housing to cars to education on relatively low interest rates. This has clearly confounded economists of all stripes. Look at the economic news over the past twelve months, and it is enough to make your head spin.

"Could this be a time when a recession is actually caused by consumers, rather than employers?"

Late in 2019, interest rates were set to rise multiple times. Then, the market reset in January, and nearly every economist was pointing to a recession by late 2019...or more realistically, 2020. Just a few months later and everything turned around and slow and steady growth was the proclamation. While not everything is rosy, relatively few economists are talking about an imminent recession.

Economics is always somewhat of a mix of science and art, especially in an economy that is driven heavily by fickle consumerism. However, in such a data-rich time as today, the nature of economic prognostication has never seemed so fluid.

Does the Fed have interest rates and monetary policy correctly pegged at the right levels? Will the proverbial soft-landing allow for sustained economic growth for years to come? Is there a cost to the debt-driven economic expansion? Nobody is sure what comes next, but the loan crisis appears to be growing, and nowhere is that more evident than in the student loan market.

The Next Economic Bubble

After the Great Recession, there was significant talk among economists that higher education was poised for a reset. Many economists called higher education the next unsustainable bubble in the economy.

That higher education bubble has been extended 10 years. This may be due largely to the quick rebound of the US economy after the Great Recession. Also, college degrees, in many industries, are simply the entry-level prerequisite for entering the workforce.

Simply put, the post Great Recession job market has allowed many college students to see their return on investment in college education as a reasonable risk. Families have been willing to pay a premium for degrees in the hope (guarantee?) that that premium is worth the expense.

With student loan delinquencies at record levels during good times, will students, government, and employers be willing to continue to pay that premium during a downturn? Governments and employers have used the tight labor market as an opportunity (excuse?) to increasingly lavish higher education as a carrot to future employees.

Starbucks, WalMart, Chipotle, and dozens of other employers offer deeply discounted or even free college tuition to employees to lure new employees, while governments (and politicians) have increasingly promoted the idea of free college tuition.

This seems eerily familiar to the go-go times of the early 2000's when just about anyone who could fog a mirror could purchase a home. In the wake of that artificial expansion, there were homes (and entire tracks of land) that went underwater for years.

What will happen in higher education? It is hard to say. Given the pending doom of unfunded government pension liabilities, Medicare, Social Security, Medicaid, and other high-priority social programs, it is hard to see how free college tuition ever becomes a reality.

Where to Go From Here

To date, there have been plenty of futurists crying out for transformation in how we train, educate, and support the next generation of workers. These changes have been widely adopted in white papers and various pilot programs. Yet, K-12 and higher education within the US look nearly the same as it did after WWII. Most students are still compelled to attend grade school that is taught by uniform state standards Monday-Friday from morning to midday. Millions of high school students take a somewhat universal pre-college curriculum taught over six one-hour periods regardless of desire or aptitude.

At the college and university level, most students cram into large freshmen survey courses with the promise of graduating in four years and most do not. Degrees in literature and history cost nearly the same as high-demand fields like engineering and computer science. What gives? A well-appointed engineering building with expensive engineering faculty costs markedly more than a history department, right?

To many, this argument sounds like heresy. Like all public goods, all things are equal in higher education, right? But why? Of course, higher education is a public good, and things in the public good are rarely treated the same and consumer products. For instance, we spend multiple times more on a well-used public highway than we do a country road, but both are equally free. But should the same hold true for higher education? It may be worth arguing that math, science, and tech education should be free because that offers the greatest tangible benefit to our consumer-driven economy AND we need more students going into those fields. OR conversely, it may be worth arguing that the free-market dictates that those fields should be charged a premium because they offer the greatest return in investment (ROI) for students.

Where this leaves higher education is difficult to say. Some futurists grab on to the idea of skills-based education programs, but those have failed to catch on in an significant way. The more likely outcome is that the larger institutions continue to become larger, serving as the Walmarts of higher education, while the small schools continue to create more boutique experiences for students. The growth in both are likely as the demand continues to remain high.

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College President Speaks about Student Loan Crisis - Oak Valley College

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During today's record low unemployment and near historical low interest rates, it is surprising to see loans of any kind present problems for the US consumer. Yet, there are signs of problems in a variety of loan areas. Auto loans have been a concern for the past year as consumers take out record loans for new, and even used, cars.

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This image shows how students need to take notes on how to save money, so they do not end up in debt. This image also shows just how quickly money can add up.

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Vancouver is Canada's most expensive city and the startup costs from tuition and books can leave a gaping hole in your wallet.

While you would be forgiven for being nose-deep in your books, it's time to take a minute to reflect on how you're managing your money. Do you have a budget? Or are you spending on the go?

University is expensive and there are endless opportunities to spend your hard-earned income or student loans. By making some small changes today, you can save yourself a lot of money over time.

Budgeting

Making a monthly budget is the first step towards staying on top of your finances. Budgeting gives you a big-picture view of your money, so you can make informed spending and saving decisions. It can help reduce the amount of debt you have once you graduate because, trust me, you don't want to enter the working world with $30K of debt.

1. Make a budget

Create a spreadsheet and compare your income and expenses for the next year. Are you in the green (income greater than expenses)? Great! Make sure you're saving money every month.

If you're in the red (expenses greater than income), you'll want to think about ways to reduce your spending or increase what you're making each month.

Visit UBC's Financial Planning page for useful budgeting resources including a budgeting basics worksheet and a budget planner. There's also a handy online cost calculator you can check out.

2. Track your spending

Write down every purchase you make or use a budget app like Mint, Wally, Mvelopes, or Goodbudget. Simply tracking what you spend can help you notice patterns, make you more aware of where your money is going, and help you identify if you need to make a change.

3. Differentiate 'needs' vs 'wants'

While it seems like a simple distinction, you would be surprised at our ability to rationalize certain spending decisions. Saving money by buying only what you need gives you more flexibility in your budget in the long run.

4. Stick to your budget

Making a budget is the easy part. Next, you need to put it into action. But remember: a budget is not a permanently fixed thing. On the contrary, it is meant to be dynamic. So update it when things change.

School

University is expensive and the bills can add up, especially in September and January, when tuition is due and you need to buy books for class. By making smart choices and putting in some extra work, you can reduce the impact of these big costs on your wallet.

5. Look out for free money!

While we all know that money doesn't grow on trees (#SAD!), there are a surprising number of places to get it for free.

Apply for scholarships, awards, and bursaries. Many scholarships don't receive very many applications, so it's worth putting in the effort and going for it.

6. Be smart about how you pay school fees

Avoid paying for your tuition or housing fees with a credit card, as a 1.75% fee is added on to the total. For a tuition payment of $3,000, that's an extra $30 lost.

Use another payment method such as a bank transfer or cheque. Visit the Paying Tuition page to learn about your payment options.

7. Don't waste your meal plan dollars

If you're living in residence and have a meal plan, the best option is to use your basic meal dollars to eat at the on-residence dining halls, where you'll get a 25% discount on every purchase.

You can also get a 5% discount when you use your flex dollars at UBC Food Services locations.

8. Save money on textbooks

Buy used textbooks from former students on Craigslist, Kijiji, or Facebook groups like UBC Used Textbooks.

The UBC Bookstore even has a rental program available for some books. Also, don't forget to check Amazon for some great deals.

9. Sell your textbooks

When you're finished with a textbook, sell it back to the UBC Bookstore or Discount Textbooks, or try to find a new student who needs it.

Food/Grocery

Besides rent, your biggest monthly expense is most likely food. While eating out all the time is the easiest option, it's also the costliest. Adopting a do-it-yourself attitude to food consumption is a smart way to both save money and work on your cooking skills.

10. Cook at home

Limiting the number of times you eat out each month can save you huge amounts of money. Cook big meals and put the rest in Tupperware containers. Bring the leftovers with you to school and heat them up to save money on meals.

There are microwaves located all around campus, so really, there's no excuse. Check out this handy map as a useful starting point for finding the microwave nearest to you.

11. Buy in bulk

Buying in bulk helps you get the most value out of each purchase. Do grocery runs with friends and buy family packs. Separate food into plastic bags and put the extras in the freezer for later.

12. Plan your meals

By planning out your meals for the coming week, you know the exact ingredients you need to buy. Make a shopping list and shop strategically. Only buy what you need. This also helps reduce wasted food at the end of the week.

13. Make your own coffee

If you buy a coffee per day at $3 per cup, that will end up costing you $600 over the school year. I repeat, $600.

Instead, buy coffee beans in bulk and make it yourself. Purchase a travel mug and bring it with you to campus to keep your coffee warm.

14. Coupons, coupons, coupons

Get your hands on as many coupons as you can, and use them to reduce your grocery bill.

Shopping

In this consumer culture we live in, it's very tempting to want-in the words of Arcade Fire-everything now. Resisting the temptation to spend frivolously is the best way to save money.

But, of course, you can't avoid buying certain things. So when you do need to spend, take steps to reduce the cash you're dishing out.

15. Resist impulse buys

This merits repeating: differentiate between the things you need and the things you want. If you do want to spend money on a 'want,' check your budget first and see if you can afford it.

Don't make purchasing decisions on the spot without thinking about the consequences.

16. Shop at discount stores

The dollar store should always be your first destination when you're shopping for household goods, school supplies, and more. Thrift stores are great for used clothing and Vancouver's got a bunch of them.

To start, you can check out the Salvation Army in Kits, F As In Frank on Main Street, Community Thrift and Vintage in Gastown, or the Wildlife Thrift Store on Granville Street.

17. Buy generic products, avoid name brands

This is self-explanatory. Whether it's food, medicine, toiletries, or household products, choose the cheaper generic option as opposed to the top-of-the-line name brands.

At the grocery store, buy the house brand products. The dollar or two you save adds up over time.

18. Ask about student discounts

While many stores offer discounts to students, these deals are not always advertised. Don't be afraid to inquire with a store employee. Have your student card ready. Ask and (sometimes) you shall receive.

Entertainment

Extracurricular activities and a social life are necessary for making your university experience enjoyable. The tricky part is figuring out how to have fun without breaking the bank.

19. Choose social activities that don't cost money

Go hiking, cycling, sightseeing, or take a walk in the park. Activities that take advantage of Vancouver's proximity to nature are best. Here is a list of 25 free things to do in Vancouver.

20. Take advantage of UBC campus attractions

As a UBC student, you get free access or significant discounts on entry to a number of UBC institutions, including the UBC Aquatic Centre, the ARC and the Birdcoop Fitness Centres, the Museum of Anthropology, the Nitobe Memorial Garden, and the Morris and Helen Belkin Art Gallery.

21. Join a club

University clubs are amazing ways to get involved and meet other students. There are literally thousands of clubs at UBC and they're constantly putting on social events.

Check out the AMS website for a full list of available clubs.

Don't be afraid to reach out for help

Often students will avoid reaching out to people who can help them until it's too late and they're already in financial trouble. Avoid doing this. If you're strapped for cash, reach out to those around you for help. Let your family know. Ask your parents or grandparents to send you money or for a loan.

You can also contact your Enrolment Services Advisor for advice on what to do. ES Advisors can help you craft a budget and a solid plan for easing your financial woes.

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21 money-saving tips and tricks for students

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Vancouver is Canada's most expensive city and the startup costs from tuition and books can leave a gaping hole in your wallet. While you would be forgiven for being nose-deep in your books, it's time to take a minute to reflect on how you're managing your money. Do you have a budget?

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https://www.cbc.ca/news/canada/british-columbia/student-debt-management-1.4263347

The website I found was talking about how you can manage your student debt and different ways to pay it off, especially since the cost of living is increasing rapidly. Some options that were listed were to get a job, manage your current budget and to use your grants or other money that has been given to assist in paying off the debt.

I chose that website because CBC is a trustworthy and reliable Canadian news source with valuable information. The information that I found useful was using the grants to assist in paying off the loans. Another thing that I saw but had not thought of was selling valuables to assist in paying off debt.

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https://www.creditcanada.com/blog/best-student-loan-debt-advice

The website I found was credit Canada. This website talks about the various ways to assist in paying off student debt. The site provides plenty of advice and resources to help out students who are in the situation of paying off student debt. The site also gives you tips on what to do after your finished school and while you are in school.

This site provided many quick to access resources. It was also straight forward and easy to understand. This site talked about repayment extensions which I don’t really know about and when I read it, I was intrigued.

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3 Steps to Paying off Student debt
This Video talked about how to manage student debt loan and the different ways to go about managing it. The video talks about how to mange your student debt by getting other sources of income apart from your current job, to use the talents and skills you have to make some money, and considering staying with your parents to save some money.

What made this video stand out from the others was that the video provided examples of how the person in the video was able to payoff their debt.  This person was also very personal about and gave specific detail about how he handled paying off his debt.

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3 Steps to Paying Off Student Loans: How I Paid 20,000$ in 1 Year

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Student Debt Repayment
This video focused on the overall effect student debt had on people after they had graduated. This video also broke down a step by step plan to help assist people in the repayment process.

The reason I chose this video was that the people in the video seemed relatable and personable. The one thing that I liked is that they showed what the website looked like and helped figure out a plan to get started. What I did not know was that the grants that are offered to you are not required for you to take them. The other thing that I did not know was that your loan as split into both a provincial and Federal amount.

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STUDENT LOAN DEBT Repayment Options (Canada)

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Student Loan Debt
This video talks about what the people in the video could have done to help them with their student loan if they knew as much as they did now. The video offers suggestions such as paying attention to how much debt is being collected, and it covers the fact that high paying jobs are not guaranteed. They also gave a plan for students who haven’t accumulated any debt yet to think about the schools they are going to go to which can help bring down your debt.

What I did not know about the fact that the government places you on a 9.5year repayment plan but you can make your own plan to pay it off sooner.

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STUDENT LOAN DEBT: What I Wish I Knew (Canada)

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https://globalnews.ca/news/3755628/canadian-student-loans-regrets/

This website talks about how to manage student debt and provides some ways of how to pay it off such by getting a part time job, getting a room mate to assist in helping to pay rent etc. The site also provided some advice from some students that were in this situation and how they managed to get out of the situation. This site provided methods on how to manage the student debt and which part of the debt you should payoff first.

What made this site stand out is the fact that they had students give their advice on how to manage student debt and followed up with those students years later.

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Paying off Student Loans for Canadians
This video talks about managing student debt in Canada and covers the process of the student debt timeline. The video talks about the interest rates and principles of student debt and uses the National student Loan Service Centre as a source and provided examples.

The thing that I liked about this video is that the person in the video broke down the loan repayment situations all across Canada. The video was also very current because it spoke about loan repayment in 2020. The video was also easy to follow along and understand.  The video was also funny since there were well placed edits.

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Paying Off Student Loans for Canadians | OSAP & ALL PROVINCES

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Website 3: Managing Debt during COVID -19

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Website 3: Managing Debt during COVID -19

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https://www.onpointcu.com/blog/resources-to-help-you-manage-student-loan-debt-during-the-covid-19-pandemic/

This website was talking about how to manage student debt in COVID-19 times. The website provided some information about how to mange debt including contacting lenders in case you get in trouble. This site also talks about the CARES act (Coronavirus, aid, Relief and Economic Security act) which explains how people can pay off student loans in the pandemic that is currently happening. One of the examples of that being an income driven repayment plan.

What made this site stand out to me was the fact that the site talked about how students are managing to pay off or be able to pay student debt during COVID 19 which is relatable due to the conditions that are happening right now.

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1. What did you learn about your topic that surprised you the most?
What I learned about my topic that surprised me the most was hearing how many years it can take to payoff the student loans.
2. Provide a real-life example of how this topic is relevant or interesting for you.
This topic is relevant to me because since I am a college student and I will be graduating this following year, it is important for me to know some plans to help me manage my student debt.
3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?
The most important thing to pass on would be to try and save up as much money as possible to make it easier for student loans to be paid off so that way you have some leverage in paying off the debt.