Student loans in Canada: an analysis of borrowing and repayment

Abstract

This paper reports the results of an econometric analysis of the borrowing and repayment patterns of Canadian bachelor's level university graduates, using data from the National Graduates Survey (NGS) of the class of 1990. After confirming the intuition that the level of borrowing is determined by supply-side rather than by demand-side factors, we analyze the repayment experience of the graduates. We calculate that the fraction of graduates who reported problems repaying their student loans was, overall, quite small, falling in the 7–8 percent range. Among both men and women, graduates with low current earnings and those in fields likely to have low lifetime earnings reported significantly greater problems with repayment. Holding other variables constant, women reported more difficulty in repayment than men. Overall, it would seem that women borrowed only slightly less than men, repaid as quickly as men (despite lower earnings), but reported having significantly more difficulty in repayment.