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Fédération étudiante universitaire du Québec

Student Indebtedness

Comprehensive study

Presented for the 151st meeting of the Board of Directors(CAO-15111)

August 20-21, 2011In Montréal



The Fédération étudiante universitaire du Québec (FEUQ) is an organization that brings

together 15 student associations with more than 125,000 students from all levels of and every

region of Quebec. Established since 1989, its main mandate has been to defend the rights and

interests of students with governments and education stakeholders. Throughout its twenty years

of existence, it has endeavored to defend a humanistic education as a societal choice. It focuses

particularly on defending its members before, during and after their passage in university by

demanding, above all, an accessible and quality education.


15, rue Marie-Anne Ouest2e étageMontréal (Québec)H2W 1B6Telephone: (514) 396-3380Fax: (514) 396-7140

Supervision Ariane Campeau, vice-president of sociopolitical affairsAnalysis, writing,linguistic revision andpage formatting

Louis-Philippe Savoie, contract researcher

All rights reserved – FEUQ 2011



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 i

Summary

Student indebtedness is an undeniable dimension of many Western university systems.Quebec is not alone: its loans and bursaries program, though much more generous thanthose offered in the rest of Canada and the United States, is nonetheless often a high

source of indebtedness. The public debate on student indebtedness also tends to leaveaside two other forms of indebtedness, which are contracted from financial institutionsand relations (family and friends). This notice hopes to fill this gap.

The first step consists of giving oneself a conceptual framework for studentindebtedness. Following a review of the definitions currently employed, we will defineas all debt contracted for professional or postsecondary studies, independently of the issuer,which allows the student to pay his school expenses as well as living expenses, with the exceptionof a mortgage or the purchase of a vehicle. Subsequently, we will study and compare thecharacteristics of public and private loans; it emerges that public loans are generallymore advantageous, despite the interdiction of bankruptcy seven years after graduation.The sales techniques of financial institutions often turn out to be misleading.

Subsequently, we will focus on the impacts of indebtedness, as observed in theliterature. Overall, it emerges that students are not very informed on credit and its use.Before studies, indebtedness acts as a barrier to entrance, especially for the pooreststudents. This is explained, among other things, by a relation to risk that is different inmore disadvantages students. The theoretical models leave us to envisage an influenceon the choice of educational institution and field of studies, essentially for monetaryquestions. During studies, indebtedness is an impediment: it generates dropping out,tends in a direct and indirect manner, to motivate youth to work more outside theuniversity during studies. It also generates psychological stress and can even lead to theabandonment of study projects in graduate studies. Finally, indebtedness has harmfulimpacts after studies: a high debt increases the rate of default and bankruptcies, and the

finances of the new graduate are negatively affected.After having explored the scholarly literature, we will proceed to a vast statistical study, based essentially on descriptive analysis as well as bi-variable correlations. This detailedanalysis serves to feed a model of student indebtedness made up of six determinantsand twenty-four factors. Overall, it emerges that student indebtedness particularlystrikes populations that are in difficult social situations:

• Students coming from more disadvantaged backgrounds are penalized: familyincome contributes to decreasing the rate and level of indebtedness. Studentswithout a parental contribution are 1.5 times more indebted, to amounts that are1.5 times higher.

•

Older students, parents, and those that do not live with their parents are all moreindebted.

• Indebtedness predicts indebtedness: the fact of being indebtedness has a sourceand is often accompanied by indebtedness to other sources, and to amounts thatare often higher. We offer the hypothesis of the existence of a spiral of indebtedness, which will have to be confirmed by additional work.



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 ii

• Financial information is not very available, which makes students morevulnerable, especially as they learn a lot in this area by trial and error.

• Various external and uncontrollable forces tend to increase the level of studentindebtedness: the cost of studies, governmental limits on loans, the level of aidgranted, the offer of credit by financial institutions and the cost of living increase

indebtedness.• Conversely, students seem adopt strategies to limit their indebtedness, such as

the increase in remunerated work during studies or reducing superfluousexpenses, such as recreation and transportation.

Quebec university students enrolled in undergraduate studies full-time seem to makegreat efforts to limit their indebtedness. However, various levers escape them. Ageneration of students are currently indebting themselves in a considerable manner, andthe new tuition fee policy of the Charest government, namely an increase of $1,625 inthe student bill in five years, will undoubtedly lead to an increase in studentindebtedness. We rather recommend the adoption of a strategy of a fight against student

indebtedness based on five axes: the tuition fee freeze, more generous loans and bursaries, more numerous merit grants in graduate studies, better regulation of financialinstitutions and a better distribution of financial information. These five interventionaxes will allow us to structure an effective intervention to limit and reduce the burdenthat we are leaving on the shoulders of the next Quebec middle class.



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 iii

List of recommendations

1. That the government of Quebec develop and implement a strategy to fightagainst student indebtedness that puts in place:A tuition fee freeze as of 2012 accompanied by a better regulation of ancillaryfees;Improvements to loans and bursaries and merit grants from granting agencies;A better regulation of financial institutions;Communication mechanisms to improve the financial skills of youth.

2. That the government of Quebec renounce the fee hikes announced in the 2011-2012 Budget.

3. That the National Assembly of Quebec adopt a law to regulate the mandatoryinstitutional fees required by university institutions (as well as their components)and stipulate that such fees cannot be imposed unless the nature, amount andmodalities of these fees are the object of an agreement between the institution andthe recognized student association as representatives of the students concerned.

(CAU-643)4. That the maximum loan limit of student financial assistance not be increased.

5. That the special allowance covering the increase of tuition fees be paid out in theform of a bursary to all recipients without exception, and that it not lead to anyincrease in indebtedness.

6. That Student Financial Assistance increase the amount of allowable expenses forrecipients of student financial assistance, notably through an improvement of theamounts for living expenses and transportation expenses for students that do nothave access to public transit. Transportation expenses for non-residents andInternet expenses must also be included in allowable expenses.

7. That the Ministry of Education, Leisure and Sports introduce an automaticannual indexation mechanism for all allowable expenses in the calculation of Student Financial Assistance. That this indexation be equivalent to the ConsumerPrice Index (CPI) for the year concerned.

8. That the exemption amounts for the maintenance of the family unit beestablished at $45,000 and subsequently indexed.

9. That the government of Quebec adapt the loans and bursaries program with aview to recognizing the diversity of academic paths and studies-work-familyintegration.

10. That the government of Canada abolish the discriminatory provisions toward

students in the Bankruptcy and Insolvency Act.11. That governments increase the level of financing for the different granting

agencies. (CNCS-426 [2.3.])

12. That the FEUQ support the provisions of bill 24 aiming at limiting the over-indebtedness of consumers.



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 iv

13. That the government of Quebec forbid false representation in regard to studentindebtedness according to which credit can allow one to go through universitystudies sheltered from financial troubles and on the future profitability of studies.

14. That the government of Quebec impose on financial institutions the duty of clarifying financial products offered directly to students, among others, by stating

clearly the consequences of changing program or dropping out on the repaymentof the debt.

15. That financial institutions downwardly assess the maximum loan limits forstudents.

16. That the government of Quebec forbid financial institutions from proposing tostudents discounts on financial products that are not clearly or specificallydestined for them.

17. That the government of Quebec impose on financial institutions the obligation of presenting on their Internet sites and informational folders presenting theirstudent products the student financial assistance program and its modalities..

18. That the Office de la protection du consommateur , in collaboration with studentfinancial assistance and university institutions, develop and distributeinformation material on student indebtedness, with an emphasis on privateindebtedness and credit targeted toward students.



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 v

List of acronyms

SFA Student Financial Assistance

CCAFE Comité consultatif sur l’accessibilité financière aux études

CNCS-FEUQ Conseil national des cycles supérieurs de la Fédération étudianteuniversitaire du Québec

CREPUQ Conférence des recteurs et principaux des universités du Québec

CMSF Canada Millennium Scholarship Foundation

CFS Canadian Federation of Students

FEUQ Fédération étudiante universitaire du Québec

MIF Mandatory Institutional Fees

MI Methodological individualism

MELS Ministère de l’Éducation, du Loisir et du Sport

MEQ Ministère de l’Éducation du Québec

MESS Ministère de l’Emploi et de la Solidarité sociale

OPC Office de la protection du consommateur

RCT Rational choice theory



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 vi

Table of contents

1. Introduction....................................................................................................................................................1

2. Conceptualoutline.......................................................................................................................................2 2.1. TheManyFormsofStudentDebt............................................................................................................................. 2 2.2. StudentFinancialAssistancefromtheQuébecGovernment...................................... ..................................5 2.3. LoansfromFinancialInstitutions.........................................................................................................................10

3. Impactsofstudentindebtedness:whatthescientificliteraturehastosay...........................203.1. Methodology...................................................................................................................................................................203.2. Indebtedness:ageneraldiscussion......................................................................................................................22 3.3. Preventingthestartofuniversityeducation...................................................................................................25 3.4. Duringuniversity:abreak.......................................................................................................................................31 3.5. Afteruniversity..............................................................................................................................................................333.6. Modellingoftheimpactsofstudentindebtedness.........................................................................................36

4. Methodology................................................................................................................................................394.1. Statisticalmethods......................................................................................................................................................39 4.2. Samplingandrepresentativeness.........................................................................................................................404.3. Treatmentofthedata................................................................................................................................................40

5. Studentindebtedness:maincharacteristics....................................................................................425.1. Characteristicsoftherateofindebtedness...................................... ........................................ .........................425.2. Theimpactofalreadycontractedindebtedness............................................................................................46 5.3. Aspiralofindebtedness.............................................................................................................................................52

6. Theimpactofstudentcharacteristics................................................................................................536.1. Theimpactofsocioeconomiccharacteristics..................................................................................................536.2. SchoolCharacteristics................................................................................................................................................66

7. TheImpactofSourcesandMethodsofFunding..............................................................................787.1. TotalFunding................................................................................................................................................................78

7.2. Paidwork.........................................................................................................................................................................807.3. ParentalContribution................................................................................................................................................88 7.4. Meritgrants....................................................................................................................................................................927.5. Establishingthecomplexandmultifacetedlinksbetweenfundinganddebt...................................96

8. Theimpactofthelevelsofexpenses...................................................................................................998.1. Totalexpenses...............................................................................................................................................................99 8.2. Universityexpenses..................................................................................................................................................101 8.3. Livingexpenses...........................................................................................................................................................105 8.4. Otherexpenses............................................................................................................................................................113 8.5. Theleveloflivingexpensesincreasesthelevelofindebtedness...........................................................117

9. Thesituationingraduatestudies.....................................................................................................119

9.1. Methodologyandlimits..........................................................................................................................................119 9.2. Descriptionoflevelsofindebtedness................................................................................................................119 9.3. Roleofsourcesandmodesoffunding..............................................................................................................120

10. Analysisandrecommendations.........................................................................................................12310.1. Studentdebt:Keyfactorsandimpact..............................................................................................................123 10.2. Characteristicsofdifferentloans.......................................................................................................................128 10.3. Studentdebtload:Amodel...................................................................................................................................129 10.4. Recommendations....................................................................................................................................................135



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 vii

11. GeneralConclusion................................................................................................................................141

Bibliography.....................................................................................................................................................145Officialdocuments.................................................................................................................................................................145 Scholarlyarticles....................................................................................................................................................................145 Monographs..............................................................................................................................................................................147

Internetsites............................................................................................................................................................................147 Statisticalreferences............................................................................................................................................................147

AnnexeI- Caractéristiquesdesprêtsprivés..................................................................................149

AppendiceI-CodeSPSS–premiercycle.................................................................................................154Créationdenouvellesvariables.......................................................................................................................................154 Codedegénérationdestableaux....................................................................................................................................172

AppendiceII-CodeSPSS–cyclessupérieurs........................................................................................182

List of figures

Figure3-1:Useofvariouscreditproductsamongstudents18to29yearsold,progressionfrom1994to2004__________________________________________________________________________________________________________23

Figure5-1:Rateofindebtednessaccordingtosource _________________________________________________________42Figure5-2:Numberofsourcesofdebts___________________________________________________________________________43Figure5-3:Variationofthelevelofdebtaccordingtothenumberofsourcesofdebts __________________43Figure5-4:DistributionoftheamountsofdebtduetotheSFA_______________________________________________44Figure5-5:Distributionofdebtamountsfromfinancialinstitutions_______________________________________45 Figure5-6:Distributionofamountsoffamilydebts____________________________________________________________46 Figure5-7:Distributionoftotalamountsofdebt_______________________________________________________________46 Figure6-1:Changeinaverageamountsofdebtbysourcebygender_______________________________________53 Figure6-2:Table6-2:Descriptionofstudents’age____________________________________________________________54 Figure6-3:Changeindebtratiobysourceaccordingtoage__________________________________________________55 Figure6-4:Changeinaverageamountsofdebtbysourceaccordingtoage________________________________56 Figure6-5:Changeindebtratiobysourcebasedonfamilyincome________________________________________57 Figure6-6:Changeindebtratiobysourcebyplaceofresidence____________________________________________59 Figure6-7:Changeinaverageamountsofdebtbysourcebasedonthebasisofplaceofresidence___59 Figure6-8:Changeindebtratiobysourceaccordingtothestudyarea_____________________________________60Figure6-9:Changeindebtratiobysourcebasedonmovingaway__________________________________________62 Figure6-10:Changeinaverageamountsofdebtbysourcebasedonthechangeofregion______________62Figure6-11:Changeindebtratiobysourceaccordingtothepresenceofdependentchildren________63 Figure6-12:Changeinaverageamountsofdebtbysourceaccordingtothepresenceofdependent

children _________________________________________________________________________________________________________64Figure6-13:Changeindebtratiobysourcebasedonthegenerationofthestudent_____________________65 Figure6-14:Changeinaverageamountsofdebtbysourcebasedonthegenerationofthestudent___65 Figure6-15:Distributionofstudentsaccordingtotheirprogressintheirprogram_____________________68 Figure6-16:Changeindebtratiofromsourcedependingonyearofstudy_______________________________68 Figure6-17:Changeinaverageamountsofdebtbysourceaccordingtoyearofstudy__________________69 Figure6-18:Yearofstudyandnumberofsourcesofdebt____________________________________________________70 Figure6-19:Descriptionoftheexpectedlengthofthedegree_______________________________________________70 Figure6-20:Changeindebtratiobysourceaccordingtothedurationofthediploma__________________71 Figure6-21:Changeinaverageamountsofdebtbysourceaccordingtothedurationofthediploma72 Figure6-22:Changeindebtratesbasedonextensionsofpastuniversitystudies_______________________73 Figure6-23:Changeindebtamountsbasedonextensionsofpastuniversitystudies____________________73 Figure6-24:Changeindebtratiofromsourcedependingonthedegreeofeconomicprofitability___75 Figure6-25:Changeinaverageamountsofdebtbysourcebasedontheprofitabilityofthediploma 76



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 viii

Figure 7-1: Description of Total Funding___________________________________________________________________________78 Figure 7-2: Description of Number of Funding Sources___________________________________________________________79 Figure 7-3 : Variation in debt percentage by sources as a function of total funding_____________________________79Figure 7-4: Variation of average amounts of debt by source as a function of total funding____________________80Figure 7-5 : Variation in debt percentage by souce as a function of the presence of a job in autumn 2009___81Figure 7-6 : Variation of average debt by source as a function of the employment rate________________________82

Figure 7-7 : Numbers of hours worked per week, autumn 2009 __________________________________________________83Figure 7-8 : Variation of the level of debt by source as a function of the number of hours worked per week per

job in autumn 2009 _____________________________________________________________________________________________84Figure 7-9: Variation of average amounts of debt by source as a function of the number of hours worked in

2009_______________________________________________________________________________________________________________85 Figure 7-10: Variation in debt percentage by source as a function of job status_________________________________85Figure 7-11: Variation of average debt amount by source as a function of job status___________________________86Figure 7-12 : Description of gross annual income from a job______________________________________________________86Figure 7-13 : Variation on debt percentage by source as a function of gross annual income___________________87 Figure 7-14 : Variation in average amounts of debt by source in function of gross annual income____________88Figure 7-15: Variation of debt percentage by source as a function of the presence of a parental contribution89Figure 7-16: Variation of average debt amounts by source as a function of the presence of a parental

contribution______________________________________________________________________________________________________90Figure 7-17: Description of Levels of Parental Contribution______________________________________________________91 Figure 7-18 : Variation in debt percentage by source as a function of the level of parental contribution_____91Figure 7-19: Variation of average debt amounts as a function of the level of parental contribution___________92Figure 7-20: Description of amounts for merit grants and grants for internships_______________________________93 Figure 7-21: Variation of debt percentage by source as a function of the presence or absence of a merit

bursary___________________________________________________________________________________________________________93 Figure 7-22: Variation of average debt amount by source as a function of the presence or absence of merit

bursaries_________________________________________________________________________________________________________94 Figure 7-23: Variation of debt percentage by source in function of the size of institutional granted bursary_95Figure 7-24: Variation of average debt amount by source as a function of the size of institutional bursaries 95Figure8-1:Distributionoftotalexpenses________________________________________________________________________99 Figure8-2:Variationoftheindebtednessratebysourcebasedonthelevelofexpenses_______________100Figure8-3:Variationintheaverageamountsofindebtednessaccordingtothelevelofexpenses____101Figure8-4:Descriptionofamountsoftuitionfeespaidin2009bypermanentresidentsandstudentsof

Quebecorigins________________________________________________________________________________________________102 Figure8-5:Variationofratesofindebtednessbysourceaccordingtotheleveloftuitionfeespaid__103Figure8-6:Variationoftheaverageamountsofindebtednessbysourceaccordingtothelevelof

tuitionfeespaid_______________________________________________________________________________________________103 Figure8-7:Descriptionoftheamountspaidinschoolmaterial_____________________________________________104Figure8-8:Variationofindebtednessratesaccordingtothelevelofexpensesonschoolmaterial___105Figure8-9:Variationoftheaverageamountsofindebtednessbysourceaccordingtothelevelof

expensesinschoolmaterial_________________________________________________________________________________105Figure8-10:Descriptionofrentexpenses______________________________________________________________________106 Figure8-11:Variationofratesofindebtednessbysourceaccordingtothelevelofexpensesonrent107Figure8-12:Variationoftheaverageamountsofindebtednessbysourceaccordingtothelevelof

expensesonrent______________________________________________________________________________________________107 Figure8-13:Descriptionoffoodexpenses______________________________________________________________________108 Figure8-14:Variationoftherateofindebtednessbysourceaccordingtothelevelofexpensesonfood

___________________________________________________________________________________________________________________109 Figure8-15:Variationoftheaverageamountsofindebtednessbysourceaccordingtothelevelof

expensesonfood______________________________________________________________________________________________109Figure8-16:Descriptionofexpensesontransportation_____________________________________________________110 Figure8-17:Variationoftheratesofindebtednessbysourceaccordingtothelevelofexpenseson

transportation_________________________________________________________________________________________________112Figure8-18:Variationintheaverageamountsofindebtednessbysourceaccordingtoexpenseson

transportation_________________________________________________________________________________________________112



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 ix

Figure8-19:Descriptionofexpensesfordependentchildren_______________________________________________113Figure8-20:Variationoftheratesofindebtednessbysourceaccordingtothelevelofexpensesfor

dependentchildren __________________________________________________________________________________________114Figure8-21:Variationoftheaverageamountsofindebtednessbysourceaccordingtothelevelof

expensesfordependentchildren__________________________________________________________________________114 Figure8-22:Descriptionofrecreationalandotherexpenses________________________________________________115

Figure8-23:Variationofexpensesonrecreationaccordingtotherateofindebtednessbysource __116Figure8-24:Variationinrecreationalexpensesandotherexpensesaccordingtotheaverageamounts

ofindebtednessbysource___________________________________________________________________________________117Figure9-1:Descriptionofthelevelofindebtednessofgraduatestudents________________________________120Figure10-1:Modellingofthesixkeyfactorsofstudentdebt._______________________________________________130 Figure10-2:Classificationofkeyfactorsinrelationtothechoicetotakeondebtandtheimpactof

debt_____________________________________________________________________________________________________________130 Figure-3:Studenttuitionfeeratesfrom1994to2017(projected) ________________________________________135Figure-4:Mandatoryundergraduateinstitutionalfeesbyuniversity(2010-2011)_____________________136

List of tables

Table3-1:Canadians’perceptionsofcostsandbenefitsofuniversityeducationin2003..........................27Table3-2:Individualattitudestowardsthefinancialcostsandbenefitsofuniversityeducation...........27Table3-3:EvolutionoftherateofemploymentforCanadianstudentsenrolledinfulltimestudies

between1976and2008,SeptembertoApril...................................................................................................32Tableau3-4:Impactsofstudentindebtedness..........................................................................................................37Table4-1:Exampleoftablesummarizingstatisticaltests.....................................................................................41Table5-1:Characteristicsofdebtsbysource.............................................................................................................44Table5-2:RelationbetweentherateofindebtednesstoSFAandtherateofprivateindebtedness......47Table5-3:RelationbetweentherateofindebtednessatSFAandtherateoffamilyindebtedness........48Table5-4:Relationbetweentherateofprivateindebtednessandtherateoffamilyindebtedness......48Table5-5:RelationbetweentheamountoftheSFAdebtandthepresenceofothersourcesofdebt.....49Table5-6:Variationoftheaverageamountsofdebtaccordingtotheamountofdebtsduetostudent

financialassistance....................................................................................................................................................50Table5-7:Variationoftheindebtednessratebysourcebasedaccordingtothesizeoftheprivateloan

..........................................................................................................................................................................................50Table5-8:Variationoftheaverageamountsofdebtspersourceaccordingtothesizeoftheprivate

loan..................................................................................................................................................................................51Table5-9:Variationoftherateofindebtednessbysourcebasedonthesizeofthefamilyloan.............51Table5-10:Variationoftheaverageamountofdebtsbysourcebasedonthesizeofthefamilyloan...51Table5-11:Summaryofstatisticaltestsonindebtedness.....................................................................................52Table6-1:Descriptionofstudents’age.........................................................................................................................54Figure6-2:Table6-2:Descriptionofstudents’age.................................................................................................54Table6-3:Descriptionofgrossfamilyincome...........................................................................................................57Table6-4:Changeinaverageamountsofdebtbysourcebasedongrossfamilyincome...........................58Table6-5:Descriptionoftheareaoforiginofstudents.........................................................................................60Table6-6:Averagedebtaccordingtothestudyarea..............................................................................................61Table6-7:Summaryofstatisticaltestsonsocioeconomiccharacteristics......................................................66Tableau6-8:Profileofborrowersbasedonacademicprogress.........................................................................67Table6-9:Classificationofthecurriculumaccordingtotheirprofitability....................................................74Table6-10:Correlationcoefficientsbetweenfieldofstudyandcertaincharacteristics...........................75Table6-11:Summaryofstatisticaltestsonschoolcharacteristics....................................................................76Table 7-1 : Correlation between family income and family contribution..................................................................88Table 7-2 : Summary of statistical testing between sources of funding and debt.....................................................97Table8-1:Descriptionoftheamountsoftuitionfeesaccordingtocitizenshipstatus..............................102Table8-2:Descriptionofthemodeoftransportationusedmostregularlyinautumn2009andaverage

annualexpenseassociated.......................................................... ................................................................. ........111



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 x

Table8-3:Descriptionofthemodeoftransportationusedmostregularlyinautumn2009basedonthe

regionofstudies......................................................................................................................................................111 Table8-4:ComparisonofmeasuresofthecentraltrendofrecreationalexpensesforQuebec

householdsandstudents......................................................................................................................................116Table8-5:Statisticalanalysisofthelinksbetweenthesourcesofexpensesandindebtedness............118Table9-1:Numberofborrowersthathadtoassumeattheendoftheirstudiestherepaymentoftheir

loansobtainedaccordingtotheamountofthestudentdebt,2008-2009...........................................119Table9-2:BelongingtoaresearchgroupandparticipationinSFA.................................................................120Table9-3:Presenceorabsenceofmeritgrants.....................................................................................................121Table9-4:Presenceorabsenceofagrantforconferenceorinternship.......................................................121Table9-5:Presenceorabsenceofafamilycontribution.....................................................................................121Table9-6:Presenceorabsenceofaninternaljobattheuniversity................................................................122Table9-7:Presenceorabsenceofanexternaljobtotheuniversity...............................................................122 Table10-1:Descriptionoftherelationbetweendebtload,thesixkeyfactors,andstudiesonacademic

careerpaths................................................................ ................................................................. ..............................132TableauI-1:Offredecartesdecréditsrégulièresparinstitutionfinancière..............................................149 TableauI-2:Margesdecréditrégulières..................................................................................................................150TableauI-3:Offredecartedecréditcibléeparinstitutionfinancière...........................................................151TableauI-4:Margesdecréditoffertesparinstitutionfinancièreselonledomained'étude................152



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011 1

1. Introduction

Student indebtedness is an inevitable dimension of the debate on the studentcontribution and the financing of Quebec universities. We have been mandated by theFEUQ to draw a portrait of the situation and propose recommendations emerging fromthis portrait. We have thus proceeded to this analysis in various manners.

The study begins with a presentation of the conceptual framework. We will provide adefinition of indebtedness and explore the mechanisms associated with the differentforms of student indebtedness.

Subsequently, we will proceed to a review of the scholarly literature, by focusing on theimpacts of student indebtedness before, during and after studies. We will also explorethe situation of indebtedness in Quebec youth.

Next, we will proceed to a statistical analysis. We will begin with the methodology usedto then evaluate the sequence of individual characteristics, the sources and modes of funding as well as the levels of student expenses, to see where the relations exist between these student characteristics and the different forms of student indebtedness.This analysis will concentrate on the situation of undergraduate university studentsenrolled full-time. We repeat the same analysis, on a smaller scale, for students enrolledin graduate studies full-time.

Subsequently, we summarize the effects observed of student indebtedness and issuenineteen recommendations to limit the level of student indebtedness, better regulatefinancial institutions and ensure better financial skills for students.




2. Conceptual outline

In this section, we will attempt to equip ourselves with the intellectual tools necessary tounderstand the concept of student debt. We will begin by defining student debt so thatwe may next describe the mechanisms of public lending and private lending fromfinancial institutions as it concerns the granting of loans, their particular features andtheir repayment. We will conclude by comparing the key characteristics of government-guaranteed loans and loans granted by financial institutions.

2.1. The Many Forms of Student Debt

Student debt can be defined in many ways. This study focuses on a specific kind of student debt, which we will define after examining various common typologies.

2.1.1. The Various Forms of Debt

Before defining student debt, it is necessary to analyze the various forms any given debtmay take. We will therefore examine the typologies included in some recent studies on

the subject. Before we begin, it is worth noting that several studies deal only with debtacquired through government programs (Allen and Vaillancourt, 2004; AFE, 2010a), donot differentiate between different types of student loans (ISQ, 2010), or group togetherall debts that do not come from a government program (AFE, 2010b).

Firstly, the survey into the origins and types of undergraduate financing (FEUQ, 2010a),which will be our main source of information for this study, presents four major types of debt:

• Public debt, acquired mainly from student financial assistance programs

• Credit card debt

• Debt from a line of credit or a personal loan

• Debt to family and friends.It is, however, important to note that debt from the purchase of a house or vehicle wasexcluded from the responses, by means of a specification in the questionnaire.

Other authors have opted for various typologies that are roughly equivalent. The mainone that we have retained for the purposes of this study comprises four points and wasdeveloped by the Canadian University Survey Consortium (CUSC, 2009):

• Government aid

• Financial institutions

• Parents and family

• Other sources of debtThe two typologies are similar, although indebtedness to friends is here included in theother sources of debt. For the purpose of this study, we will maintain a typologydivided into two themes.

• Public debt

• Acquired through a system of government-funded financial aid




• Private debt

• Acquired directly from a financial institution, including credit cards,lines of credit, personal loans, or other forms of debt

• Acquired from family members, friends or parents• Debt acquired from other sources

Due to a lack of conclusive data, we will not deal with other sources of debt. A quick look at institutional practices does not allow for an analysis of loans within universities,as opposed to student bursaries (see CNCS-FEUQ, 2007).

Household debt is a growing concern in Québec society: the last few years have seen asignificant increase in debt levels, because of, among other reasons, increasingly easyaccess to credit cards. Statistics Canada’s Survey of Financial Security has established atypology of the kinds of existing household debt (Statistics Canada, 2005, p. 15). In arecent study, the Institut de la statistique du Québec grouped this information into fivesub-categories (ISQ, 2010, p. 153).

• Mortgages

• Lines of credit and credit cards

• Student loans

• Automobile loans

• Other debt

This information offers a satisfactory typology of debt according the source and the type of debt.

2.1.2. Definition of Student Debt

But first, what do we mean by student debt?

It seems necessary to create this definition, given the lack of an easily usable one in theliterature. The concept of student debt may vary widely depending on authors and theirrequirements, depending on what is included and excluded:

1. Debt may be acquired through government-funded student loans only (Allenand Vaillancourt, 2004; AFE, 2010a)

2. Debt may exclusively include loans taken out directly for the completion of studies (ISQ, 2010)

3. Debt may include all types of debt, excepting major acquisitions (FEUQ,2010a; AFE, 2009)

4. Debt may include all types of debt (CUSC, 2009).Our main source of data will be the survey on undergraduate students’ livingconditions (FEUQ, 2010a). Essentially, this survey uses the following definition of student debt, which seems relevant to this study. It approaches most closely the thirddefinition by including most debts except mortgages, automobile loans and othersources of debt.




Table 2.1: Sources and types of student debt

Source/Type Mortgage Line ofcredit/creditcard

Studentloans

Automobileloans

Other debt

Public XP r i v a t e

FinancialInstitutions

X X

Family, friendsand parents

X X

Other sources

Before continuing towards the creation of a definition, it is important to discuss somedefinitions that were mentioned earlier, and why we believe they should be excluded.

We will not choose a complete financial portrait, such as that suggested by the fourthcategory of definition. Indeed, it is wise, for information-processing purposes, toexclude mortgages. These may be excessively high,1 especially for young families,falsifying the larger picture. Contrary to consumer or student debt, a mortgage is backed by an asset that can be seized in the case of a defaulted payment. Additionally, the backed asset, especially a house, has independent value (Lachance, Beaudoin andRobitaille, 2005). In the framework of the survey on student living conditions, we wouldrun the risk of finding ourselves in a situation of double-counting, given that one of thequestions asked was regarding the amount spent each month on rent. Similar reasoningcan be applied to spending on vehicles and transportation, explaining the exclusion of these types of loans. It seems, then, appropriate to keep some private loans that

correspond with overall consumer debt in the analysis.It may be considered controversial to include debt that is not strictly from studentloans.2 Some people believe that students live above their means. It is, of course, clearthat we do not share this opinion. Modern financial assistance programs for studentsaround the world (see OCDE 2010) all grant financial aid in the form of loans or bursaries, even in the case of jurisdictions where education is free, which demonstratesthe importance of being able to pay living expenses while in school. The surveyConditions de vie des étudiants de premier cycle (FEUQ, 2010a) and the Enquête sur les sourceset modes de financement des étudiants de cycles supérieurs (CNCS-FEUQ, 2008) have bothdemonstrated that university students are frequently financially independent from theirparents, implying the necessity of using the financial resources available to provide for

their needs. Yet we see that consumer debt is common for students, sometimes at highlevels: the portrait of student debt would not be complete without private debt.

1 For families under the age of 35, the median mortgage rate was $90,000 in 2005 (Statistics Canada in ISQ,2009, p. 149) 2 Student expenses, in particular, are often subject to debate in the general media




A more valid reason can be discussed. In order to analyze the functioning of publicpolicy, it is necessary to understand how it is used. This is the case for Student FinancialAssistance (SFA), which presents well-developed statistical reports. Such tools allow forquick evaluation of the strengths and weaknesses of a given program, though this is notthe objective of our study. A complete financial portrait allows us to show not onlydebts from public programs, but also needs expressed and fulfilled effectively in themarket. Given that, as we will see later, the method of calculating financial assistanceassumes that it is the main financial support for the beneficiary’s studies (after takinginto account various contributions), setting up a wide portrait of student debt, includingprivate debt, gives an interesting indication of the flaws that are frequently denouncedin student assistance programs (see, among others, FEUQ, 2010b).

Our definition of student debt should therefore include three sources: public debt,private debt and debt to family and friends. It should also exclude debt from mortgages,in order to correspond approximately to debt for consumer and living expenses,meeting real financial needs during the course of studies. We will propose, therefore, adefinition of student debt as follows:

all debt acquired as part of professional or post-secondary studies, regardless of theissuer, that allows the student to pay school expenses as well as living expenses,excepting mortgage payments and the purchase of a vehicle.

For the purposes of analysis, we will divide up student loans first and foremost basedon their source: public, financial institution, family/friends. The division by loan typepresents a significant methodological challenge, because it would be necessary todistinguish loans from financial institutions serving to finance studies and those thatserve other more or less specified ends. However, we do not have access to thisinformation. The definition is not ideal, but it gives an idea of the issue. This definitionoffers the best reflection of the financial situation of students, given, as we will see later,the important role that private debt plays in financing university studies, whichexcludes the first definition, based solely on debt from public sources.

2.2. Student Financial Assistance from the Québec Government

Close to 45% of undergraduate university students registered in full-time studies expectto leave university with debt from some kind of student assistance program (FEUQ,2010A). It is important to understand the inner workings of aid programs established bythe government of Québec: these include some significant details. The reader wishing togain additional knowledge should consult the Trousse sur l’aide financière aux etudes (FEUQ, 2010b). We will spend more time, of course, on the analysis of the sources of student debt.

2.2.1. The Loans and Bursaries Program

The student financial assistance system is made up of two main programs: the Loansand Bursaries Program (which is targeted mainly to full-time students) and the LoanPrograms for part-time students.




The first program is based on contributory and auxiliary principles. It assumes acontribution by the student, parent and/or spouse and compensates for a presumed3 lack of income. To do this, it takes into account contributions and allowable expenses , whichare shown in Table 2-2.

Table 2-2: Contributions and Allowable Expenses

Contributions Allowable Expenses

Student

Parent

Spouse

Tuition fees

Living costs

Transportation costs

Costs of dependent children

Other expenses

Source: FEUQ, 2010b

In short, this calculation provides a volume of assistance. This is then transformed intoloans and bursaries according to the lending ceiling, which is the annual debtmaximum. This amount varies depending on a variety of factors. For one thing, thelending ceiling varies according to the level of study. Table 2-3 shows the lending ceilings forthe university level, as well as public debt scenarios according to various criteria 4.

3 And not for a real lack of income, which is an important distinction. The Student Financial program is based on forecasted expenses, which do not necessarily correspond to expenses actually incurred4 Several other factors may influence the amount of debt incurred during the course of studies, includingdebt incurred while studying as well as the duration of studies




Table 2-3: Lending Ceilings

Permonthofstudy

8monthsof study

12monthsof study

Undergraduate(3 years)

Undergraduate(4 years)

Masters(16months)

Ph.D (4years)

University,undergraduate

$305 $2,440 $3,660 $7,320 $9,760 - -

University,graduatestudies orpossessing anundergraduatediploma

$405 $3,240 $4,860 $7,320 $9,760 $6,480 $12,960

Organizationknown forlending only

$950 $7,600 $11,400 - - - -

Source: Règlement sur l’aide financière aux études, RRQ, c A-13.3, r 1, art 51 . Calculations by the author according to thelength of studies forecast by SFA

Yet this lending ceiling may been modified in some cases. Indeed, about a third of loanand bursary beneficiaries receive only loans. These students benefit from a specialallowance, which is shown below and is added to the lending ceiling.

Table 2-4: Special Allowance

University year Special Allowance

2006-2007 $0

2007-2008 to 2011-2012

$3.33/cumulative units – $100 per year (30units)

$16.65/full-term unit – $500 per year

2012-2013 to 2016-2017

$10.83/cumulative units – $325 per year (30units)

$54.15 $/cumulative units – $1625 full-termunits

It should be noted that these modifications were adopted following the unfreezing of

tuition fees in 2007. They led to a significant increase in student debt, especially formiddle class beneficiaries as well as those who receive only a loan.

Finally, we will note the existence of debt limits, varying between $30,000 and $55,000depending on the level of study (AFE 2010 in FEUQ, 2010b).

It should be noted that loans from the Loans and Bursaries Program have moreadvantageous features than private loans. Students do not have to pay interest until amonth after the end of their studies (AFE, 2011a). Additionally, they have a period of six months before repayment must begin.




2.2.2. Loans Program for Part-Time Studies

The Loans Program for Part-Time Studies differs in more than one respect from theprogram for full-time students. It is only open to students who are registered part-timefor six to eleven university course units per year. It takes into account only educationalexpenses and childcare costs. It is open to students who have annual financial resources

of less than $35,000 for single students and $50,000 for married students or those with aparental contribution. The amounts are increased by $2,805 for each child, with a bonusof $2,101 if the student is a single parent. In both cases, the student must live with thechild (RRQ, c. A-13.3, r. 1, art. 82).

In 2010-2011, allowable expenses were $105.23 per university unit for educationalexpenses and $490 per semester for childcare costs (RRQ, c. A-13.3, r. 1, art. 86-7). Astudent registered for 18 credits in a year (two semesters of three courses each), whoalso had a dependent child, would receive a loan of $2380. The debt limit is $8,000. Therepayment terms are the same as for the Loans and Bursaries Program.

For the purpose of this study, we have excluded part-time students. They have differentcharacteristics than their full-time colleagues and are generally “non-traditional”

students. Their profile requires a detailed, dedicated analysis, which is not the purposeof this study.

2.2.3. After Study: Repayment

Debt implies repayment. It is worthwhile to look into the specifics of repayment of adebt obtained from a student financial assistance program. We will examine the specificfeatures of these debts, the repayment terms, and the advantages and disadvantages of student loans.

Former students are required to start repaying their student debt at the end (orabandonment) of full-time studies. They are given a grace period of six months on therepayment and a one-month grace period for repaying interest. Former students must

also negotiate a repayment agreement with their financial institution. The interest rateis set by student financial assistance by-laws at 0.5% higher than the base rate for businesses, which was 3% in July 20115 (RRQ c. A-13.3, r. 1, art. 73). This rate isgenerally better than that for personal loans. For example, the interest rate for studentlines of credit hovered around 4.5% (infra section 1.3). Similarly, only the length of therepayment term can be negotiated with the financial institution.

There are three types of assistance for new graduates, which make student loans moreadvantageous than personal loans.

• The deferred repayment program is offered to former students with lowincome for a period of more than four months.6 In this case, the government of Québectakes over interest payments for a period of six months. Students may enrol in thisprogram for a total of twenty-four months (AFE, 2011b, p. 32).

5 See the Bank of Canada website: http://www.bankofcanada.ca/rates/daily-digest 6 Gross monthly income from $1,522 per month for students without dependent children to $2,458 permonth for the head of a single parent family with four children




• The debt forgiveness program, established in 2000, decreases by 15% thedebt of students who have completed their studies without interruption and in theexpected timeframe, receiving a bursary from the Loans and Bursaries Program eachyear (FEUQ, 2010b, p.33). The number of recipients is relatively low; approximately 998out of the 27,276 students who took out loans in 2008-2009, or less than 4% of formerstudents from that year, participated in the debt forgiveness program.

• The tax credit offered on interest paid on a student debt is anotherincentive. Both levels of government offer a tax credit. It is for 20%, reportable, non-transferrable and non-refundable at the provincial level (FEUQ, 2011a, p. 9) and 15% atthe federal level, with the same terms.

• In addition, it is possible to temporarily stop repayment because of apregnancy of 20 weeks or more, following the birth or adoption of a child, because of atemporary disability, or because of election as a permanent member of a nationalstudent association.

It is, nevertheless, important to note that student loans, despite their advantages, alsohave their disadvantages, the main one being the prohibition against filing for

bankruptcy. The Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3) was modified in1997, 1998 and 2005 to prevent the inclusion of student debt in the bankruptcy processfor seven years (five years in special cases). These modifications were made followingan overhaul of bankruptcy law in 1992 that went about

“…the abolition of preferential debt for debt owed to the government. This change relegatesthe Crown to the level of ordinary creditors that share in the prorated assets of the debtor aftersecured creditors and preferential creditors. The Crown did not therefore have priority overother creditors concerning its loans to students” (Smith, 2002).

New regulations concerning bankruptcy are controversial, especially since they wereestablished at a particularly difficult time for Canadian students, as student debtreached levels never before seen in recent history. It is nevertheless important to note

that bankruptcy has significant consequences on an individual’s credit rating andimpacts the interest rate of future loans.7

As a corollary to the impossibility of filing for bankruptcy, some loans becomeirrecoverable debt, despite attempts at repayment. From the moment that repaymentdifficulties are noticed, the financial institution can transfer the loan to the paymentdepartment for Student Financial Assistance. In these cases, it falls on the Québecgovernment to vouch for the loan and become the creditor, repaying the financialinstitution. Failing to repay student debt entails serious consequences:

• Ineligibility for the preferential repayment program

• Tax reimbursements from Québec as well as provincial sales tax credits will be applied torepayment of student debt, in compliance with section 31 of the Act respecting the ministère du Revenu.

• Ineligibility for the Loans and Bursaries Program if at least 50% of the student debt is not.

7 For more information, consult Raymond, Chabot Inc. “La faillite personnelle,”http://www.avocat.qc.ca/public/iifailliteperson.htm [consulted June 1, 2011)




• The financial institution may notify credit reporting companies.8

Approximately 14% of outstanding loans since 1996 were repaid by the government of Québec (AFE, 2010a, p. 67). In addition, Québec’s education ministry receives between9,000 and 13,500 claim requests from financial institutions concerning loans; close to9,000 are repaid annually.

It appears, then, that loans granted by Student Financial Assistance have someparticularities. They have advantages and disadvantages, compared to regular loanstaken out directly from financial institutions.

2.3. Loans from Financial Institutions

Financial institutions offer a range of products. We have taken a survey of two mainfinancial products that affect student debt: credit cards and lines of credit. In each case,two types of offers generally exist: those open to all students and those open to onlyspecific students in specific fields of study. We will note here that personal loanstargeted directly to students do not exist; lines of credit, being relatively flexible, fill thisrole. Yet lines of credit imply less upstream planning than a personal loan, which grants

a fixed sum (similar to a student loan).In order to establish this section, we have taken a survey of the information available onthe websites of eight financial institutions in Québec, which will be designated“Financial institution 1, Financial institution 2,…, Financial institution 8” in thefollowing analysis. The complete results will be present in appendix I. We will alsopresent, when pertinent, selling points mentioned by these lending institutions.

2.3.1. Lines of Credit and Credit Cards: Differences

Lines of credit and credit cards are two forms of consumer credit.9 Both are revolvingcredit: the line or card must be paid off before lending can begin again. Here, thesimilarities end.

Credit cards generally have high interest rates (at least 19% annually) and a relativelylow credit limit. Nevertheless, consumers generally have twenty-one days afterreceiving the balance to pay; if they do not pay, interest fees will be charged.

Lines of credit are linked to the consumer’s chequing account. The interest rate ismarkedly lower than for a credit card; on the other hand, interest is charged from themoment of lending. The credit limit is often much higher than for a credit card.

The Office of Consumer Affairs’ financial calculator10 offers a practical illustration of thedifferences between lines of credit and credit cards. Imagine, for example, a studentwith a credit card at an interest rate of 19.4% and a line of credit at an interest rate of 4.5% who wants to purchase $1,000 of goods.

8 AFE “Repayment” http://www.afe.gouv.qc.ca/en/apresEtudes/remboursement.asp [consulted May31, 2011]9 Dugas, Sylvie. “La marge de credit personelle: est-ce une bonne affaire?” servicevie.com.http://www.afe.gouv.qc.ca/en/apresEtudes/remboursement.asp (consulted July 11, 2011) 10 Office of Consumer Affairs. http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01812.html (consulted July 15, 2011)




If the student uses the credit card to finance the purchase and makes only the minimumpayment of $40, he or she will pay $291.47 in one year in interest fees on the credit cardand $52 on the line of credit. The difference is significant.

2.3.2. Main Features of Regular Student Loans from Financial Institutions

We will now study two financial products: credit cards and lines of credit. We will notethat all financial institutions have a section on their website that is easy for students toaccess. Some even have a sub-section designed specifically for them, offering variousfinancial planning tools as well as the institution’s different financial products. It is to be noted that the references used for this section are all found at the end of section 2.3.2.

Credit cards

Table 2-5 illustrates the main features of student credit cards. Credit cards are by far themost common financial product for young adults. They are offered by six of the eightfinancial institutions surveyed: As for the other two institutions, one offers a similarproduct, targeted generally to youth, whereas the other one advertises student cards,

but they do not have any special features.The products are all similar: they have high interest rates and no annual fees. Generally,however, they offer options meant to cultivate students’ customer loyalty: five out of thirteen cards offered have a point system and three offer cash back programs.Averaging out the annual fees, two institutions offer a reduced interest rate.

It appears that the main objective of student credit cards is to gain customer loyalty,offering a seemingly free entrance into the world of credit. It is worthwhile to note thatthe credit limits are not provided on the websites: none of the financial institutionsmention them, as they vary depending on the borrower’s credit rating. Financialinstitutions have become known for their propensity to offer consumers excessive creditlimits, leading to more severe legislative framework by the Québec government, as we

will see later.Table 2-5: Main features of student credit cards

Product offered Features

Student Credit Card Six out of eight financial institutions offer them.One offers a similar product for youth

Interest Rate Between 19.4% and 19.99%; two institutions have arate of 21.99% for cash advances

Reduced Interest Rate Two institutions offer this option

Annual Fees None of the cards have fees; some options mayincur annual fees

Points Program Five out of thirteen cards have a points program

Cash Back Program Three out of thirteen cards have a cash back program of between 0.5% and 1% per dollar spent




A frequently mentioned argument for student credit cards is building a good creditrating:

Financial institution 3: Nothing could be simpler! It’s a credit card adapted to the realitiesof student life: it has flexible admissibility criteria and gives you the opportunity to start building credit now – a real advantage when the time comes to make important firstpurchases, such as a car.11

Other institutions stress specific features, including the points system, which isintended to increase use of the credit card. In every case, they emphasize the idea thatusing a credit card is a solution specially adapted to the needs of students:

Financial institution 6: Finally, a card logically thought out for students. The card offers anaccelerated Moneyback reward program and a host of other great benefits. It's the ideal choicefor students who spend wisely and want to earn valuable cash rewards - that can really addup! And best of all - there's no annual fee!12

Financial institution 5: A premium no annual fee credit card. Earn 1 point for each $2 spent.Redeem points for travel, merchandise, gift certificates/cards & more.13

The credit card is presented as a complementary means of financing that lets studentsenter the world of consumption easily, profitably, and without anxiety. Student lines of credit will prove to be somewhat different in their presentation.

Lines of credit

We have seen that lines of credit are distinguished from credit cards in several respects.All financial institutions surveyed here offer student lines of credit. The amounts at playare very high: the majority of institutions offer a maximum annual line of $10,000 with amaximum debt level of $40,000 for four years of study. Repayment is made after thecompletion of studies, similar to a student loan; however, interest is charged during thestudy period. The interest rate is variable; currently, it is 4.5% at financial institution 1, but varies depending on several criteria. Table 2-7 breaks down the main features of thesurveyed student lines of credit.

Table 2-7: Main features of student lines of credit

Product Offered Features

Student line of credit Offered by all financial institutions

11 Laurentian Bank. “Student VISA Black.”https://www.banquelaurentienne.ca/en/personal_banking_services/my_ideas/ideas_student_visa_black.html 12 Scotiabank. “L’earn VISA card.”http://www.scotiabank.com/cda/content/0,,CID13398_LIDen,00.html (consulted July 11, 2011) 13 RBC Royal Bank. “RBC Rewards Visa Gold.” http://www.rbcroyalbank.com/credit-cards/student-credit-cards/index.html (consulted July 11, 2011)




Maximum annualamount for a full-timeundergraduate student

$5,000: 1/8 institutions




Specific features Financial institution 2 offers a $15,000 line of creditfor the first year and $10,000 for subsequent years

Financial institution 4 is the only one to describe itsline of credit as ”working capital”

Maximum borrowingperiod

Usually four years, with a maximum debt load of $20,000 to $45,000 depending on the line of credit’sannual maximum

Repayment terms None of the lines of credit must be paid back during studies, apart from interest.

One out of eight institutions allows a six-monthgrace period after the end of studies beforerepayment; the others allow one year. One reducesthe grace period to six months for students wholeave school without a diploma.

The length of repayment varies between 7 and 20years.

Interest rate Variable depending on the financial institution andindividual credit ratings.

While credit cards are presented as a means of paying for some common expenses,student lines of credit are presented in many different ways. Some financial institutionsadvertise them as a complementary means of financing university studies,compensating for gaps in the Loans and Bursaries Program:

Financial institution 1: If they do not qualify for government financial aid or if it is not enoughto cover their educational costs or if you want o see your financial needs met to study inpeace, sheltered from financial worries. This line of credit is reserved to students, withoutage limits.

Financial institution 3: Studying or returning to school made easy! Get a load off yourshoulders with the student line of credit. This line of credit is especially tailored to yourstudent needs so you can concentrate on your academic success while enjoying a little muchappreciated financial help.

Others suggest financing the entirety of studies on a line of credit:Financial institution 2: In your first year of college or university, everything is new includingthe cost of your education. A Student Line of Credit helps you plan for the expenses youexpect and the ones you don’t.

Financial institution 4: What if you don’t have all the funds you need to finance youreducation? Should that prevent you from going ahead with your plans? No, especially whenyou consider that your education is one of the most important investments you’ll make inyour life.




Moreover, financial institution 4 seems to adopt a discussible approach to studentcredit, by describing its line of credit as student working capital, name that has verylittle to do with a personal loan. It is also notable that among the financial institutionssurveyed, only four mention the existence of student loans subsidized by the Quebecgovernment, while financial institution 8refers to an aid program for pan-Canadianstudies, which does not exist in Quebec. The other four institutions, all of which offergovernment-guaranteed loans, do not mention this in their documentation for students.We have reached the end of the discussion on general products offered by financialinstitutions. They are mainly of two types: credit cards and lines of credit. The formerare mostly presented as a means of building a credit history; the latter, as acomplementary method of financing, or to finance studies in their entirety.

References (classified by alphabetic al order):

Banque Laurentienne, « Marge de crédit étudiante ».https://www.banquelaurentienne.ca/fr/services_particuliers/mes_idees/idees_marge_de_credit_etudiante.html[Consultée le 11 juillet 2011]

Banque Laurentienne. « VISA noire étudiante »https://www.banquelaurentienne.ca/fr/services_particuliers/mes_idees/idees_visa_noire_etudiante.html

Banque de Montréal. « Marge-crédit Aux étudiants ». http://www.bmo.com/accueil/particuliers/services- bancaires/prets-et-prets-hypothecaires/prets-et-marges-credit/marges-credit/etudiants/etudiants [Consultée le 11 juillet 2011]

Banque Nationale. « Fonds de roulement étudiant ». http://bnc.ca/bnc/cda/productfamily/0,2664,divId-2_langId-2_navCode-10020,00.html [Consultée le 11 juillet 2011]

Banque Scotia. « VISA Savoir Scotia pour étudiants ».http://www.scotiabank.com/cda/content/0,,CID13507_LIDfr,00.html [Consultée le 11 juillet 2011]

Desjardins, « Marge de crédit Avantage étudiant »http://www.desjardins.com/fr/particuliers/produits_services/financement/marge_credit/mc_avantage.jsp[Consultée le 11 juillet 2011]

RBC Banque Royale. « Visa Or RBC récompense ». http://www.rbcbanqueroyale.com/cartes/student-cards/index.html [Consultée le 11 juillet 2011]

2.3.3. A Targeted Offer: Financial Products Offered by Field of Study

Several institutions offer financial products directed specifically to particular studentsregistered in programs judged to be more profitable. These products are divided, onceagain, into credit cards and lines of credit. It is to be noted that the references used forthis section are all found at the end of section 2.3.3.

Credit cards

Only three institutions offer credit cards targeted by field of study. The benefits arelargely similar to regular credit cards; however, it can be presumed that the credit limitsoffered are higher. To note: financial institution 4 is the only institution that offers anamnesty on annual fees for student credit cards for only two years, while givingstudents in specific fields access to the most prestigious credit cards, just as do financialinstitution 5 and financial institution 6. This practice encourages the idea that students belong to the social group corresponding to their future profession, while still havingthe financial means of a student. In the section 3.2.2., we will discuss feelings of attachment to a social group that does not correspond, economically speaking, tostudents’ actual situations, and how this may contribute to a false sense of consumerspending power, prompting students to exceed their credit capacity.




Table 2-8: Features of credit cards offered for targeted fields


Credit card for targetedfields

Offered by three out of eight institutions

Fields targeted Healthcare: three institutions

Law: two institutions

Administration: one institution

Engineering: one institution

Interest rates Between 19.4% and 19.99%; one institution has arate of 21.99% for cash advances

Reduced interest rates One institution offers an optional reducedinterest rate

Annual fees Three institutions out of four offer the productwithout annual fees; one offers two years of exemption from the annual fees on the card

Points program Offered by two institutions

Cash back Offered optionally by one institution

Lines of credit

Seven out of eight financial institutions surveyed offer lines of credit withhigher limits for some targeted fields of study: only financial institution 3

does not. Healthcare professions are the most frequently targeted, with sixinstitutions, followed by administration and law with five institutions, MBAswith four institutions and engineering with two lending institutions. Thelines of credit are much more generous. They range from $25,000 to $200,000for the highest lines. The interest rates are often better. The interest rate isoften more advantageous. The only interest rate surveyed is for financialinstitution 4, which offers rates from 3% to 4.5%.

Table 2-9: Main features of student lines of credit by field of study


Student line of credit byfield of study Offered by seven out of eight financial institutions

Targeted fields of study Healthcare: Six institutions

Administration: Five institutions (mainly foraccounting)

Law: Five institutions

MBA: Four institutions




Engineering: Two institutions

Specific features Students must be in the program to receive benefitsof the line. If they change programs, the institutionmay require repayment.

Maximum period of

borrowingUsually four years, with a maximum debt load of $25,000 to $200,000 according to the line of credit’sannual maximum

Repayment Terms None of the lines of credit must be repaid duringstudy excepting interest payments.

One institution out of seven allows a grace periodof six months after the end of studies before beginning repayment; the others allow one year.One reduces the grace period to six months forstudents who leave school without receiving adiploma.

The length of the repayment period varies between7 and 20 years.

Interest Rates Variable depending on the institution andindividual credit ratings.

Interest rates vary depending on the field of study.It varies from 3% to 4.75% in financial institution 4.

Lines of credit, as we have seen, are often presented as either acomplementary or principal method of payment for university studies. Table2-10 illustrates the distribution of debt accumulated at a financial institution,which will be discussed in the Error! The requested resource was not found section. Nevertheless, we can note that the vast majority of students hold lessthan $5,000 in private debt. However, a small but worrisome amount of students accumulate more than $20,000 worth of private debt – 11% of students who borrow.

Table 2-10: Distribution of debt accumulated at financial institutions

Accumulateddebt Percentage

oftotalnumberof

students

Percentage

ofstudentswithdebt

0 62%

1 –5,000 21% 55%

5001 –10,000 8% 20%




10,001 –15,000 4% 10%

15,001 –20,000 2% 5%

20,001 –25,000 1% 4%

25,001 –30,000 1% 3%

30,001 –35,000 0% 1%

35,001 –40,000 0% 1%

40,001 –45,000 0% 1%

45,001+ 0% 1%

Total 100%

Totalindebtedstudents 100%

Sales policies for these products are even more seductive than for regular products.Financial Institution 4 describes its student line of credit as follows:

The Bank Student Line of Credit is a convenient and flexible solution for: Financing all yourannual tuition and education-related expenses. Become your only transactional source, sinceit functions as a Chequing account.

Financial institution 1 emphasizes the high cost of a university education:

Who should get this loan? University students who want to meet substantial financial needsrelated to their program of study.

These institutions are selling the possibility of living without financial worries andwithout needing to work. And yet, as we will see later, high debt is a source of significant stress, which students do not necessarily realize, not yet having a credithistory or models among their friends and family. The idea of paying back an entireyear’s expenses is also mentioned.

Financial institution 2: Pursuing a professional designation demands focus. Now,Professional or Medical Student Lines of Credit let you stay focused on what’s important—your studies.

Financial institution 7: Borrow up to $205,000 (depending on your field of study) to helpcover tuition, rent, books, school supplies, living and residency costs1 for your program.14

Costs associated with loans are only rarely mentioned or explained. The consequences

14 CIBC. “Professional Edge Student Program” https://www.cibc.com/ca/loans/prof-edg-st-pers-ln-credit.html (consulted July 11, 2011)




of dropping out or changing programs are only rarely stated. The products aremarketed in a reassuring way, but incur high costs. Some protection does, however,exist.

References (classified in alphabetical order) :

Banque de Montréal. « Marges-crédit aux étudiants (professions libérales et médecine) ».

http://www.bmo.com/accueil/particuliers/services-bancaires/prets-et-prets- hypothecaires/prets-et-marges-credit/marges-credit/etudiants/professions [Consultée le 11 juillet 2011]

Banque Nationale. « Fonds de roulement étudiant » http://bnc.ca/bnc/cda/content/0,2662,divId-2_langId-2_navCode-17203,00.html?stab=2 [Consultée le 11 juillet 2011]

CIBC. « Programme étudiants service classe professionnels CIBC ». https://www.cibc.com/ca/loans/prof-edg-st-pers-ln-credit-fr.html [consultée le 11 juillet 2011]

Desjardins. « Marge de crédit STRATÉGIQUE étudiant ».http://www.desjardins.com/fr/particuliers/produits_services/financement/etudiant/puissance_d.jsp [Consultéele 11 juillet 2011]

1.1.1. Protection Offered

Consumer protection laws offer minimal protection. Concerning credit cards, theinterest rate is fixed and cannot be changed without the consent of both parties; also,the credit limit cannot be raised independently.15

Bill 24, introduced in June 2011 (Assemblée nationale, 2011), proposes closer control of consumer credit. Some proposals may affect student credit, including the following:

• Prohibiting false representation that suggests credit can improve anindividual’s financial situation

• Prohibiting the granting of a higher credit limit than requested by theconsumer

• Imposing minimum payments on loans that will reach 5% of the full term.We will suggest additions and modifications in the “Recommendations” section. It is, of course, possible to declare bankruptcy on a private loan, contrary to a government-funded student loan. As we have mentioned earlier, this is a painful rocess.

1.4. Public and Private Loans: Advantages and Disadvantages

Which is more advantageous, a public loan or a private loan? Public loans have somenotable advantages. They are subsidized, which means that students will pay more forthe same loan obtained privately than publicly. Table 2-12 gives an example. It is basedon the following information:

• A student borrows $2,440 every September for three years, the same amount

as a public loan for a full-time university student registered for 30 credits over eightmonths.

15 Office de la protection du consommateur. “Credit card”http://www.opc.gouv.qc.ca/webforms/SujetsConsommation/FinancesAssurances/ContratsCredit/CarteCredit_en.aspx (consulted July 11)




• The student has a line of credit with an interest rate of 4.5% and only paysinterest while studying.

• Figures have not been adjusted for inflation.

• Calculations were made with Desjardins’ simulation calculator.16

We have calculated that this loan, which is not subsidized by the government, wouldcost a total of $658.80 while the student was in school. A government-funded loanwould cost nothing in interest. Clearly, the amount of private loans can be higher ordistributed differently.

Table 2-12: Interest costs for a loan with a line of credit

Volume ofdebt

Annualrepayment

Year 1 $2,440 $109.80

Year 2 $4,880 $219.60

Year 3 $7,320 $329.40

TOTAL $7,320 $658.80

Government-funded loans have other advantages, such as an interest rate that is fixed by law, a tax credit, the deferred payment program and the debt forgiveness program.In addition, they are accompanied by assistance in the form of substantial bursaries.

Private loans are much less advantageous. They do present two advantages, however.

The borrower can choose the amount to borrow, while it is fixed in the case of publicloans. It is also possible to declare bankruptcy. However, the interest rates are higherand legal protection is minimal. Additionally, students with more “at risk” profiles willreceive less advantageous terms, which goes against a policy of social mobility. Thefeatures of private loans explain why the government of Québec must subsidize andregulate student loans!

16 http://www.desjardins.com/fr/simulateurs/marge_avantage/




3. Impacts of student indebtedness: what the scientific literature has tosay

The FEUQ has studied the question of student indebtedness and its multifacetedimpacts on the student population many times. We must proceed with a few

preliminary warnings. First, it is difficult to distinguish the specific impact of loans.Some studies have, but most do not. Studies rarely distinguish forms of indebtednessand restrict themselves to a study of public student debt. Therefore, there is littleliterature on student private debt due to a lack of data. The current study aims to makeup for this loss.

We will start by presenting a few methodological and theoretical elements. Then, wewill discuss indebtedness generally by painting a portrait of the situation of youngQuebeckers. Then we will present the impacts of student indebtedness based on theuniversity path before, during and after, and synthesize them.

3.1. Methodology

This section aims to provide a certain methodological foundation that will be useful forwhat follows. We will present in sequence the notion of methodological individualismand how it is different from the rational choice theories (RCT), the limits of the review of literature and an introduction to foreign university systems.

3.1.1. Methodological individualism and rational choice theory

We can perceive the individual in several different ways: the behavioural analysis willvary depending on whether the analysis is based on the balance of power in a society,the relationship between social classes, the cognitive processes at work in the decision,etc. This study is mainly based on the theory of methodological individualism. It is based on two ideas: a rational and understandable decision process and postulates

limited by the actor’s behaviour.We can choose to analyze the individual’s behaviour in several different ways. Thepostulates adopted will tinge the result: these postulates are all prescriptive, more orless. The TCR has this fault that methodological individualism (MI) does not. Therefore,the three postulates regarding the actor’s behaviour are as follows (Boudon, 2002).

1. Individualism. Any social phenomenon is a product of the individual. Therefore,the individual actor has absolute theoretical decision-making freedom.

2. Understanding. Any human action is understandable. MI rejects the idea thathuman actions are motivated by irrational and evasive motives.

3. Rationality. Any action has a meaning for the individual. The rationality at work,

however, is multifaceted: for example, an individual does not only research aprofit, but his actions may be motivated by the pursuit of happiness, the will tostart a family, etc. Thus, the rationality is much more complex than strictlyeconomic rationality.

Rationality needs a rational decision process. An example of such a process is thefollowing (Mercier, 2004, p. 149):

1. Identify values and goals to be met




2. Study all possible alternatives to meet these goals;

3. Research information on efficiency/the efficiency of various alternatives;

4. Compare alternatives and their consequences;

5. Choose the alternative that maximizes the values and goals;

6. Implementation;7. Feedback.

Presenting broader postulates, MI excludes more normative RCT postulates that areconsequentialism, selfishness, and the cost-benefit calculation. It also excludesNietzschean analyses from its conceptual framework, which add the will to power, orMarxist analyses, which add class interests. This also allows for an analysis that re-examines the critiques of the classic notion of rationality (including bounded rationality by Herbert Simon17). However, at times, the student will be conceptualized in a MIcontext with the addition of cost-benefit calculations when necessary.

The typical application of RCT in the case of teaching gives the preconceived notion

according to which new students should operate a simple cost-benefit calculation withthe intention of evaluating the economic profitability of a given university education.Going beyond simplistic and normative RCT postulates, the scientific literaturepresented here suggests behaviour of another nature. It also raises existential caseswhich tend to demonstrate the negative effects of student indebtedness on the variouslevels of students’ paths. Therefore, it is clear that like any human being, the student isnot only a cold and calculating being that seeks to optimize his private benefits: he is a being of flesh and blood, fuelled by various passions.

3.1.2. Difficulties encountered

The review of literature also presents some difficulties of another nature. First, it is often

sometimes difficult to separate the specific affect of student indebtedness from otherfactors that play on the participation and access to university studies. The readerfamiliar with the questions of access to university studies may notice certain similarities between affects noticed here and those which we can attribute to the tuition bill, forexample. It is also important to remember a precaution that must always be kept inmind:

[…] social sciences are not exact sciences and may not lead to a unique solution or toperfectly laid out public policies like mathematicians who would solve equations. In socialmatters, problems are rarely solved once and for all. (FCBEM, 2009, p. 238)

This remark is particularly true in the case of student financial assistance systems, whichare complex machines. We cannot evaluate them by the yardstick of a single givencriterion (whether it be indebtedness, accessibility to the assistance system,perseverance, success, etc.) without the risk of truncating reality. This study presents adifferent ambition, by wanting to paint the widest portrait possible of the studentindebtedness situation in Quebec.

17 Bounded rationality affirms that the quality of a decision is limited by the quality of availableinformation, the decider’s cognative limits and the time dedicated to making the decision.




3.1.3. Foreign university systems: an introduction

Canadian scientific literature, and moreover, Quebec scientific literature, is relativelylacking in studies on student indebtedness. Even among the Canadian group, Quebec isan exception with its own system of loans and bursaries and relatively low tuition fees.However, when we study the foreign literature (which is much lengthier, mainly in

Great Britain and the United States), it is important to take different social contexts intoaccount, mainly with regard to access to education policies. Therefore, we will re-examine the OCDE’s categorization (OCDE, 2010, indicator B5), which identifies fourmajor types of public policies related to access educations:

Ø Low tuition fees and generous assistance: Scandinavian countries

Ø High tuition fees, developed public assistance: Australia, Canada, UnitedStates, New Zealand, The Netherlands, United Kingdom

Ø High tuition fees, little assistance: Korea, Japan

Ø Low tuition fees and little assistance: Austria, Belgium, Spain, France, Ireland,Italy, Portugal, Czech Republic

With tuition fees on the order of $2,500 in 2009, Quebec qualifies as a jurisdiction withhigh tuition fees (more than $1,500 US) and developed public assistance. However, it isimportant to note that tuition fees there are substantially lower than in other Canadianprovinces and in the United States, and that assistance is most often given as bursaries.Access to education in Quebec is also more equal than in these jurisdictions, albeit arecent tradition. It is important to consider when comparing Quebec’s situation to thatof the United States, Great Britain or even other Canadian provinces.

3.2. Indebtedness: a general discussion

Student indebtedness is a subgroup of a larger phenomenon, that is consumer leverage.However, it is a subgroup with very particular rules. It is not lacking in interest topresent the contours of consumer leverage according to two aspects: the relationship of students towards credit and explicative factors of indebtedness.

3.2.1. Credit among Quebec students

Lachance, Beaudoin et Robitaille (2005) surveyed 980 young Quebec adults from 18 to 29years of age on their credit use and consumer leverage. We will use some of these datato paint a portrait of the indebtedness situation.

First of all, it is important to note that the use of various financial products hasskyrocketed from 1994 to 2004, as shown in Error! Reference source not found.. Creditard use has increased 32%. The number of students with a line of credit doubled and the

number of students with a personal loan increased significantly

18

.

18 The data from Young, 1995, do not allow us to know precisely if student loans are included inthe personal loans perimeter. Therefore, we included both types of data from Lachance,Beaudoin and Robitaille.




Figure 3-1: Use of various credit products among students 18 to 29 years old, progression from 1994 to 2004

Source: Young, 1995 and Lachance, Beaudoin and Robitaille, 2005

However, this increase in the use of credit is not accompanied by enough knowledge.Students with at least one debt had an average success rate of 4.7/9, 52.2%, on the nine-question questionnaire on credit. The authors noticed that the main sources of information about credit are the family (37.8%) and personal experiences (25.4%). Schooltakes third place with 13.1% of respondents. Attitudes towards credit are mixed withpositive and negative opinions: according to the authors, young adults who enter thelabour market, who must use credit, were thought to have a more positive perceptionthan young adults who live with their parents or who are students.

As for knowledge of the mechanics of various forms of indebtedness, secondary schoolgraduates have little knowledge. The FCBEM (2006) revealed that secondary schoolstudents knew more about credit cards (46% reported having minimal knowledge aboutthis topic) than government loans (40%).

Credit is increasingly common among students, which brings about vulnerabilities withregard to financial knowledge. In addition, financial products are increasingly commonamong students as well.

3.2.2. Explanatory factors of indebtedness

Duhaime (2001) studied the situation of over-indebted households in Quebec. Followinga content analysis of 49 interviews with over-indebted Quebec households, it presents a

modeling of what he calls the cycle of over-indebtedness. The first phase, the initiationphase, is what interests us the most. Unfortunately, the author does not study studentsspecifically. However, in many cases, consumption habits seem to start at the universitylevel: the author mentions the case of a doctor whose over-indebtedness started duringhis premed.

First they note that of the households studied, 23.5% of university graduates expect tofinish their undergraduate studies with a student debt beyond $15,000, whichcorresponds to the average consumer debt mentioned by Duhaime for over-indebted

0,00%!10,00%!20,00%!30,00%!40,00%!50,00%!60,00%!70,00%!80,00%!

Carte!de!crédit! Marge!de!crédit! Prêt!personnel!

sans!prêt!étudiant!

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1994!2004!




households. An important number of students have a debt that could lead them into theover-indebtedness cycle. High debt is a necessary but not sufficient condition for entryinto the over-indebtedness cycle.

The credit initiation phase starts with the beginning of independent life, outside of thefamily home. The credit desensitization process begins, given the few competing

obligations with regard to indebtedness. The emergence of unexpected or inappropriatepurchases puts the subject on the track to over-indebtedness. Social pressures from theimmediate environment also contribute to making the people concerned go into debt.

Overall, three major explanatory factors may contribute to the entry into the over-indebtedness cycle:

1. Traumatic events. Cameron and Golby (1990) validated this “exogenous shock”hypothesis on two factors, namely the bankruptcy of his business and the quick lost of income. This factor is applied difficultly to our study: students aregenerally relatively young and, therefore, have less to loose. However, markedinstability in the labour market could cause financial problems, especially sincestudent jobs are frequently affected by economic cycles, and young workers are

often laid off during economic downturns.2. Insufficient income. Cameron and Golby did not validate this hypothesis:

however, students are a particular group, who must necessarily go into debt inmany cases given the make-up and insufficiency of sources and methods of financing university studies, combined with a sometimes deficient financialsupport.

3. Compulsive buying, which can be expanded to psychological factors. On thewhole, students are a population with an aversion to lower indebtedness than thegeneral population, already indebted.

Lea, Webley and Walker identified the factors that influence the level of debt and the

propensity to go into debt (1995(, which can be grouped into “social variables” and“individual variables”. They used this model to study the case of British consumers based on attitudinal scales built in order to have a faithful portrait of the relationshipwith indebtedness. These attitudes and situations are interpreted based on variouslevels of debt: no debt, average debt and heavy debt. Overall, three factors predictindebtedness: economic factors, financial management style and economic socialization.The others don’t have an independent impact on indebtedness.

Social variables

ü Economic and demographic factors. The fact of being a woman, working parttime, being a housewife or being unemployed all foretells high indebtedness.Weak incomes, being a renter and the number of children as well. The level of poverty foretells more than half of the cases being assigned to oneindebtedness group or another.

ü Social support for indebtedness. Translate public attitudes towardsindebtedness. Indebtedness is more tolerated than it was at the beginning of the twentieth century. In addition, credit is clearly more wide spread, as wementioned earlier. Indebted consumers believed that their circle would bemore understanding overall.




ü Economic socialization. Variable which translates family attitudes towardsindebtedness: people from more well off families seem to have less aversiontowards indebtedness. This is the third major factor.

ü Social comparisons. Identifying the consumer in a social group that is not his:this means that he might live beyond his means. The survey confirms it.

Ø Individual variables

ü Financial management styles. Seriously indebted people are often unable tosuitably manage their finances. After economic factors, this is the mostimportant factor.

ü Consumer behaviour. Consumers who classify unnecessary expenses asnecessary expenses are more at risk of going into debt. In the study, they saythat Christmas gifts, cigarettes, the car and the telephone are priorities.

ü Time horizon. Consumers who live on short time horizon risk not being ableto delay acquiring property.

ü Attitude towards debt. A positive attitude towards indebtedness is usuallycorrelated with higher indebtedness. However, the study does not confirmthis.

ü Control centre. People who feel that they have their financial situation undercontrol risk a lower instance of indebtedness. However, the study does notconfirm this.

Therefore, we see that the situation of indebtedness among students is not necessarilyeasy. With little knowledge about sound credit use, they can easily fall into the over-indebtedness trap. Financial products designed for them, in which the principal doesnot have to be repaid during their education, and which tends to encourage a socialcomparison that leads to over-indebtedness, creates unnecessary risks and problematicindebtedness situations.

3.3. Preventing the start of university education

The first category of effects that we will study is the affects that are noticeable beforeeducation begins. Student indebtedness delays students starting university.Multifaceted risk is perceived differentially depending on social origins. Families play acrucial role in reducing the aversion to indebtedness, and the costs tend to guide studentchoices irrespective of more academic volitions.

3.3.1. Delaying or preventing students from starting university because of financialconstraints

Julie Dubois, of Human Resources and Skills Development Canada (HRSDC), studiedthe trends of indebtedness of students in the Canadian Student Grants Program (CSGP)in 1990, 1995 and 2000 (Dubois, 2006). A government loan increases the probability of astudent delaying education 1.5 times among men and 1.8 times among women. Aparental contribution or employment income do not have the same impact. It is alsointeresting to note that the effect is much lower in college (1.2 times among men, 1.1




times among women, where the amount of debt is generally lower and the path isshorter.19 Such a delay may be explained in several ways, among others, by the differentprofile of students who take out a government loan (students from less well off families,for example). Combined with the debt aversion phenomenon, which we will see laterwe can presume that a considerable portion of students who wind up taking out a loandelay beginning their education in order to create a personal savings to limit the needfor other forms of indebtedness during their education.A delay in beginning a university education decreases both a diploma’s individual andcollective profitability, by decreasing the portion of the new graduate’s active life, inwhich he contributes fully to the government’s finances by paying higher taxes, agenerally recognized result of a salary associated with a university education.

Other data are troubling. Several surveys from Statistics Canada ask secondary schoolgraduates to give their option about the reasons that prevent them from attendinguniversity (FCBEM, 2004, p. 103):

Ø Financial obstacles represented the main reason for not attending universityamong 20% of respondents (according to the survey of graduating students

and the study on postsecondary study participation);Ø Financial obstacles are cited by 36% of secondary school graduates who are

not enrolled in postsecondary studies as one of the factors that prevents themfrom currently pursuing a university education, or from pursuing one in thefuture (data from the ÉJET).

Financial reasons, including, first and foremost, the likelihood of taking out a major debtwithout the assurance of being able to repay it, seems to play a major role. Morepsychological factors are also involved.

3.3.2. A multifaceted risk: debt aversion and sticker price

Archer and Hutchings (2000) suggest that the perception of risk varies based on socialclass. Therefore, British working class students have a greater aversion to risk than theircounterparts from other social classes. The authors postulate that building the notion of value, that is questions of risk, cost and benefit, varies based on social class. In focusgroups led with 109 British working class students, the others observed that thediscourse on diploma profitability was firmly established and, in every respect, seemedto be the prevailing discourse. However, access to university was often qualified as being a risky business, on the financial level (high opportunity cost) and academic level(risk of failure). Later on, we will see that student indebtedness is correlated withdropping out.

Two other mechanisms are at work. First, students from economically disadvantaged

environments present, in their conception of the cost of studies, a propensity to overestimate the cost of education and under-estimate its profitability.

19 In 1995, average debt was $9,500 at the college level and between $12,500 and $14,000 at theuniversity level, depending on the level of studies (Finnie, 2001 in Dubois, 2006).




Table 3-1: Canadians’ perceptions of costs and benefits of university education in 2003

Source: FCBEM, 2004, p. 109The rationality would, therefore, be modulated based on socioeconomic origins(Vossensteyn, 2005, in FEUQ, 2010). Finally, according to Finnie and Laporte, theaversion to indebtedness might dissuade 2% of Canadian youth from pursuing apostsecondary education. We note, however, that other financial reasons may be atwork: the proportion of students completely put off by the possibility of going into debtis significant, by considering the attractiveness of university education.

Callender and Jackson (2005) studied the aversion to indebtedness and the perception of university diploma profitability based on social class among British students. Likeseveral authors before them, they conclude that the aversion to indebtedness is greateramong the more disadvantaged, even if the perception of costs and benefits of

university is similar based on social class.The question of general effectiveness of loans for education was explored in 2007 by theFEUQ as part of a feasibility study on the conversion of loans offered by SFA intoeducation bursaries. Citing St-Jean (St-John, 1990 in FEUQ, 2007), the author affirms thatthe increase in assistance awarded, as loans did not help access to education for moredisadvantaged students, the ones who are Student Financial Assistance’s maincustomers.

3.3.3. The role of the family

Family plays an important role in access to education. We placed it at the beginning of university studies: however, we will see later that family plays a role in every step of theuniversity path. In this respect, changes in student debt policies may have variedimpacts. Christie and Munro studied this question in England. The relation to studentindebtedness is modelled as follows (Christie et Munro, 2003):

Table 3-2: Individual attitudes towards the financial costs and benefits of university education

Aversion toindebtedness

None Average Strong

Perception ofeconomic

profitability

None B A

Average E D CStrong

These are ideal types that are only rarely found among the population. We findeconomic profitability on one side and aversion to indebtedness on the other: this is amodified form of the cost-benefit calculation, in which costs are mainly indebtednessand benefits, the perceived economic profitability.




The authors studied the British case, questioning 49 students from two universities.They identify three types of students, mainly based on their relation to indebtedness:those who avoid debt (type C), those who are neutral (type D) and those who choose togo into debt (type E). Types A and B were not in the authors’ samples, and we canassume that they do not attend university, given that they do not perceive any economic benefits of doing so20. We also note that the British loan system is qualified as incomecontingent, contrary to Quebec’s system, and often presented as a cure-all to lift thenegative affects of student indebtedness.

The increase in the cost of education has varied impacts on students and their place onthe aversion to indebtedness scale is made based on family characteristics, according totwo criteria: their financial resources and their cultural capital21. These two resourcescondition entry into university. According to the authors, the strong presence of theseresources tends to change the students aversion to indebtedness:

Ø Students who consciously choose to go into debt simultaneously benefit fromhigher cultural capital and financial resources. Their parents value educationand help their children financially. Among them, access to university

education is considered the natural next step and students have access to aplethora of information about university education. These results areconsistent with those of Callender and Jackson (2005), who present perceivedprofitability and family encouragement as major attendance factors. Bothfamily capital factors are fully at work here and encourage the pursuit of university education.

Ø Those who are neutral towards indebtedness have more limited familycapital. Information on the actual costs of attending university is fewer, whichmakes the amount of accumulated debt during university more of a shock.Here, debt is not a choice but an obligation that we must try to limit.

Ø Those who are impervious to indebtedness generally receive a major parental

contribution, which allows debt to be avoided. Others have had difficultexperiences with their circle with respect to indebtedness, which makes themimpervious. Their studies are not necessarily economically profitable. To thiscategory, we can add students from low-income families, who are more likelyto have an aversion to indebtedness, which will determine access to universityeducation or not, according to Callender and Jackson (2005).

The authors conclude that we must proceed with caution in changing student debtpolicies. It is imperative to consider parents’ financial resources and the often under-estimated costs associated with entering university. Merani et al (2010) demonstrated so

20

Other models might come to different conclusions: this one is particularly simple, evensimplist, because it only considers one form of rationality. The choice of studies, as we will seelater, is a complex multifaceted dynamic.21 Concept of Bourdian sociology. Pierre Bourdieu analyzes contemporary society based on thefield theory, in which the accumulation of capital given is the condition of entry and progressionin a given field, which is its own microcosm of the social world that is governed by certain laws.In this case, the entry and prosperity in the university field is conditioned by the acquisition of cultural capital (promotion of education, effort) related to the university field.




for medicine. Comparing sociodemographic characteristics of Quebec and non-Quebecmedical students, the other points out the imposition of a tuition fee system and veryhigh student debt in the other Canadian provinces had profound, regressive impacts onprograms’ social make-up: it was 1.22 times more likely for a Quebec student to comefrom a low income environment.

Combined with the conclusions from Archer and Hutchings and Callender and Jackson(2003), we can infer a varied influence on the impact of student debt, depending on thetypology in table 3.1.

Ø Students who favour fields with little economic profitability risk quitting theirstudies if the assumed economic benefits are lower than the costs (type A).

Ø Students from more disadvantaged families tend to under-estimate the benefits and to over-estimate the costs; as loans increase more, the more theyrisk not attending university (type B)

Ø Students from more advantaged families see access to education as naturaland will go into debt without concern (type E) or have the required financial

resources to avoid student indebtedness (type C)Ø Students from more modest families, but who pursue education, are

somewhat sensitive to student indebtedness, and will try to limit it aspossible, while demonstrating a current but limited capacity of indebtedness.The student risks under-estimating the actual impact of the debt from theireducation. (type D)

Ø Others are straight out allergic to debt for various reasons and will avoid it atall costs (type C). Such is the case with students from low-income families,who have a strong aversion to indebtedness (Callender et Jackson, 2005).

Students with a negative attitude towards indebtedness (types A, C and D) are more at

risk. In a British study, students who had more positive attitudes towards indebtednesswere 1.25 times more likely to study at university (Callender, 2003 in Pennell et West,2005). And yet, these students usually present a more advantaged family profile.Therefore, a high indebtedness policy tends to stratify education based on social classes,even before entry.

3.3.4. Guiding the choice of field or area of study

If we go back to the typology of Error! Reference source not found. , certain studentspresent greater vulnerability than others. Their family capital is relatively low, and theiraversion to risk is high. Type C and D students, those who present an average to highaversion to risk, are particularly vulnerable. In a classic analysis based on RCT, weshould theoretically expect students to choose fields of study with high privateprofitability, instead of less profitable fields, which are more research based (such associal sciences – see Government of Quebec, 2008 in FEUQ, 2010a, p. 69 for rates of private profitability). Since these fields are perceived as less profitable, it is possible thatthe students’ academic path, which presents a greater aversion to risk, is changed forreasons that go beyond the student’s deep motivations. Others will simply not pursue auniversity education due to a lack of economic motivation to pursue them in the field of their choice.

Such an explanation allows us to understand why certain others have not made a




university are high, which increases the risk taken on by the student. It is here, withmuch more acuteness, that we notice the influence on the choice of postsecondarystudies that will be pursued. A typical student in a far away region may have six typicalchoices:

1. Not to pursue postsecondary studies

2. Complete a diploma of collegial studies and enter the labour force directly3. Complete a distance program.

4. Complete a program in a delocalized institution (see FEUQ, 2008) – however, theprogram offering is usually limited

5. Complete a program in a regional city (Saguenay in the Saguenay-Lac-Saint-Jeanfor example), and incur either high transportation costs (car maintenance), ormoving expenses for the entire duration of the program, for training that remainssomewhat limited (FEUQ, 2009 b).

6. Complete a program in a major urban area (Montreal, Quebec City or Sherbookein some cases), which offers a wider range of programs.

A student in a major area is usually only faced with choices 1, 2, 3 or 6, with verydifferent costs. The choice of attending university is made easier by lower costs, a directconsequence of the slightest requirement to relocate.

3.4. During university: a break

It is usually believed that student indebtedness hinders academic success. It tends tocreate dropouts, especially among the most disadvantaged, both directly and indirectly, by generating a need to provide for oneself by working rather than indebtedness. Thepsychological impacts may be great, and a major debt harms access to graduate studies.

3.4.1. A source of dropping out for at-risk students

Several studies have observed that student loans have negative effects on academicsuccess. Don bin Kim (2007) studied the impact of total indebtedness on programcompletion. To do so, she studies the first-year loan amount and the likelihood of academic success. The author drew troubling conclusions:

Ø Each $1,000 annual loan increase has a greatly varying impact based onincome. We observe an increase in dropouts of 1.6% for each $1,000 loanincrease for students from the most disadvantaged families (Kim, 2007, p. 85).The relationship exists, but is much less marked among the middle class,where as high income students are positively influenced by a loan increase.Increasing student loans tends to be a regressive policy.

Ø The graduation rate decreases as loans are increased among students fromminority groups (Asians, Hispanics and African Americans); the oppositeeffect is seen among white students, usually more advantaged. AfricanAmericans are the most disadvantaged.

We also highlight that previous studies show a negative link between loans and success based on ethnic origin (Finke, Porter et Dub rock, 2000; Thomas, 1998 in Kim, 2007) orfamily income (Johnson, Mont Marquette et Deckle, 2003).




From a more general point of view, student financial assistance usually has a positiveimpact on success. However, research tends to demonstrate that loans are a less effectiveform of assistance than bursaries, which are non-refundable. (FCBEM, 2009, p. 78)

Therefore, we can conclude that relying on a high debt system tends to stratifyeducation, by discriminating against students from more disadvantaged families or who

have an unfavourable attitude towards postsecondary education.3.4.2. Avoiding indebtedness by paid work

First, remember that paid work time has increased steadily since 1976, as shown in arecent FCBEM study:Table 3-3: Evolution of the rate of employment for Canadian students enrolled in full time studies between 1976and 2008, September to April

Source: Mote et Schwartz, 2009, p. 3

The authors give the hypothesis that the major increase of tuition fees in Canada isprobably related to this increase in the frequency of paid work. We may operate asimilar reasoning with student indebtedness, and scientific literature tends to say we areright.

First, we mentioned earlier (section 1.3.3) that certain students, especially those withrelatively low family capital, fear student indebtedness and tend to limit it. Variousstrategies may be implemented. Later on, we will look at the characteristics of universitystudents in various regards. When we analyze the sources of student financing,

however, we are led to believe that they are limited (see FEUQ, 2010b) :Ø Public assistance (SFA);

Ø Paid work;

Ø Family contributions;

Ø Excellence bursaries;

Ø Private debt.




The student who wishes to avoid going into debt has little recourse, unless he increaseshis number of paid work hours. The phenomenon may be observed in practical terms.

Pennel and West (2005 : p. 133 in FEUQ, 2007) highlighted the existence of a link between indebtedness and paid work: students work to avoid going into debt. This paidwork tends to have two impacts: one on academic success, similar to the one observed in

Canada by Motte and Schwartz (2005), the other on the duration of studies.3.4.3. Often deep psychological impacts

Student indebtedness has negative effects on psychological health. Leonard (1995)studied the behaviours of Sociology students at Queen’s University in Belfast. We learnthat 25% of students lived with anxiety caused by indebtedness which created negativestress during education, lowering academic performance.

This anxiety tends to increase based on debt. Merani et al., (2010) also studied the notionof financial stress. Quebec medical students, who have a median debt three times lower,had financial stress that was 0.43 times that of their counterparts in other provinces in2007. This proportion was 0.60 in 2011, although the relationship between Quebec

median debt and median debt outside Quebec was similar, but the median debt outsideQuebec was much lower ($50,000 compared to $90,000 in 2007).

Psychological impacts are varied (Scott). However, several observed an increase in thelikelihood of depression for highly indebted graduates, and an increase in the likelihoodof depression when confronted with a high level of financial difficulties during thecourse of a student’s education (Andrews et Wilding, 2004);

Effective financial assistance, which minimizes recourse to loans, improves the qualityof education in another way: it allows for a better commitment to education both inacademic and social dimensions (Hossler, 2008 in FCBEM, 2009). An increase in studentcommitment tends to improve academic success.

3.4.4. Abandoning graduate studies

Pursuing graduate studies is a crucial issue. It would seem that students who pursue aMaster’s are less indebted than those who join the labour force directly – an averagedifference of $3,200 (PRA inc., p. 17). Therefore, there seems to be a relationship.

Millett (2003) studied the impact of debt acquired during undergraduate studies onadmission to a graduate program (Master’s or Doctorate) in 1993/1994. The results areeloquent. Graduates without debt applied to a graduate studies program at a rate of 58.7% compared to 46.1% for the most indebted ($15,000 and more). Those with debt between $100 and $14,999 applied at a proportion from 46.6% to 50.6%. Statisticalanalyses conducted confirm the effect: students with a debt between $5,000 and $10,000had 1.6 less of a chance of applying to graduate studies: the ratio is 1.4 times for debts between $10,000 and $14,999. The interest of this study, beyond its unequivocal results,is that it refutes several preceding studies with contradictory results with a much widersample as well as robust statistical methods.

3.5. After university

Student debts also had an impact when the student graduates. Repayment and thedefault rate are a highly studied dimension, and common debts have a major impact on




ex-students’ finances, who must devote a major portion of their revenues to pay themoff.

3.5.1. Impacts on the government and ex-students’: repayment of student debts

Constantine Kapsalis studied the factors influencing the repayment of student loans

(Kapsalis, 2006). Although 24% of Bachelor’s students who applied to the CanadianStudent Grants Program (CSGP) had trouble repaying their debt. Personal revenueappeared to be the main factor for defaults of payment. The researcher concluded that,in fact, two factors influenced default.

First, future income is directly correlated with the rate of default: the higher the revenueis, the lower the rate of default. She stated that every $1,000s of income decreased therate of default by 1.2% (Kapsalis, 2006, p. 10).

Second, high debts cause a considerable jump in defaults of payment. Whereas thedefault remains somewhat stable for debts between $0 and $20,000, the rate of defaultincreased by a spectacular 20 points for debts owed to the CSGP of $20,000 and more.

However, it is important to note the limits of the research: first, its perimeter of studentindebtedness remained very restricted, essentially limited to the federal student grantsprogram (CSGP). Therefore, Quebec is not included, just like provincial student loanprograms. We also note that, in fact, private loans are excluded. The data are also veryold, with the most recent dating from 1997 for consolidations made in 1994-1995.

Therefore, the more a debt is high, the more the program costs will also be high. Weestimated that a student loan awarded in 2009 cost about 17 cents per dollar loaned bythe provincial government in terms of administrative fees, interest fees and loans thatwere simply lost22. In return, civil servants from Human Resources and SkillsDevelopment Canada estimated the same management cost at 30 to 40% of the loanvalue (FCBEM, 2009, p.168). Hence, the more the size f the student’s debt increase, themore we can expect an increase in defaults of payment on loans, which leads toconsiderable fees23 for the government, as well as considerable impacts on the newgraduate’s finances.

Other studies examined defaults of payment. Such is the case of Laure Greene Knappand Terry G. Seaks, who studied the situation in the United States (Greene Knapp etSeaks, 1992). They determined four significant variables in the study of loan defaults:family situation, graduation, parental income and race.

Ø The family situation had an impact. A united family decreased the default rate by 2.7%. Family income has a significant, but low impact: each $10,000 of income decreased the rate of default by 2%. Thus, students fromdisadvantaged environments are empirically in a more difficult financial

situation after their education, which may be explained in several ways. TheAmerican university system remains largely unequal and it is not easy tomake comparisons with the situation in Quebec. However, we can expect

22 FEUQ’s calculations confirmed by SFA civil servants.23 See section 2.2.3 for various repayment mechanisms in Quebec




similar behaviours in Quebec: parents may act as financial support for a newgraduate starting their career.

Ø Receiving a diploma improves the default rate by 10%. Dropouts obviously donot have access to employment so doors are opened by university diplomas.

Ø The fact of being or not being African American negatively impacts the rate of default by 10%. African Americans have particularly serious economicsituations.

This being said, the authors reject the idea that institutions of higher education causesituations of default that are worse than others. Rather, they prefer to note theimportance of student characteristics.

Wilms, Moore and Bolus highlight that in California, personal characteristics likedropping out, ethnicity, citizenship status or family income tend to influence the rate of default.

Flint (1997) presents a different interpretation in which the fact of being older, male or black all tend to increase the rate of default, along with available income. Other

characteristics, he says, do not have an impact. Hence, he suggests exploring borrowers’psychological motivations in a default of payment situation. It is also important to notethat this study concludes that loan payment is first and foremost a question of money.However, the amount of debt does not seem, to have an impact on the existence, or lack thereof, of a default of payment in this case.

Other studies are more adapted to the Canadian situation. Questions from the NationalGraduates Survey (NGS) evaluate if students had had difficulties repaying their studentloans three years after graduating. At the university level, 12% of Bachelor’s graduateshad less debt (less than $10,000), 22% of respondents with an average debt ($10,000 to$24,999) and 43% of respondents with high debt ($25,000 or more) had difficultyrepaying (FCBEM, 2009, p. 219), contradicting the previous results.

We can draw a general conclusion of the analysis of literature on defaults of payment.Although elements like adequate financial information or the improvement of certainadministrative procedures generally seem interesting to public decision makers (see,among others, the Committee of experts on the ways of repaying student debt, 1997),the question of the default rate is mainly based on the graduate’s income and theamount of the debt. It is, therefore, upon final analysis, a question of money.

Default of payment, however, is an extreme situation. Evaluating the impacts of studentdebt requires going further, by studying the finances of new graduates.

3.5.2. Impacts on new graduates’ finances

May Luong, in a recent article published by Statistics Canada, explores some of theimpacts of student debt on new Canadian graduates (Luong, 2010). The presence of astudent debt has several impacts, most of them negative; we do not see impacts onincome, which is the only variable not influenced. First, the savings rate is greatlyaffected: 47% of non-borrowers had a savings compared to 39% of borrowers. Propertyis also negatively affected, with the likelihood of owning a home being 53% compared to60% for non-borrowers.




The most probing impact is on the wealth of student borrowers and non-borrowers. Theamount of total debt remains relatively stable between borrowers and non-borrowers.However, the nature of the debt varies, which implies that the average asset of non- borrowers [$106,300] is clearly much higher than that of borrowers [$60,700].

What can we infer from these results? First, a considerable impact on economic growth.

If total household debt remains stable, the more a student debt increases in frequencyand in size, the ability to borrow decreases. There is also a major iniquity inpostsecondary education results, which does not translate in as direct of a manner as wewould believe. The social characteristics of borrowers and non-borrowers, and first andforemost, their social origin, will prove to be very different. Student debt harshly affectssocial mobility in postsecondary studies, by greatly reducing the strictly economicprofitability of a specific category of students: those who need a student loan to attenduniversity. The more student indebtedness increases [whether it be by loan capincreases or a decrease in the level of assistance, which forces students to turn to privateloans], the more we create two categories of students: the more privileged one and theother that repays its student debts.

It is also important to note that the history of credit almost always plays a role inawarding loans. A student confronted with payment difficulties will have his creditaffected, lowering his possibility of obtaining a loan for other purchases.

3.6. Modelling of the impacts of student indebtedness

After examining the impacts of student indebtedness on various facets of student, it isappropriate to compile the major impacts, which we will do in Error! Reference sourcenot found.. Remember the main determining factors of debt: in order they are financialsituation, financial management abilities and economic socialization. Students dependon them more and more, despite their often-lacking financial training.

Tableau 3-4 : Impacts of student indebtedness




Tableau 3-4 : Impacts of student indebtedness

Before During After

Students with a loan have 1.5 to1.8 more likelihood of starting

university late [Canada];Financial reasons are the mainreason for not attendinguniversity [Canada]

Aversion to debt: variable basedon social class.

Future students are sensitive toprices as shown

The family [financial resourcesand willingness to help thestudent] play a major role

Guide the choice of field orregion of study based on the costand not the talent

Kim: +$1,000 in annual loancauses the dropout rate among

the most disadvantaged toincrease by 1.6%, with a greaterimpact among culturalminorities. [United States]

Loans are less effective than bursaries in terms of access

Students avoid debt through paidwork, which causes them to dropout.

Increase in stress andpsychological distress based onthe amount of debt.

Abandoning graduate studies

The default of payment is basedon income on the labour market

High debts increase the rate of default.

The more the rate increases, themore the costs of managing loanprograms increases.

In Canada: 12% to 43% of Bachelor’s graduates have hadpayment problems based on thesize of their debt.

Student debt significantlyreduces graduates’ financialflexibility.

Some theoretical conclusions must be made. First the student, like any human being, is notpurely rational. Although a rational actor, his decision to attend university or not isinfluenced by numerous factors including family environment, available financialsupport and aversion to indebtedness. The cost-benefit calculation for postsecondaryeducation generally favours participation, but the benefits are difficult to estimate. Thecognitive processes during university education play a role, and indebtedness may actas a catalyst in a decision to drop out of university.

We also note that new graduates are confronted with multiple challenges. Beyond

joining the labour force, those who are in debt must repay their loans with aconsiderable possibility of defaulting on the payment and having a less profitablediploma than expected.

Finally, student indebtedness, particularly public debt, raises an important question of social fairness. Is a social policy that puts the most disadvantaged students into debt andthe most at risk first fair? We will re-examine this in the conclusion.




4. Methodology

This section aims to present the methodological parameters of the quantitative studypresented in sections 5 to 8. For more detailed statistical analysis, the reader is invited toconsult appendix II, which includes the gross tables.

4.1. Statistical methods

All the data have been analyzed in the following manner:

Ø Descriptive statistics

ü Presentation of raw data. The continuous variables were converted intoordinal variables for the presentation of data.

Ø Analysis of the indebtedness rate

ü Presentation of the raw data by crossed table. The continuous variables wereconverted into ordinal variables, and certain ordinal variables weremanipulated for the presentation of the tables only (groups of valuesdistanced from the median).

ü Analysis of the statistical correlation. In the case of dichotomous variables, wehave used a phi correlation (Φ). We should note that the coefficient of thiscorrelation is a bit different from the others: its highest limit is determined bythe distribution between the two possible positions of the dichotomousvariable.

ü In the case of continuous variables, we have used the Pearson correlation(noted rpb), which efficiently approximates the point bi-serial correlations,which are the most appropriate, but the SPSS do not calculate directly. In onecase, we have used the τ-c of Kendall.

Ø Analysis of the moment of the debt

ü Presentation of the raw data by comparison of averages. The continuousvariables have been converted into variable ordinals for the presentation of tables.

ü Analysis of the statistical correlation. We have used the Pearson correlation(r), which can be raised to the square to illustrate the amount of the varianceexplained by the correlation.

ü However, the tables adequately present the fact that the relations are notalways linear, or distributions that are not necessarily normal. In such cases,

we will note it in the analysis. Furthermore, we have used the rho of Spearman (ρ), which is non-parametric. His interpretation differs somewhatfrom the Pearson correlation, but it consists of the same type of test.

For the purposes of the analysis of correlation, we have retained three levels of significance, namely p<,001 (***), p<,01 (**) and p<,05 (*). The most interesting data arepresented in the following sections. Unless there is a contrary indication, all thesignificance tests are bi-directional tests. The correlation rates include two significantdata: the sign, which indicates the sense of the relation, and the value, which indicates




the force of the relation. The more we approach 1 or -1, the stronger the relation.However, it is difficult to establish a universal rule for the force of correlations. As youwill see, most of the effects are significant, but relatively weak. It is important to notethat a significant statistical effect is not necessarily interesting: it only essentially signalsthe fact that the difference is not due chance. This rule is particularly true for large-sizesamplings: this explains why we find more statistically significant correlations forindebtedness due to SFA for indebtedness than for indebtedness to the family. x

4.2. Sampling and representativeness

AS the methodological report of the survey mentioned, the data gathered trace arepresentative portrait of the Quebec student population. However, it presents a certainnumber of general and specific limitations that we have to take into account. We firsthave to note that certain educational institutions refused to participate in the survey:this consists of McGill University and HEC, for the population pool that concerns us.However, the final data remain closed to the observed reality. There is also a specificlimit to the use of data of the survey. In fact, the questionnaire was distributed tostudents during studies. Thus, the data does not entirely account for the real situation of

students, but rather their projection of their financial situation when they leave withtheir diploma in hand. There may thus be a certain bias in the data. The data on totalindebtedness as well as indebtedness to SFA are both reliable, corresponding to officialdata. We can thus proceed with confidence.

We worked on a subsample: we only analyzed data for students enrolled full-time(n=9006). When we work on the entire sample, the margin of error is 1%, 19 times out of 20. Of course, the more we descend into subsamples, the higher the margin of error becomes. In the case of very small samples, warnings are noted. The high rate of response allows us to affirm that the study is representative of the Quebec universitypopulation.

We also have to note that the methodology calculation differs from the one used in thesurvey. In fact, we are using the SPSS program and there exist slight differences in theweighting of the data, which can explain some marginal differences in the average andmedian values. Other differences can emerge from missing values, which can vary theaverage amounts of the debt in the crossed tables according to the control variables.Other differences can emerge from the missing values, which can make vary the averageamounts of debts in the crossed tables according to the control variables.

4.3. Treatment of the data

All the data were treated according to three methods. First, we examined the variationof the rate of indebtedness. The variables were derived from the projected level of indebtedness at the end of undergraduate studies: this is a dichotomous variable. The

rate of indebtedness is defined as the percentage of students that expect to leave theirstudies with a debt from one of three identified sources, or simply that expect to leavewith at least one debt for the total rate of indebtedness.

Subsequently, we have analyzed the variation of the amount. To be counted in thecalculations, a student must present at least one dollar of projected debt at the end of studies: this method of calculation allows us to determine the variation of the amount of debt for the population that is already indebted.




Finally, at the end of each section, we present a table summarizing the statistical tests.Table 4-1 presents an example of a table.

Table 4-1: Example of table summarizing statistical tests

SFA Private Family/friends Total

Duration

Rate;r pb ,05*** ,06*** ,01 ,04***Amount;r ,04** ,09*** ,07** ,06***

Amount;ρ ,07*** ,12*** ,01 ,10***

The first column includes the variables studies in bold: here, it is the duration of studies.Next, the line Rate; rpb indicates that the line presents the variation in the rate of indebtedness by using the point bi-serial correlation. Amount; r indicates that we areanalyzing the variation of the amount of indebtedness. Finally, Amount; ρ indicates thatwe are analyzing the variation of the amount according to ρ of Spearman.

The other columns present the coefficients of the correlation according to three forms of student indebtedness retained, and total indebtedness.

Various tables were simplified to facilitate comprehension. Statistical appendices inExcel format are available from the FEUQ for the reader who wishes to deepen hisunderstanding.




5. Student indebtedness: main characteristics

What are the main characteristics of student indebtedness in Quebec? To answer thisquestion, we will exploit the data of the survey on the living conditions of undergraduate students. As mentioned in the introduction, we will only focus on full-time undergraduate students. We will mainly evaluate the percentage of students thatindebt themselves as well as the volume of this debt.

5.1. Characteristics of the rate of indebtedness

A high percentage of students must indebt themselves to successfully complete theirstudy project. Error! Reference source not found. illustrates the rate of indebtedness based on the source. As we can easily see, it is the Quebec student financial assistanceprogram that is the most frequent source of indebtedness, with 47%. However, 35% of students expect to leave their studies indebted to a financial institution, and 17% expectthey will owe money to their family or their friends. In total, 65% of students expect toleave their studies with at least one debt.

Figure 5-1: Rate of indebtedness according to sourceFigure 5-1: Rate of indebtedness according to source

5.1.1. The number of sources of debts

A debt often comes alone. 36% of students only present one source of debts. However,22% cumulate two, while 7% cumulate three distinct sources of indebtedness that wehave identified.




Figure 5-2: Number of sources of debts

The fact of cumulating various debts from several different sources influences in animportant manner the amount of the debt. On the one hand, the total debt grows withthe number of debts (r=0,368 to p <0,001), which is logical and normal. The differentforms of debt behave in a more or less erratic manner. The debt to SFA grows with thenumber of debts, but its growth is weak (r=0,063 to p<0,001). The private debt remainsstable regardless the number of debts, not showing any significant statistical relation.The family debt presents a more interesting motive: its amount weakens according tothe number of debts (r=-0,172 to p<0,001), indicating that it consists of a debt of lastrecourse, which does not obey the normal financial rules. Once again, we can observethat indebtedness leads to indebtedness.

Figure 5-3: Variation of the level of debt according to the number of sources of debts

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5.1.2. Characteristics of the volume of debt

The amounts of debts contracted are often quite high, as is shown by Error! Referencesource not found..

Table 5-1: Characteristics of debts by sourceTable 5-1: Characteristics of debts by source


Average 12 785 $ 8 043 $ 5 234 $ 13 967 $

1st

quartile 6 000 $ 1 500 $ 1 000 $ 5 000 $

Median 10 000 $ 5 000 $ 3 000 $ 11 000 $

3rd quartile 18 000 $ 10 001 $ 6 000 $ 20 000 $

Obviously, it is in student financial assistance that we find the highest level of debts,with an average debt of $12,785 upon completion of studies. This average debt is higherthan the median debt, at $10,000, indicating that a distribution with a low concentrationof relatively small debts. This is explained by the functioning of the loans and bursariesprogram, which grants loans based on the maximum loan limit. Furthermore, a studentthat benefits from loans and bursaries will generally benefit from this throughout hisstudies path, within the limits imposed by the program. We must also note the existenceof a relatively high indebtedness limit, which limits the loan maximum. A detailedstudy of the sources of indebtedness turns out to be more troubling, by revealing theexistence of an important minority of strongly indebted students.

Error! Reference source not found. illustrates the distribution of debt amounts due toSFA. 47% of the recipients will owe between $5,000 to $15,000 to the program at the endof their undergraduate degree. It is nonetheless worrying to see that 29% of students,nearly one-third, expect to owe more than $15,000 at the end of their undergraduatestudies, and 10%, more than $25,000.

Figure 5-4: Distribution of the amounts of debt due to the SFAFigure 5-4: Distribution of the amounts of debt due to the SFA

The second source of debt in importance comes from financial institutions, with anaverage debt of $8,043 for the 35% of students that indebt themselves from this source.

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We notice, however, as in the case of family debts, that the first quartile, at $1,500,reveals a high level of small and relatively modest loans.

Error! Reference source not found. explores the distribution of debt amounts comingfrom financial institutions. 55% of these are less than $5,000, as revealed by the median.However, this important concentration of debt amount must not hide its corollary logic:

a significant portion of students contract very high debts in the private sector. A debt of $15,000 and more is the lot of 16% of students that have a debt of this type.

We must note that that a debt due to a private institution is often less advantageous thanWe must note that that a debt due to a private institution is often less advantageous thana public loan, due to the less advantageous repayment conditions, a higher interest rateand no exoneration of the payment of interest during studies.

Figure 5-5: Distribution of debt amounts from financial institutions

The last source of debts in importance is family debt, of which the average debt issituated at $5,234 and the median debt at $3,000. Error! Reference source not found. allows us to observe that family debts are generally of a lesser amount than the othertwo sources. Once again, we find an important portion of students that have these typesof loans and relatively high debts, of the order of $5,000 and more.

Figure 5-6: Distribution of amounts of family debts

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Figure 5-6: Distribution of amounts of family debts

The amount of the total debt, at $13,967, is quite high. Furthermore, the 3 rd quartile, at$20, reveals the presence of an important percentage of students that cumulate quitevoluminous debts.

Figure 5-7: Distribution of total amounts of debt

5.2. The impact of already contracted indebtedness

We could believe that the forms of indebtedness replace each other: in this case, thepresence of a form of indebtedness would reduce the frequency of the other forms of

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indebtedness. Now, it is rather the inverse relation we can observe: in all forms of debt,there is a statistically significant correlation with the probability of indebtedness and theaverage amounts of debts. The only exception to the rule is familial indebtedness, whoselevel of debt diminishes as the number of sources of debt increases.

We will study in sequence the three forms of indebtedness that we have retained, based

on the three relations: the evolution of the rate of indebtedness, the variation of the rateof indebtedness according to the amount of debt accumulated and the relations betweenthe amounts of debt. The first series of indicator allows us to know if having a debt to agiven source has an influence on the fact of subscribing to another source of debts, thesecond if the fact of being indebted to a first and second source has an influence on thelevel of debt of the first source, and the third if the increase in the amounts of debts forsomeone who cumulates the two selected sources influence each other.

5.2.1. Relations between the rates of indebtedness

The fact of being enrolled in SFA tends to increase the probability of leaving studieswith a private debt: we can explain 9% of the variance of the rates of indebtedness with

this relation (Φ=0,299 for p<0,001). A quarter of students have both a debt with SFA anda private debt, while 22% have a debt with SFA, but no private debt. Only 13% have aprivate debt without a debt at SFA. We must note that more than half the respondentswith a debt at SFA also expected to leave their studies with a private debt. Nearly two-thirds of students that have a private debt also had a debt with SFA.

Table 5-2: Relation between the rate of indebtedness to SFA and the rate of private indebtedness

Absenceofa

privatedebt

Presenceof

aprivate

debt

Total

AbsenceofadebtatSFA

%line 76,50% 23,50% 100,00%

%column 65,40% 34,50% 54,00%

%oftotal 41,30% 12,70% 54,00%

PresenceofadebtatSFA

%line 47,60% 52,40% 100,00%

%column 34,60% 65,50% 46,00%

%oftotal 21,90% 24,10% 46,00%

Total

%line 63,20% 36,80% 100,00%

%column 100,00% 100,00% 100,00%

%oftotal 63,20% 36,80% 100,00%

The relation between indebtedness at SFA and family debt is similar, but not as strong:it explains 1% of the variance (Φ=0,112 à p < 0,001). 11% of respondents cumulate afamily debt and a debt at SFA: this nonetheless consists of more than half therespondents declaring a family debt, and nearly a quarter of students with a debt fromSFA.




Table 5-3: Relation between the rate of indebtedness at SFA and the rate of family indebtedness

Absenceofa

familydebt

Presenceof

afamily

debt

Total

AbsenceofanSFAdebt

%line 85,40% 14,60% 100,00%%column 57,60% 43,30% 54,90%

%oftotal 46,90% 8,00% 54,90%

PresenceofadebtatSFA

%line 76,60% 23,40% 100,00%

%column 42,40% 56,70% 45,10%

%oftotal 34,50% 10,50% 45,10%

Total

%line 81,40% 18,60% 100,00%

%column 100,00% 100,00% 100,00%

%oftotal 81,40% 18,60% 100,00%

We also find a relation of average strength between private indebtedness and familyindebtedness: this explains 5% of the variance. Only 11% of respondents cumulated aprivate debt with a family debt: however, 58% of students with a family debt also had aprivate debt.

Table 5-4: Relation between the rate of private indebtedness and the rate of family indebtedness

Absenceofa

familydebt

Presenceof

afamily

debt

Total

Absenceofaprivatedebt

%line 87,90% 12,10% 100,00%%column 69,50% 41,90% 64,30%

%oftotal 56,50% 7,80% 64,30%

Presenceofprivatedebt

%line 69,70% 30,30% 100,00%

%column 30,50% 58,10% 35,70%

%oftotal 24,80% 10,80% 35,70%

Total

%line 81,40% 18,60% 100,00%

%column 100,00% 100,00% 100,00%

%oftotal 81,40% 18,60% 100,00%

As we will se further on, the same type of motive repeats itself on the variation of theindebtedness rate and on the amounts of the debt.

5.2.2. Student financial assistance

The fact of contracting a debt from student financial assistance should normally, procurea sufficient standard of life to be able to prevent having to indebt oneself more in thecourse of studies. It is at least one of the objectives of the program.




The amount of the debt due to SFA has a certain influence on the debts contracted fromother sources, as is shown by Error! Reference source not found.. The relation isstronger in the case of private loans: the amount of the debt due to SFA explains 8.9% of the variance in the private rate of indebtedness. The relation with the presence of afamily debt is lower.

Table 5-5: Relation between the amount of the SFA debt and the presence of other sources of debtTable 5-5: Relation between the amount of the SFA debt and the presence of other sources of debt

Private Family/friends

1,00-5000,00 49,90% 27,40%

5001,0010000,00 49,50% 18,00%

10001,0015000,00 50,80% 22,70%

15001,0020000,00 56,40% 23,70%

20001,0025000,00 61,60% 23,30%

25001,0030000,00 55,80% 25,10%

30001,0035000,00 63,00% 38,50%

35001,0040000,00 59,60% 42,60%

40001,0045000,00 80,00% 40,00%

45001,00+ 76,00% 19,00%

Total 52,50% 23,40%

The relation also exists in relation to the average amount of debt, but is lower. Theamounts of debt to student financial assistance explains 2% of the variance in theamounts of private and family loans. We must nevertheless note that the averageamounts of private loans reach a maximum limit at about $30,000 to $35,000 of debt dueto SFA, suggesting a more parabolic relation than linear. We must also note that thepopulation remains very small at such levels of debt.We can issue two hypotheses regarding this relation. On the one hand, it is largelyrecognized that the assistance granted to the loans and bursaries program is insufficient,which could push certain beneficiaries of the program to turn toward private loans. Onthe other hand, some students stop being eligible for the program because they haveexceeded the time limit allowed for the program. Private loans can then be aninteresting exit door for certain students.

We also have to note that the size of the debt due to student financial assistance is themain explanatory factor of the size of the total debt: it explains 64% of the variance.




Table 5-6: Variation of the average amounts of debt according to the amount of debts due to student financialassistance

Private Family/friends Total

1,00-5000,00 6002$ 3439$ 5972$

5001,0010000,00 8275$ 3852$ 12427$

10001,0015000,00 8155$ 4006$ 17431$

15001,0020000,00 9278$ 4497$ 23557$

20001,0025000,00 10976$ 5479$ 29068$

25001,0030000,00 10617$ 6116$ 33351$

30001,0035000,00 12513$ 6396$ 38325$

35001,0040000,00 10520$ 4606$ 41506$

40001,0045000,00 9090$ 7189$ 45798$

45001,00+ 8886$ 9139$ 49606$

Total 8355$ 4231$ 16353$

We can conclude that students begin to indebt themselves during their studies do notstop in the course of the route. Two factors can explain this. On the one hand, there is afinancial need that is not filled. An alternative explanation rests on the notion of aversion to risk: a student that takes out a loan is partially desensitized to the negativeimpacts of indebtedness, permitting him to take out higher loans. We will see further onthat the first explanation is often more convincing.

5.2.3. Loans from financial institutions

The second source of loans in importance, loans coming from financial institutions, are

strongly related to other forms of indebtedness. The presence of a loan from the privatesource predicts 9% of variance in the amounts of the debt of the SFA and 5% of thevariance of the family loan, two effects of average force (R=0,299 and r=0,224).

Table 5-7: Variation of the indebtedness rate by source based according to the size of the private loan

SFA Family/friends

1,00-5000,00 62,80% 31,30%

5001,00-10000,00 67,30% 28,00%

10001,00-15000,00 73,70% 29,00%

15001,00-20000,00 64,80% 29,70%

20001,00-25000,00 67,00% 34,30%

25001,00-30000,00 61,40% 25,00%

30001,00+ 75,40% 33,30%

65,50% 30,30%

Here again, the amounts of private loans are positively correlated with the amounts of other sources of loans and respectively explain 2%, 5% and 43% of the variance of loansof SFA, family loans and the total debt.




Table 5-8: Variation of the average amounts of debts per source according to the size of the private loan

SFA Family/Friends Total

1,00-5000,00 11913$ 3537$ 9920$

5001,00-10000,00 14580$ 4690$ 17441$

10001,00-15000,00 16176$ 4507$ 24138$

15001,00-20000,00 15692$ 5154$ 27464$

20001,00-25000,00 14123$ 4400$ 31536$

25001,00-30000,00 14880$ 7708$ 35996$

30001,00+ 16109$ 11425$ 42092$

Total 13482$ 4382$ 15706$

5.2.4. Family loans

The family loans are those that present the greatest stability relative to other sources of debts. Their presence predicts 1% of the variance of debt amounts of the SFA and 5% of private loans.

Table 5-9: Variation of the rate of indebtedness by source based on the size of the family loan

SFA Private

1,00-2500,00 64,90% 67,00%

2501,00-5000,00 52,80% 50,00%

5001,00-7500,00 59,50% 62,70%

7501,00-10000,00 47,60% 48,30%

10001,00-12500,00 50,00% 45,50%

12501,00-15000,00 45,30% 56,00%

15001,00+ 37,20% 42,70%

Total 57,30% 58,50%

Similar relations (2% and 5%) exist in relation to the amounts of family loans. Fact tonote: the size of the family loan only explains 17% of the variance of the total debt.

Table 5-10: Variation of the average amount of debts by source based on the size of the family loan

SFA Private Total

1,00-2500,00 11223$ 5986$ 11336$

2501,00–5000,00 14602$ 4137$ 14278$

5001,00-7500,00 18653$ 10276$ 17830$

7501,0010000,00 16517$ 8714$ 18205$

10001,0012500,00 13970$ 6582$ 18271$

12501,0015000,00 15382$ 14408$ 23135$

15001,00+ 15637$ 13963$ 30739$

Total 13186$ 7387$ 14522$

This is all explained quite simply: the amounts of family loans are generally much lowerthan the two other forms of loans for studies, which makes them often fill a lesser need.The low variation of the presence of a family loan is based on the size of the SFA loan.




5.3. A spiral of indebtedness

The data presented earlier suggests the existence of a sort of spiral of indebtedness. Onthe one hand, the fact of being a source is correlated positively with that of beingindebted to other sources. Thus, the SFA program shows again one of its deficiencies:the fact of being indebted to SFA predicts in many cases a loan to at least another source

of indebtedness. The number of sources of indebtedness has a striking influence on totalindebtedness, but negatively influences family debt. In the other two cases, it is whenwe attain the useful limit of the program, where we tend to turn to another form of indebtedness. However, the analysis of the amounts in relation in relation with the ratesdenotes an interesting motive: the amount of family indebtedness is negativelycorrelated with all other forms of indebtedness. Thus, the student with very high debtswill have a little less of a tendency to borrow from other sources. We can believe thatstudents that borrow a lot from their family are no longer eligible for SFA and privateloans.

Table 5-11: Summary of statistical tests on indebtedness


Numberofsourcesof

debt

Amount;r ,06*** ,00 -,17*** ,37***

SFA

Rate–rate;Φ 1 ,30*** ,11***

Amount–rate;rb 1 ,09*** ,18

Amount–amount;r 1 ,15*** ,15*** ,80***

Private

Rate-rate;Φ ,30*** 1*** ,22***

Amount–rate;rb ,39* 1*** -,05***

Amount–amount;r ,15*** 1*** ,23*** ,65***Family/friends

Rate–rate;Φ ,11*** ,22*** 1***

Amount–rate;rb -,13*** -,12*** 1***

Amount–amount;r ,15*** ,22*** 1*** ,41***

Furthermore, the amounts of debts are all positively correlated between themselves,thus indicating an increase of the amount of a debt tends to come with debts from othermore voluminous sources. The size of a debt also influences the propensity of a studentto contract debt from other sources. It thus does not seem abusive to talk about a spiralof indebtedness. Is it a question of financial vulnerability or a reduction of the aversionto risk? This is what we will see in the following sections.




6. The impact of student characteristics

In this section we will study the impact of two broad categories of studentcharacteristics. We will begin with the socioeconomic characteristics: gender, age, familyincome, place of residence, the study area, changing study domains, and the presence of dependent children and status of first-generation students. Subsequently, we will look at school characteristics, such as debt already accumulated, academic progress, theduration of the degree, prolonging previous studies and the field of study itself.

6.1. The impact of socioeconomic characteristics

For the purposes of this study we retained a select number of socioeconomiccharacteristics for analysis: age, family income, place of residence, the area of study,changing study domains, the presence of a dependent child student and status of firstgeneration students.

6.1.1. Gender

The student population is predominantly female at 58%. As shown in Figure 1-1, genderhas no influence on the debt ratio, regardless of the source. Figure 1-1: Change in debt ratio by source by gender

Gender does however, have an influence on the increase of debt: being a malesignificantly but weakly increases in terms of total and private debt acquired (rpb =-,rpb =- 06 and, at 08 p <, 001). This is probably due in part to the preferred fields of study

of men, such as engineering, where studies are longer and therefore see higher debtrates (see below section 1.2.5). Other influencing factors, could however, be taken intoaccount.

Figure 6-1 : Change in average amounts of debt by source by gender

!"#$ %&'()$ "*+',,-.*+'/$ 012*,$

31++-$ 45657$ 89657$ :;6<7$ 946<7$

"-++-$ 456=7$ 8>6?7$ :;687$ 9?6:7$

<6<7$

:<6<7$

=<6<7$

8<6<7$

4<6<7$

?<6<7$

9<6<7$

5<6<7$




Overall, gender has little influence on the level of debt, but studies show that maleshave a slightly higher amount of debt than females. For a more detailed study of thedynamics between men and women in higher education, please consult (FEUQ, 2011c),where we see, among other things, that women still face many barriers when pursuinghigher education.

6.1.2. Age

The study population is relatively young, as shown in Table 1-1. However, it isnoteworthy to remember that 22% of students are over the age of 25, and thuscorrespond to a more atypical profile: non-traditional students (FEUQ, 2010).

Table 6-1: Description of students’ age Age

Average 231st quarter 212nd quarter 223rd quarter 24

Figure 6-2 : Table 6-2: Description of students’ age

!"#$ %&'()$ "*+',,-.*+'/$ 012*,$

31++-$ 45$467$8$$ 9$:77$8$$ ;$<9<$8$$ 4<$=99$8$$

"-++-$ 46$;59$8$$ =$<4=$8$$ ;$>74$8$$ 45$599$8$$

>$8$$

6$>>>$8$$

<$>>>$8$$

7$>>>$8$$

9$>>>$8$$

4>$>>>$8$$

46$>>>$8$$

4<$>>>$8$$

47$>>>$8$$




Age has a significant influence on the amount of accumulated debt at the time of graduation. There is a wide range of forms of debt as well as significant statisticalvariations in their level of debt with medium effects on the debt to the FAE, private debtand total debt, as well as a weak effect on family debt. While 48% of students 19 andyounger expect to leave school in debt, 86% of students 26 years and over are in thesame situation. Consequently, it appears that non-traditional students have to resort tohigher proportions of debt to finance their education.

Figure 6-3: Change in debt ratio by source according to age

Similar trends in the amount of debt incurred are not reflected from a statistical point of view. Significant correlations can be found, but they are weaker (for example, familyloans have no significant correlation and remain fairly stable), however, changingaverages allow us to observe significant changes (see Figure 1.5). Age alone onlyexplains 5% of the variance in total student debt.

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With the exception of family debts which are relatively stable, we also note a continuedgrowth in the average amount of student debt accumulated by the time of graduation,starting at the age of 21.

Figure 6-4: Change in average amounts of debt by source according to age

This trend can be partly explained through a better understanding of students’ personalfinancial situation: the more a student is nearing the end of their studies, the better thelikelihood that they will know the precise amount of debt that they will haveaccumulated by the time they graduate. However, it seems that this explanation isinsufficient: literature reviews indicate that age and debt were closely associated.

One factor that is embedded in the actual financial situation can be added to thisquestion: older students are probably part of a different debt profile, as they are lessreliant on significant parental support, a factor which is important in reducing studentdebt (see below). As we shall see, the duration of studies has a significant on studentdebt: which is probably an important explanatory factor. We must also remember thatolder students are more frequently non-residents, a feature that is highly correlated withstudent debt in all its forms as student autonomy is generally combined with the use of a lack of resources to finance the furthering of their education.

6.1.3. Family Income

One might think that private student debt as well as family debt would be morecommon in certain income brackets, especially among those in the upper middle classes.These are families where family capital is often higher and the propensity to borrow foreducation would be increased accordingly, given a better understanding of theeconomic benefits of university education. However, this is not what the data shows.Let’s first bear in mind the characteristics of the family income of students, presented inTable 1-2. We divided the distribution into quartiles to facilitate the statistical analysis of the data, which gives a good overview of the variations that occur depending on thegross family income.

!"!!!!#!!

!$!%%%!!#!!

!&%!%%%!!#!!

!&$!%%%!!#!!

!'%!%%%!!#!!

!'$!%%%!!#!!

&(!)*+!,-!

./0*+!

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1&!)*+!,-!567+!

89:! ;<0=>! 9).066,?).0+! @/-)6!




Table 6-3: Description of gross family income

NetFamily

Income

Average 79128$

1stquarter 35000$

2

nd

quarter 65000$3rdquarter 112500$

Figure 1-6 shows the importance of family income in determining student debt. Wehave divided the gross family income according to income quartiles which arepresented in our distribution of family income. It shows that the rate of student debt issignificantly negatively correlated with family income, regardless of the source of theloan. The correlation is strong in terms of student financial aid (which is mainly due toprogram rules), but also for private loans, family loans and total debt (rpb =-, 16, rpb = -,10, rpb =-, 34 at p <.001).

Figure 6-5 : Change in debt ratio by source based on family income

The changes are less clear on the average amount of debt. The average debt, as is thecase for the SFA debt, is negatively correlated with gross family income (r =- 17 and r =-,18, 3% of variance explained). There is no statistically significant relationship associatedto the amount of private and family loans. There is however a slight increase in averageprivate loans: one can assume that there are less relatively small debts (typically credit

card debt). This relative stability of the amounts of debt, however, should not excuse themost striking finding, that is to say, the ratio of debt.

!"#$%&'(&)*&

***+&

,-&---+&.&/*&

***+&

0-&---+&.&

12,&***+&

123&---+&(4&

567%&

89:& 00;--<& 3=;2-<& )2;/-<& 13;*-<&

>?#@A& ,0;=-<& ,);--<& )/;2-<& 23;=-<&

9BC#66(DBC#%& 2,;=-<& 2-;--<& 1*;)-<& 12;0-<&

E"4B6& =/;--<& 02;0-<& 30;0-<& )*;)-<&

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3-;--<&

/-;--<&

0-;--<&

=-;--<&

*-;--<&

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Table 6-4: Change in average amounts of debt by source based on gross family income

What can be deduced is that student debt is first and foremost about money andfinancial need. The idea that students from wealthier backgrounds take on more debt inthe private sector seems invalid. We will indirectly see this again with the issue of parental contributions toward education, which has similar characteristics in severalrespects.

6.1.4. Place of Residence

Most students leave home during their studies, or they already left before they startedthem. More than two-thirds of students do not live with their parents, which has a

disproportionately large impact on student finances: it involves, among other things,spending significantly more (FEUQ, 2010). These expenditures also have a significantimpact on student debt. First, not living with one’s parents leads to much higher debtamounts: the relationship is statistically significant for all forms of debt, and stronger forthe student financial aid and 'total debt. Three quarters of students who do not live withtheir parents go into debt, versus 43% of those who remained at home while pursuingstudies. A student who does not reside with his parents has a probability of being indebt which is 1.7 times greater than a student who remains at home.

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0-&---+&.&

12,&***+&

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(4&567%&

89:& 1,&0-*;0)&&+&& 11&<0<;/2&&+&& 1-&)-,;0<&&+&& 1-&,/*;,<&&+&&

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Figure 6-6: Change in debt ratio by source by place of residence

The amount of debt is also higher for non-Quebec resident students. The average totaldebt is always higher, $ 15 277 for non-Quebec residents versus $ 8,780 for Quebecresidents (r =-, 23 at p <.001). We can observe significant statistical relationships here.Figure 1 8 shows these results.

Figure 6-7: Change in average amounts of debt by source based on the basis of place of residence

It is also important to remember that students from lower income backgrounds leavethe family more frequently, probably because they are more often tenants. (rpb =-, 126 atp <.001). It is not necessarily possible for the student to stay with their parents duringadulthood.

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3*4'2-$56-7$/-/$8*&-92/$ :$;<=$$>$$ =$?=@$$>$$ A$;BC$$>$$ C$<CD$$>$$

EF6*4'2-$8*/$56-7$/-/$

8*&-92/$D@$AA?$$>$$ C$?@D$$>$$ =$=D?$$>$$ D=$B<C$$>$$

$G$$$$>$$

$B$;;;$$>$$

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$D?$;;;$$>$$

$DC$;;;$$>$$




6.1.5. Area of Study

The area of study, and distance from place of residence, are two factors that may have asignificant influence on debt. To facilitate data analysis, we grouped students accordingto the region in which students reside: Montreal, Quebec, the central regions (Outaouais,Estrie and Mauricie) and remote areas (Saguenay Lac-St-Jean, Abitibi-Témiscamingue ,

Bas-St-Laurent). The majority of students reside Montreal, as illustrated in Table 6-4. Table 6-5 : Description of the area of origin of students

Proportion(%)

Montreal 60Quebec 18Central Regions 16Remote Areas 6Distance 0,2Total 100

Figure 1-9 shows the debt ratio by source and region. Other than percentages of familydebt, all debt ratios are higher outside the Greater Montreal region.

Figure 6-8: Change in debt ratio by source according to the study area

The relationship is somewhat different in respect to the average debt accumulatedduring studies. Indebtedness to the SFA remains almost stable, while private debt is

slightly higher in Quebec and in the central regions than in Montreal or in remote areas.However, there are some very interesting conclusions which can be drawn out fromthis.

!"#$ %&'()$"*+',,-.

*+'/$012*,$

3142&)*,$ 56789:$ 6;769:$ <=789:$ >?7<9:$

@A)B-C$ 5=7=9:$ 6D769:$ <>759:$ >D769:$

E)F'14/$C-42&*,-/$ D?7;9:$ 6=759:$ <=769:$ >8789:$

E)F'14/$),1'F4)-/$ ><7D9:$ 5D7D9:$ ?<7?9:$ ;>7;9:$

9799:$

<9799:$

?9799:$

69799:$

59799:$

D9799:$

>9799:$

;9799:$

89799:$

=9799:$




Table 6-6 : Average debt according to the study area

The relatively small sample size for remote areas however, requires us to use somecaution in interpreting the data. We note, however, a somewhat more difficult financialsituation for students studying in remote areas. The debt rate is significantly higher ,demanding that attention be paid to students located in these regions. The welldocumented economic situation which is often more difficult for them, may be anexplaining factor, because of a less dynamic labor market and, therefore, a lowerdiversity of sources and methods of financing university education.

6.1.6. Moving Away From Home

One-third of students must leave their home towns to complete their final educational

projects. These students, who must move, face many challenges: the financial challengeof adjusting to full autonomy, as well as integration challenge to what is truly amicrocosm of new home.However, the change in the region seems to weaken student financial situations. Thedebt rate is higher, especially in terms of student financial assistance (Φ =- 14 to p <.001).A student who is required to leave their home town is 1.2 times more likely to go intodebt during their studies. Figure 1-10 illustrates the variables: there is a statisticallysignificant relationship for all forms of debt, it is often low.

!"#$ %&'()$"*+',,-.

*+'/$012*,$

3142&)*,$ 56$777$$8$$ 9$:;;$$8$$ <$5:=$$8$$ 5=$97;$$8$$

>?)@-A$ 56$;<:$$8$$ 7$9;9$$8$$ :$7=5$$8$$ 5:$B::$$8$$

C)D'14/$A-42&*,-/$ 56$5=5$$8$$ ;$57E$$8$$ <$67;$$8$$ 5:$B76$$8$$

C)D'14/$),1'D4)-/$ 5=$<66$$8$$ 9$6<9$$8$$ E$:B:$$8$$ 5<$5B5$$8$$

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$E$BBB$$8$$

$7$BBB$$8$$

$5B$BBB$$8$$

$56$BBB$$8$$

$5:$BBB$$8$$

$5E$BBB$$8$$




Figure 6-9: Change in debt ratio by source based on moving away

In regards to the study of the amounts of debt, two forms of debt are statisticallysignificantly influenced by leaving one’s home town: private debt and debt faced byloved ones (rpb =-, 11 and rpb =-, 11 at p <010). This variation seems to explain why thetotal debt is higher (rpb =-, 07 at p <010). We can see that the average debt is $ 9,299 forthose who have private loans private and are required to leave home, versus $ 7,241 forthose in the opposite situation.

Figure 6-10: Change in average amounts of debt by source based on the change of region

!"#$ %&'()$"*+',,-.

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34*56-+-52$7-$&)6'15$ 89:;<=$ >?:@<=$ A<:B<=$ ;>:;<=$

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Students who are required to leave their home towns are therefore more vulnerableprofile. The presence of larger private loans amongst students who leave their hometowns demonstrates, once again, significant gaps in our student financial assistancesystem which inadequately covers students’ financial needs, including those who mustleave their home towns.

6.1.7. Presence of a dependant child

A student of twenty must balance school and family life. This average rises to 20.3% forstudents over the age of twenty-four (FEUQ, 2010a: 22). The FEUQ has frequentlyemphasized the precarious financial situation of students who must juggle studies, work and family (see among others: FEUQ, 2010a; FEUQ, 2010b; FEUQ, 2009a; CNCS-FEUQ,2011) and the data which we will present in relation to student debt supports this view.It is much more likely for a student with dependent children to be in debt, regardless of the source. All these changes are statistically significant. Students with dependentchildren have a loan rate 1.4 times higher than those without dependent children.

Figure 6-11 : Change in debt ratio by source according to the presence of dependent children

Three types of debts which see increases when there is presence of a dependent child, asshown in Figure 1 13: they are debt against the AFE, private and total debt. There is anaverage of about $4,000 higher debt and the average debt for students with dependentchildren goes above $20,000. In the case of the AFE, we believe that the increase in debtis caused by a prolongation of studies.

!"#$ %&'()$ "*+',,-.*+'/$

012*,$

3*4/$-45*42$6$78*&9-$ :;<;=>$ ?@<A=>$ BA<C=>$ @?<:=>$

#45*42$6$78*&9-$ AD<@=>$ ;@<:=>$ DE<==>$ AC<A=>$

=<==>$

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D=<==>$

?=<==>$

:=<==>$

;=<==>$

@=<==>$

C=<==>$

A=<==>$

E=<==>$

B==<==>$




Figure 6-12: Change in average amounts of debt by source according to the presence of dependent children

Inadequate financial support for student parents, combined with the generalshortcomings of the program of loans and bursaries, place these students in anextremely precarious financial situation. This can seriously compromise their ability tocontinue their academic studies.

6.1.8. Status of First-Generation Students (FGS)

The university system developed largely in the periods when the government expandedaccess to university studies. The result is that 44% of Quebec students are first-generation students. Remember that parents with a university education generally havehigher incomes. Conversely, the FGS are generally more vulnerable, which is explained

in part by the lack of university educations amongst families. The literature suggests agreater aversion to debt due to a lower cultural capital, which is mainly, manifested inuniversity studies admissions. It is generally recognized that these students also needspecial attention to avoid prolonging their university studies (Auclair et al, 2008). However, it is easy to see that the status of FGS has a considerable influence on studentdebt. There is a statistically significant correlation between debt ratio for FGS (Φ = - 20),private debt (Φ = -, 08) and total debt (Φ = - 14). Figure 1-14 shows these key variations:there maybe variations of 7 to 14 percentage points in all cases except that of familydebt.

!"#$ %&'()$"*+',,-.

*+'/$012*,$

3*4/$-45*42$6$78*&9-$ :;$<=<$$>$$ ?$@;A$$>$$ A$;B=$$>$$ :C$<<A$$>$$

#45*42$6$78*&9-$ :B$A?C$$>$$ @$A;@$$>$$ <$@::$$>$$ ;=$@D:$$>$$

$E$$$$>$$

$A$===$$>$$

$:=$===$$>$$

$:A$===$$>$$

$;=$===$$>$$

$;A$===$$>$$




Figure 6-13: Change in debt ratio by source based on the generation of the student

The situation is somewhat less clear with respect to amounts of debt incurred. Twotypes of debt emerge: on the one hand, debt faced by family or friends (rpb = .07 at p<010) is weakly correlated with the students’ generation as parents with a universitydegree better understand the reality of university requirements and are therefore morewilling to lend money to their children if necessary. However, this does not eliminateoverall debt from all sources tolled, to be higher (rpb =-, 08) for first-generationstudents; the idea that they are most vulnerable is therefore valid.

Figure 6-14: Change in average amounts of debt by source based on the generation of the student

6.1.9. The socio-economic characteristics determine a significant portion of the accumulated debt

What can be learned from this analysis of socioeconomic characteristics? Table 6-6summarizes the statistical tests performed in this section.

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Table 6-7 : Summary of statistical tests on socioeconomic characteristics

AFE Privé Famille/amis Total

Gender

Rate;Φ ,00 ,02 ,00 ,01

Amount;rpb -,03 -,08*** -,03 -,06***

Age

Rate;r b ,25*** ,17*** ,07*** ,19***Amount;r ,16*** ,11*** ,02 ,22***

FamilyIncome

Rate;rpb -,42*** -,16*** -,10*** -,34***

Amount;r -,17*** ,03 ,02 -,16***

Amount;ρ -,22*** ,04 ,05* -,24***

Residence

Rate;Φ ,32*** ,17*** ,10*** ,30***

Amount;rpb ,16*** ,13*** ,09** ,23***

Movingforstudies

Rate;Φ -,14*** -,04*** -,05*** -,14***

Amount;rpb -,01 -,11*** -,11*** -,07**

DependentChildren

Rate;Φ ,17*** ,09*** ,06*** ,11***

Amount;r b ,13*** -,05* -,01 ,17***FirstGeneration

Students

Rate;Φ -,20*** -,08*** ,01 -,14***

Amount;rpb -,04* -,01 ,07** -,08***

It is clear that some students are more vulnerable than others. As for the average debt,the inability to live with one’s parents, having children or being a first generationstudent all increase one’s chances of being in debt. The same associations are observedin the amounts of debt. Aging tends to lead to greater and higher debt which is likelyrelated to having children or not being dependent on one’s parents. Age, however, has

no influence on family debt.Students in remote areas often have a more difficult financial situation as their debt ismore frequent and higher. Having to leave one’s home town in pursuit of a highereducation also places students in a situation where debt becomes more frequent andlarger, especially in the private sector.The biggest factor in student debt is parental income: the more one comes from awealthy family, the less chances of getting into debt. However, the amounts associatedto private debt and household debt is stable, contrary to the amounts borrowed from theSFA.Finally, gender predicts the propensity to borrow wrong: there is a statisticallysignificant but weak from being a man and debt levels. Forms of debt have similarprofiles. The SFA is influenced by all the socioeconomic factors except sex. The private

debt is slightly more stable factors as: the amount is not influenced by parental income.Family debt is the most stable of all, with variations low, but significant regardless of thecharacteristics. Turning to the analysis of school characteristics.

6.2. School Characteristics

The questions used in this survey posed very few questions in regards to schoolcharacteristics, and many of those posed are not of interest for the purposes of thisstudy. However, we are able to extract some information about academic progress, the




length of time for completing the degree, extending the length of time required tocomplete one’s studies and the field of study.

6.2.1. Previously Existing Debt

Before going further, it is important to look at the official statistics of the student

financial aid program. Indeed, one of the weaknesses of the study is that it includes onlystudents enrolled at the undergraduate level. However, an important determinant of student debt is academic progress. Table 1 7 illustrates this reality.

Tableau 6-8 : Profile of borrowers based on academic progress

Undergraduate

studieswheredebt

isincurred

Lenders Proportion AverageDebt

Amounts

Undergraduate 11324 63% 11295$

CEGEP 6565 37% 16001$

Total 17889 100% 13022$

Source : AFE, 2010, p. 73

It can be seen quite easily that being in debt in college tends to increase overall studentdebt: the average loan is 1.4 times higher for students who are in debt in college and atthe undergraduate level than for students who only seek loans at the undergraduatelevel. Loan limits are lower in college: however, study periods are longer than at theuniversity, which leads to a similar annual debt.

6.2.2. Academic Progress

We can also estimate the increase in the debt average under consideration in other ways: by isolating the students according to their year of study. This gives a very roughestimate of a longitudinal study, which is by far the most appropriate tool for such anexercise. In the absence of such a tool, the year of study allows a satisfactory estimate.

To do this we convert the year of school entry to estimate the student’s current year of study and current debt variables (not debt estimated at the time of graduation). The yearof study is calculated based on the year of entry into the school and the current schoolyear. Thus, a student who registers in August 2009 will be considered in their first yearof study: however, a student who enrolls in school for time in January 2009 would beconsidered to be in their second year of studies.To begin with, Figure 1-16 shows the division of students according to their status intheir current program of study. As can be seen, 17% of students are enrolled for morethan three years which is beyond the “normal” time required for completing a bachelors degree. This may partly be explained by factors such as needing to prolongone’s studies as well as the initial duration of the program itself.




Figure 6-15 : Distribution of students according to their progress in their program

The debt ratio is not stable from year to year. As for the SFA, the debt ratio increasesfrom 2 to 8% per year, with similar variations in all forms of debt. This reflects the factthat the original financial plan put in place for studies does not always last in itsentirety. Students who do not necessarily want have debt at the beginning of theirstudies will probably be pushed to do so as they are confronted with the financialrealities of the university system.

Figure 6-16 : Change in debt ratio from source depending on year of study

The average debt follows a similar slope. Students who have loans complete their firstyear, with an average of about $7,918 in debt. As noted earlier, we also find that manystudents are on loans beginning as early as upon entering the CEGEP system. Theannual variances are however, less significant than that of the proportion of studentswith debt: of course, every year, new students begin to go into debt of some kind;

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nevertheless, some patterns emerge from this practice.The SFA debt increases at an average of $ 1,500 per year, which is lower than the loancap. Many students probably apply for the program, which reduces the growth of debt.Private debt on the other hand increases steadily each year at a rate of approximately $1,000 per year. Meanwhile, family debt is the most stable, remaining around $4,000 onaverage.

Figure 6-17 : Change in average amounts of debt by source according to year of study

Progress in one’s program of study also increases the number of sources of debt. Onequarter of students had multiple two or three sources of debt in their first year of studywhile the rate stands at 36% of fourth-years, which corresponds to the last year of studyfor many including those who may have prolonged their studies. Thus, the more

students advance in their studies, the more the vulnerable populations will accumulatemore and more sources of debt.We can also predict the impact of debt on the prolonging of studies (see below):Students who are in debt usually take slightly longer to complete their studies thanthose who are not, thus increasing their representation in enrolment of studies for fouryears or more.

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Figure 6-18 : Year of study and number of sources of debt

6.2.3. Duration of the Degree

For this component we asked students to identify the year and month they began andwould finish their degree. Therefore, the data presented here does not adequately reflectthe duration of the academic progress as it does not take into account changes inprograms.Not surprisingly, most students (46%) expect to complete their degree in three years; aminority (12%) are enrolled in shorter programs; while 32% of students who expect tocomplete their degree in four years: a requirement for some programs (education,engineering), but a sign of prolonging studies for others. Bear in mind that the averagelength of a degree is 6.7 semesters of full-time studies (MELS, 2010: 83) which is theequivalent of slightly less than three and a half years.

Figure 6-19 : Description of the expected length of the degree

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A longer degree is usually a guarantee for increased debt. Students who enroll in shortprograms, however, have a higher tendency to take out a loan, as shown in Figure 1 21.However, the distribution is surprising: students who expect to complete their degree inone or two years (a rare phenomenon among students enrolled full-time) have a greatertendency to take out a loan for their studies.We observed a statistically significant relationship for all forms of debt except for loansfrom family members, which is relatively low, which is reflected the more parabolicappearance of the distribution line.

Figure 6-20 : Change in debt ratio by source according to the duration of the diploma

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Again, the distributions of the average debt proved a little more sporadic. However, aclear upward trend in average in a linear way in comparison to the duration of studies isnoted. There are linear relationships still here, but a small effect on the duration of thedegree of average debt can be noted. On average the high debt of respondents whoexpect to complete their degree in one or two years is probably due to accumulated debtover the course of a previous degree (here we are referring primarily to the college level,where the potential of being in debt, while lower than that of university studies, remainshigh). Due to the current length of time required to complete a degree, a studentcompleting a bachelor's degree certificate would also have a high accumulation of debt.

Figure 6-21 : Change in average amounts of debt by source according to the duration of the diploma

The next section illustrates the relationship between debt and longer studies in a moreshocking way.

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6.2.4. Already Increased the Time to Complete Studies

Close to 35% of students said they have been required to extend their studies. However,this extension is associated with higher debt rates, as shown in Figure 1-23. Thesedifferences are statistically significant, the largest being in the rate of private debt. It can be assumed that extending one’s studies may lead some students to entering debt.

However, literature suggests that to go into debt causes students to prolong theirstudies by encouraging the student to avoid debt by maximizing their main source of independent funding: paid work during their studies. In fact, students who haveextended their studies have a total debt rate which is 1.2 times higher than those whohave never extended their university studies.

Figure 6-22 : Change in debt rates based on extensions of past university studies

The effect found on the debt ratio earlier is not reflected in the average debt. The onlysignificant statistical differences are on the SFA and total overall debt. This is normal asa one-year extension adds about $ 2 440 to the debt of a student who subscribes to theSFA. The surprising stability of other sources of debt confirms the idea that studentstend to adopt behaviours that limit their personal debt. A student who chooses toextend his studies, for example by signing up for twelve credits per term rather thanfifteen in order to dedicate some of their time to work while there are pursuing theirstudies which minimizes their personal debt.

Figure 6-23: Change in debt amounts based on extensions of past university studies

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6.2.5. Areas of Study

We grouped the study areas based on their profitability. To do this, we categorized thefields of study presented in the survey into two areas: high and low profitability(Government of Quebec, in 2008 FEUQ, 2010a, p. 69). These categories are presented inTable 1-8.

Table 6-9 : Classification of the curriculum according to their profitability High profitability Low ProfitabilityArtsLettersEducation

Humanities

LawApplied SciencesBusiness Administration

Health SciencesPure and Applied Sciences

Students in these two categories often possess different characteristics. In the fall of 2009, students in areas with higher economic efficiency had an employment rate whichwas smaller, were required to spend more on school supplies, came from easierupbringings, were less frequently first generation students, were often parents and havea somewhat higher spending limits. Overall, they have, more favorable socioeconomiccharacteristics but higher expenses for studies and lower course loads. Table 1 9presents these correlation coefficients.

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Table 6-10 : Correlation coefficients between field of study and certain characteristics Coefficient

correlation

AutonomousEmployment

Rate2009

rpb=-,13***

SchoolSuppyRates rpb=,17***

FirstGenerationStudents Φ=,06**

NetFamilyIncome rpb=,08**

Presenceofadependent

children

Φ=-,05***

As shown in Figure 1-25, there is no indication that significant differences exist in thedebt ratio between economically viable low and high programs. The only statisticallysignificant difference (p <, 050) is that of student financial aid which remains marginally

lower. Figure 6-24 : Change in debt ratio from source depending on the degree of economic profitability

Debt owed to the SFA does not vary depending on profitability of the degree chosen;however, other forms of debt do have somewhat higher averages. This is quite normal,as fortunately the loans and bursaries program does not fluctuate depending on

program of study. The differences are however, much greater in private and familyloans. The amounts loaned are much larger: about 1.5 times higher on average in bothcases. Financial needs are likely higher, pursuing studies in fields such as medicine andengineering are very academically demanding, and often take longer to complete.Another aspect that must be taken into consideration is the cost of specializedequipment required in these programs (computer software, working tools), which areoften much higher than in other areas which the AFE does not cover.

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In addition, we saw this in the previous section, financial institutions directly targetstudents enrolled in certain fields of study when giving credit loans. High debt rates arelikely the result of a low concentration of private loans which are abnormally high. Infact, the total debt of students in private funding is only 1.1 times higher than the debt of those registered in the areas of low profitability.

Figure 6-25 : Change in average amounts of debt by source based on the profitability of the diploma

6.2.6. At Risk Student Profiles

Some students have characteristics which identify them as having high-risk profiles.Table 6-9 presents the results of statistical tests presented in the previous section.

Table 6-11 : Summary of statistical tests on school characteristics

AFE Private Family/Friends Total

Length

Rate;rpb ,05*** ,06*** ,01 ,04***

Amount;r ,08*** ,14*** ,09** ,11***

Amount;ρ ,07*** ,12*** ,01 ,10***

PastExtensions

Rate;Φ -,08*** -,12*** -,09*** -,11***

Amount;rpb -,10*** -,01 -,02 -,09***

Profitability

Rate;Φ -,02* -,01 -,01 -,02

Amount;rpb ,00 ,18*** ,16*** ,07***

The length of time taken to complete one’s studies partly explains the rising amount of debt, particularly in the private sector, however, the relationship between the two isweak. In addition, the more one continues in their academic career, the more they gointo debt and as a result, the amount of debt increases, regardless of its source. If westart going into long lasting debt it is usually only once we have completed our studiesthat we are able to repay the loan.

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The field of study has no impact on the debt ratio: however, students in areas of highprofitability are often more in debt than their colleagues in other disciplines. This can beexplained by higher material costs, greater difficulty balancing work and study andaggressive financial offers for these students.

Lastly, extending one’s studies has an influence on the interest rates as well as the

amount of debt one acquires throughout their academic career.The analysis of socio-economic characteristics singled out students who are morevulnerable and more prone to debt: the older students from lower socio-economic backgrounds, who must leave home, those with children, and those who have extendedtheir studies or study in economically viable programs. Being first-generation studentsalso puts the student in a risky situation. In short, debt is more common in people whoneed support: often those where financial support is low.




7. The Impact of Sources and Methods of Funding

In this section, we present the impact of total funding on student debt, as well asthe effect of paid work and parental contribution, which comprise two major sources of funding. For a more detailed analysis on this subject, the reader is invited to consult the

survey, Sources and Methods of Funding for undergraduate students, published by theQuebec Federation of University Students (FEUQ).

7.1. Total Funding

It is necessary to recall a few facts regarding total funding of undergraduatestudies. On one hand, we are talking about relatively low funding, with the averagefalling at $13,819 and the median sitting at $12,500. This includes loans and bursaries,merit grants, paid work, various family contributions and alimony.

Figure 7-1: Description of Total Funding

It is also interesting for us to focus on the number of available funding sources.We have narrowed it down to four major sources of funding: paid work, familycontribution (which includes contributions from both parents and spouses), studentloans and various bursaries granted out of merit or for special projects. Figure 1-2describes the results. The majority of students use two different sources of funding inorder to successfully carry out their studies. It is rare to be without any sources of funding (a result mainly attributed to non-responses), or to have access to all foursources of funding.

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Figure 7-2: Description of Number of Funding Sources

With the exception of family debt, all forms of debt increase with an increase of total funding. However, as Figure 1-3 illustrates, the effect is closer to resembling aparabolic relationship for loans from student financial aid (SFA). It is natural that thispercentage would vary in such a way: the program allocates substantial financialassistance (with the potential of acquiring close to $10,000 for the average universityyear of thirty credits), and thereby raises the average amount of funding for which it isone of the major constituents. The variation in private debt can be explained by a rise inthe tendency towards debt or by entirely private funding of university studies. We mustnonetheless note that in contrast to AFE loans, personal loans are not taken into accountwhen calculating the average funding of a university year.

Figure 7-3 : Variation in debt percentage by sources as a function of total funding

The average debt amount presents a more unforeseeable pattern. The only

statistically significant variation lies in the area of total debt. Debt owed to the AFE

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presents a barely linear pattern, better reflected by non-parametric tests (ρ=0.09 to

p<0.001). However, the average debt is higher for students with funding ranging from

$20 000 to $30 000 per year; we can suppose that these are the students who reached

their debt limit with the AFE, or who, by working more, wish to avoid accumulating

supplementary debt for the sake of finishing their studies.

The average personal debt is a bit higher for students with total funding rangingfrom $1 to $10 000; for some students, personal debt can replace AFE as a source of funding, though the pattern is not widespread like we saw in section Error! Referencesource not found.*** As a general rule, the increase in funding negatively correlateswith the the level of personal debt (r=-0.03 to p<0.050), a sign that students areattempting to avoid debt by working.

As for the variation in amounts of family loans, it is not statistically significant,As for the variation in amounts of family loans, it is not statistically significant,

despite an increase for students with high funding.

Finally, the total debt tends to grow as a function of total funding ; here, there is

probably an effect of including AFE loans in the interpretation of total funding.Figure 7-4: Variation of average amounts of debt by source as a function of total funding

Total funding varies in a sometimes unpredictable way with student debt;however, we notice an increase in the average debt in relation to total funding, up to apeak which takes place at the income bracket of $20 000 to $25 000. We are probablyfinding a variation that is parallel to SFA student loans, since the study of other kinds of debt is either inconclusive (family loans) or indicating a negative relationship (private

loans).

7.2. Paid work

Paid work represents 55% of the total funding of undergraduate studies. In mostcases, this is the only source of independent funding for students. However, withoutstudying the phenomenon in detail, we must remember that working throughout one’sstudies has an overall negative impact on academic success and perseverance. Also,literature uncovers a complex relationship between the two phenomena: many students

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try to avoid debt by working. In the next section, by looking at the employment rate inautumn 2009, at the numbers of hours worked in autumn 2009, and at the gross incomefrom paid work, we will see whether or not this phenomenon can be quantified. Wetook autumn 2009 since it is the period for which we have the most valid data. That said,the study of the winter 2009 period may reveal interesting changes in the employmentrate, but this falls outside of this study’s objectives.

7.2.1. Presence or Absence of Paid Employment in Autumn 2009

During autumn 2009, 63% of students held at least one paying job. Balancingwork with study is therefore more a reality than ever. The rate of employment has nodiscernible effect on total debt, which is surprising. However, there is a clearer effect onthe sources of debt. Statistically, the presence of an SFA loan has a lower effect on therate of employment in autumn 2009 (Φ= -0.06). Thus, the presence of financial aidseems to allow many students to devote themselves fully to a term of studies, which isone of the program’s goals. Yet conversely, the percentage of private debt is positivelycorrelated with the employment rate (Φ=0.08). We can suppose that private loanscomplete the funding obtained by paid work, particularly for students whose public

funding is insufficient via the student financial aid program (SFA).Figure 7-5 : Variation in debt percentage by souce as a function of the presence of a job in autumn 2009

The study of average amounts of debt does nevertheless validate the hypothesis, as isdemonstrated by Figure 7.6. When students cannot hold a job, either because they areregistered for the entire year, including the summer (some are in a cooperative

program), or due to problems on the job market, it seems like debt is what compensatesfor lack of funds. In fact, all the relationships are statistically significant and correlateholding a job with having a lower debt. We have two plausible explanations for this:

1. On one hand, paid work is used as a strategy to limit accumulated debt, even for

students who are in debt. Hence, a substantial concern prevails regarding theamount of accumulated debt, which propels students to work. The debt amountswould then also be the determining factor in a student’s likelihood of working.

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2. On the other hand, we might conclude that students without jobs who financetheir studies by going into debt do so because on a practical level, it is impossiblefor them to work during their studies. Earlier in this study, we labelled debt interms of fields of study. Often fields of higher economic profitability are moredifficult to balance with paid work and the costs are the highest. In these cases,the lack of a job is mainly compensated for by going into debt.

When students cannot hold a job, either because they are registered for the entire year,including the summer, or due to problems on the job market, it seems like debt is whatcompensates for the lack of funds.

Figure 7-6 : Variation of average debt by source as a function of the employment rate

As we will see further on, the absence of parental contribution also plays a role instudent debt. Managing the costs of study without a job or the benefit of parentalcontribution makes for a very arduous task and could easily be associated with highdebt.

7.2.2. Average number of hours worked per job in autumn 2009

Quebecois students work a lot. In order to obtain the following data, we made anaverage number of hours worked per job in autumn 2009. This handling of data is notideal. Unfortunately, the data does not allow us to know the precise working periods.Adding up the data would give markedly elevated results and would overrepresentstudents who held several jobs concurrently during the given period. We must alsonote that the median and the mean are very close to one another; we have thereforefavoured the mean. This method seems to underestimate the number of hours workedover the course of study; SFA’s study on students’ living conditions found an averagenumber of around 17 hours of paid work per week (MELS, 2009:58).

Of the 63% who combined work and full-time study in autumn 2009, 22%, that is, nearlya quarter, worked 21 hours or more per week. The majority, 55%, worked between 11and 25 hours per week. The average number of worked hours is around 16. The breakdown is presented in Figure 1-8.

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Figure 7-7 : Numbers of hours worked per week, autumn 2009

The gathered statistical testing show significant statistically differences for private loans(rpb= 0.10 to p< 0.001). Students who take private loans seem to work more hours,likely so they’ll succeed in paying the interest associated with their loans. A correlationalso exists with the total debt (rpb=0.05 to p<0.010).

Error! Reference source not found. shows that the lowest percentage of total debtoccurs in students who work less than 20 hours a week; it is higher for those who do notwork, and for those who work more than 20 hours. Once again, the idea of a debtavoidance strategy seems to be confirmed. We can assume that when choosing betweentaking a loan from the AFE and working, many students are choosing to combine work with studies. In many cases, however, we should not call this a choice, but rather an

obligation. SFA’s criteria are notorious for their inability to acknowledge the realityfaced by students. An example among others is their policy on parental contribution.We can therefore add a circumstantial obligation to work to the debt-avoidance strategy.

The data on private debt tends to confirm such a scenario. For example, the percentageThe data on private debt tends to confirm such a scenario. For example, the percentageof personal debt increases in a marked and statistically significant manner with thenumber of hours worked during the course of study in autumn 2009. Resorting topersonal loans for living expenses seems to coincide with an intense combination of work and study.

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Figure 7-8 : Variation of the level of debt by source as a function of the number of hours worked per week per job in

autumn 2009

The model does not reveal any statistically significant relationships on the link betweenthe amount of accumulated debt and the number of hours worked. The level of debtaccumulated with the AFE seems pretty stable, with total variations being less than$1000, apart from extreme values. To a great extent, this can be explained by the cap onloans, which consolidates the size of loans. We saw that the main impact is on the debtpercentage and not on the debt amount.

In terms of private debt, however, it seems that students who work less than 20 hours aweek run into more debt than those who work more than 20 hours a week. Familyloans do not present a clear statistical relationship with the level of debt. However, they

are higher for students who worked few hours of paid work, a sign that these loansrespond more directly to an expressed financial need, a bit like private loans.

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Figure 7-9: Variation of average amounts of debt by source as a function of the number of hours worked in 2009

Overall, students who work little, either by choice or obligation, go deeply into debt, justlike those who work a lot. The first case can be explained by a choice; the second, byfinancial obligation. In the middle, we find students who work moderately, probably toavoid accumulating supplementary debt, or else to fill the holes in their loans and bursary program through whatever way they can.

7.2.3. The presence or absence of a job during the year

It’s no surprise that the annual rate of employment operates in about the same way asthe employment rate for autumn 2009. Students without jobs are a bit more at risk of going into debt and a bit less at risk of acquiring private debt. The other relationships

are not statistically significant.Figure 7-10: Variation in debt percentage by source as a function of job status

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Globally, students who don’t have a job have a higher level of debt. All the statisticaltesting is significant. The amount of family debt is again much higher for studentswithout jobs.

Figure 7-11: Variation of average debt amount by source as a function of job status

7.2.4. Gross Annual Income from a Job

Final indicator taken into account: the gross annual income from paid work. Contraryto the two indicators taken into account earlier, this one gives an idea of the student’sannual financial capacity. However, we must note that the data act in very similarways. The average annual income from work is around $8929, and the median isaround $7500. If we compare the annual income to the actually incurred spending (infra

section 8.1), we can thus easily see that the majority of students cannot subsist on paidwork. It is also important to remember that the period of 2009 was marked by asignificant rise in unemployment for young people during the summer season.

Figure 7-12 : Description of gross annual income from a job

Gross Income

Average $8 929

1st quartile $1 500

Median $7 500

3rd quartile $13 000

Note: for the statistical testing, we reported that people without a working income asmissing values. Hence, we are only targeting students who worked throughout theyear.

There are statistically significant relationships for all kinds of debt, but not for total debt.We observe a decrease in total SFA debt as a function of total gross revenue income, butthe level of decline is low.

Once again, the percentage of private debt grows with the gross annual income (r= .07).This result seems counter-intuitive; it’s not impossible that we find students who have

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gone from full-time employee status to being full-time students. Hence, during theirstudies, they find themselves with financial obligations which surpass their financialcapacities. However, a high gross annual income makes someone more eligible forcertain personal loans. It is also conceivable that these students have very high livingexpenses which demand a great deal of paid work to simply make ends meet.

As for the percentage of family debt, it decreases slightly for those who work a lot. Inthe end, the total percentage of debt remains quite stable, regardless of the level of grossannual income from working. We can conclude that paid work replaces some fundingsources, but does not replace debt on its own. That said, it does not have the same effecton the level of debt.

Figure 7-13 : Variation on debt percentage by source as a function of gross annual income

The total gross annual income has a marked impact on the average debt amount, andthis occurs regardless of the source. We find statistically significant correlations for allforms of debt, with the most notable variations being with government financial aid, orloans from family or friends. The weakest correlation, which is with private loans, canexplain the slightly elevated debts of students with a higher gross annual income (inand around more than $20 000).

We must also note a major variation in the amount of money borrowed from parents orfamily when students don’t find a job. We can probably call this last resort support,occurring when the student is unable to find a job and requires funding that a privateinstitution will not provide. Recall that families who lend the greatest amounts arethose in the first and fourth quartile of the gross parental income; we can assume thatthe former have little money and cannot make a parental contribution, while the latterare probably less sensitive to the issue of student debt.

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Figure 7-14 : Variation in average amounts of debt by source in function of gross annual income

It is here that we really see the role played by paid work. We can conclude withouthesitation that a high working income can, to a great extent, help limit debt accumulatedover the course of studies. Those who benefit from a high income during their studies,particularly throughout the summer season, can establish a financial cushion that willhelp them throughout the year and thus allow them to avoid accumulating too muchdebt. Others do go into debt.

7.3. Parental Contribution

Parental contribution is the second greatest source of funding for registered full-timeundergraduate students. As the FEUQ restated (2011b), parental contribution is a legal

obligation written in the Civil Code of Quebec. The loans and bursaries program alsocalculates a parental contribution in function of a contribution table. However, thistable is very far from actual reality. The effect of this table is that SFA contributioncorrelates directly with family income; the more a family makes in a year, the less thechance a student will have access to the program. The distribution of parentalcontribution is proportional to family revenue. The richer a family is, the more likely astudent will receive a parental contribution. Table 1-1 presents the results of statisticaltesting. As we can see, the presence of a parental contribution is strongly influenced bygross annual income, and the amount of the contribution grows in function of income.

Table 7-1 : Correlation between family income and family contribution

Presence of parental contribution Amount of Parental contribution

Gross Annual Family Income r pb = -0.33*** r = 0.13***

The percentage of parental contribution remains low. For students who are presumedto receive a contribution and are eligible for the loans and bursaries program (thosefrom a family with a gross income of between $30 000 and $60 000), only 52% actuallyreceive a parental contribution. The median contribution for these families is around$2000.

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As a result, the presence and amount of the parental contribution should vary withfamily income. However, it is possible in certain cases that a student does not receive aparental contribution. This is the case for families whose relationships havedeteriorated, or for adult students who are returning to school and are generallyfinancially independent.

7.3.1. The presence of a parental contribution

According to our study, 61% of students receive a parental contribution. Receiving aparental contribution greatly decreases the rate of borrowing from SFA (rpb= 0.37) andfrom private institutions (rpb= 0.17). The difference is lower for loans coming from closefriends (rpb= - 0.01 to p< 0.010). The impact of not receiving family assistance is verysignificant; parental contribution makes up 22% of the total funding for studies.Without it, it seems to be very difficult for students to make it financially. The debtpercentage for students who don’t receive parental assistance is 80%, 1.5 times higherthan for those who do. Recall that for the most part, these students come from poorerfamilies, or else they are going back to school. Thus, they make up vulnerablepopulations.

Figure 7-15: Variation of debt percentage by source as a function of the presence of a parental contribution

A similar, if more limited pattern can be observed in the average amounts of accumulated debt. The difference is not significant except for the debt owed to SFA andfor the total debt. Given the cap on loans, the $3800 difference on the average debtowed to SFA, is troubling. We can conclude that many students without a declared

parental contribution began to go into debt from cegep, thus increasing the averageamount of accumulated debt. Others may have had to stretch out their studies beyondthe bursary eligibility period (recall that debt has a detrimental effect on the length of study), and thus can only receive loans. Not receiving financial aid from parentsmultiplies total average debt by 1.5.

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Figure 7-16: Variation of average debt amounts by source as a function of the presence of a parental contribution

7.3.2. Amount of Parental Contribution

We will now study the amount of received parental contribution. First of all, note that itis important to remember the characteristics of families who provide parentalcontributions: generally, the families are more comfortable financially, and often have auniversity background. The majority of students who receive a parental contribution,63%, receive a contribution of less than $3000. Thus we are talking about a contributionthat, at most, covers the cost of an average university year. 12% receive between $3000and $4000, which covers tuition fees and some expenses, mainly the cost of transportation. Finally, one quarter receive more than $4200. For the distribution set,

the average is from $3689, against a median contribution of in and around $2600.

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Figure 7-17: Description of Levels of Parental Contribution

For students receiving a parental contribution, is there an influence on student debt? Itseems like there definitely is. On one hand, the debt percentage from student financialaid and the percentage of total debt diminish quite significantly. For students receivingmore than $4000 in assistance from their parents, we are talking about a debt percentagethat oscillates around 25%. Such a contribution, according to SFA calculations, would be required from a gross annual income of $47 000, though a family earning $37 444represents two parents working full time for $9.00 an hour, the minimum wage that wasin effect May 1st , 2009. As for the percentage of private debt, it diminishes slightly.

However, the percentage of family debt increases slightly with parental contributions(r= 0.03 to p< 0.050). We can conclude that some parental contributions are accompanied

with loans, or that some contributions were considered to be loans.Figure 7-18 : Variation in debt percentage by source as a function of the level of parental contribution

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Many interesting tendencies emerge by studying Figure 7-20. On one hand, we can seethat students who receive assistance from $2000 to $3000 have the lowest average debt.Recall that this is a group of students who receive assistance that correspondsapproximately with tuition fees. Those who receive more assistance also have higherlevels of average debt.

We also see a dramatic leap in family loans: 15% of the variation in the level of familydebt is explained by the level of parental assistance granted. Strangely, the more peoplerely on their parents to pay for their studies, the more their family debt increases. Theother relationships are not statistically significant, though we do notice higher amountsof private loans for the group with a parental contribution ranging from $3000 to $5000.

Figure 7-19: Variation of average debt amounts as a function of the level of parental contribution

7.4. Merit grants

In 2009, nearly 15% of students reported receiving a merit grant, or a grant forinternships. Bursaries are of an average value of $2616, but the median is much lower,at $1721. They also make up a fairly marginal source of funding; they represent just 2%of funding for full-time study in 2009 (FEUQ, 2010 : 42). We must also note that in thisspecific case, since such a low percentage of students receive this funding, the data issomewhat weak. Thus, the descriptive analyses are shown for your interest only. Theydon’t constitute as official data, since only statistical testing can truly be consideredsignificant.

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Figure 7-20: Description of amounts for merit grants and grants for internships

Increasing the volume of institutionally awarded grants is a solution that is frequentlycalled-upon in order to reduce student debt. It is notable that schools in other provinceshave a much more substantial budget for financial aid than we do in Quebec. Does theQuebecois experience allow us to conclude that these grants help reduce student debt?

7.4.1. The presence or absence of a merit grant

Figure 7-22 reveals a few slight differences in the profiles of students who receive bursaries versus those who do not. Their debt percentage with the SFA is somewhathigher (up to p< 0.050) and their private debt a little lower (up to p<0.010). However,these figures do not represent very significant statistical implications.

Figure 7-21: Variation of debt percentage by source as a function of the presence or absence of a merit bursary

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No linear statistical correlation can be observed in the average level of debt, asillustrated in Figure 1-23

Figure 7-22: Variation of average debt amount by source as a function of the presence or absence of merit bursaries

It is likely that since institutional bursaries are generally only granted for a period of ayear, they don’t have a longstanding effect on student finances. Also, some bursariesare only granted for specific projects, such as an internship or the completion of aproject. Hence, bursaries only represent a partial remuneration and mostly follow thecorrelations between work income and debt.

7.4.2. Level of Bursary

As we saw above, the size of institutionally granted bursaries at theundergraduate level is often small. Does the size of a bursary have an observable impacton debt? We already observed that the absence or presence of a bursary has littleimpact. Figure 1-24 illustrates the variation in the average debt amount by source as afunction of the size of institutionally granted bursaries. No statistical test providesconclusive evidence.

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Figure 7-23: Variation of debt percentage by source in function of the size of institutional granted bursary

Figure 1-25 illustrates the variation in debt amount as a function of the size of theinstitutional bursary. The only statistically significant relationship is with the amount of private debt (ρ = 0.12 to p < 0.010). However, as we can see, this does not constitute alinear relationship. There are two foreseeable explanations. One is that the presence of private debt is parallel to large bursaries granted for projects that require students totravel. A second possibility is that large bursaries are granted to students who presentsignificant financial difficulties that may put the completion of their education at peril.

Figure 7-24: Variation of average debt amount by source as a function of the size of institutional bursaries

We are far from affirming the uselessness of student bursaries outside of those offered by the loans and bursary program. To the contrary, such bursaries provide financialrespite to students who need them, and allow for the realization of projects that couldnot be achieved otherwise. That said, this method of funding is much more useful for

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students enrolled in graduate studies, and it does not seem to be a particularly effectivemethod in this very specific case of student debt. Nevertheless, the increase in theamount of private debt amongst students who receive large institutional bursariesremains difficult to explain.

7.5. Establishing the complex and multifaceted links between funding and debt

We must dissect the funding in order to properly understand the relationship existing between funding and debt. Analysis of total funding has become more complex by thepresence of SFA loans. The number of funding sources influences all types of debt,except for family loans. The more students must combine sources of funding, the morethey are at risk of going into debt. Table 7-2 presents results from statistical testing.




Table 7-2 : Summary of statistical testing between sources of funding and debt

SFA Private Family/Friends Total

Total Funding

Rate; r pb 0.09*** 0.10*** -0.02 0.07***

Amount; r 0.03 0.01 0.04 0.08***

Amount; ρ 0.09*** 0.03* 0.00** 0.12***

Number of Funding

Sources

Percentage; τ -c 0.30*** 0.05*** 0.01 0.19***

Presence of

independent work

2009

Percentage; Φ -0.06*** 0.08*** -0.02* -0.01

Amount; r pb -0.07*** -0.11*** -0.13*** -0.10***

Average hours

worked, autumn 2009

Percentage; r pb 0.00 0.10*** 0.01 0.05**

Amount; r -0.01 0.00 -0.03 -0.02 Amount; ρ 0.00 0.00 -0.04 0.00

Presence of Job Percentage; Φ -0.02*** 0.05*** -0.02* 0.00

Amount; r pb -.05** -.06** -.17*** -.07*** Total employment

income

Percentage; r pb -0.04** 0.07*** -0.04** -0.01

Amount; r -0.07*** -0.01 -0.02 -0.04 Presence of parental

contribution

Percentage; Φ 0.37*** 0.17*** -0.01*** 0.26***

Amount; r pb .20*** .07*** -.12*** .23*** Amount of parental

contribution

Percentage; r pb -0.15*** -0.07*** 0.03* -0.11*** Amount; r -0.04 0.05 0.38*** 0.06**

Amount; ρ -0.05* 0.06** 0.30*** -0.02

Presence of another

bursary

Percentage; Φ 0.03* -0.04** -0.02 0.01

Amount; r pb -0.01 0.03 -0.01 -0.00 Amount of Bursary

Percentage; r pb -0.02 -0.02 -0.04 -0.04

Amount; r -0.03 0.10 0.10 0.05 Amount; ρ 0.00 0.12** 0.11 0.04

The presence of a parental contribution, which is correlated with the gross family

income, predicts the level of student debt owed to the SFA and in private loans. It is thegreatest observable influence. The fact of receiving parental assistance significantlydiminishes the SFA and private debt percentages. The presence of a parentalcontribution does not however have any impact on the level of private debt, and itincreases the amount of family debt.

Paid work is the main source of funding for studies. Not working in autumn 2009tended to increase debt percentage with the SFA, though only slightly. The presence of a job also slightly reduced the amount of accumulated debt. However, the number of




hours worked in autumn 2009 did not have a notable influence: the hypothesis thatpaid work helps to avoid debt is still validated by the study on employment rate. Therate of employment over the course of the year showed a similar result.

The gross annual income from work has but one influence on the amount of total debt:the more students work a paying job, the less they’ll be in debt.

Finally, student bursaries of various types, with the exception of SFA bursaries, do nothave a significant influence on debt. At this point, they are not useful tools in thestruggle against student debt, at least not for undergraduate students.




8. The impact of the levels of expenses

We saw that the sources of financing have a limited impact, but important. As a generalrule, the higher the sources of funding, the lower the rate of indebtedness. Cumulatingat least two sources of funding also seems to have an impact. What about expenses?

We will focus on the levels of expenses of students. We will proceed to an analysis infour sequences: first, the level of total expenses, to then analyze university expenses,living expenses and other expenses.

8.1. Total expenses

It costs more and more to study. Total expenses include the entirety of the expensesincurred by students, such as tuition fees, school material, rent, food, transportation,expenses for dependent children, paid alimony, recreational expenses and otherexpenses.

One-third of students spend from $10,000 to $15,000 in a year; one-quarter, from

$15,000 to $20,000. The level of average expense is $16,434, compared to a median of $14,640, indicating an asymmetrical distribution, as illustrated by Error! Referencesource not found.. We must note that 23% of students annually spend more than$20,000 in tuition fees and living expenses.

We should note that the level of expenses is influenced, among other things, by theWe should note that the level of expenses is influenced, among other things, by thedegree of autonomy of the student (place of residence, age, presence of dependentchildren). This is often determined by the income level of parents: it is more probable fora student from a less well-off family to leave the family home. As we will see, the levelof expenses has a direct influence on the level of indebtedness.

Figure 8-1: Distribution of total expenses

The level of expenses is directly correlated with the level of indebtedness, but in an oftenmore surprising manner. First, we should note that all relations are statisticallysignificant, the highest with total debt and private indebtedness.

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In regard to debt due to SFA, the most critical bracket is found in the $10,000 to $25,000of annual expenses, namely 79% of students. This is where we find the highest rate of indebtedness (from 50% to 57%). It subsequently drops. Expenses and income areintimately related, and we can infer that students that spend more than $25,000 per yearhave considerable income – this is probably a return to studies or studies supported byaccumulated personal savings on the job market. Conversely, low levels of expenses(less than $10,000) are probably related to living with one’s parents.The rate of private indebtedness grows rapidly, but manifests itself in full expansion beginning at the level of expense of $15,001 and more, where it stabilizes around 45%.

The rate of family indebtedness grows in a slower manner, but also increases accordingto the level of expenses in a quite important manner. Its maximum limit is 25%, forstudents earning $25,000 and more. It is the only form of indebtedness that does notdecrease at the level of high expenses, which can be a sign of considerable financialprecariousness (which renders one ineligible for private loans) combined with a level of high expenses, such as the one that is engendered by the presence of a dependent child,and the absence of adapted student financial assistance. The close family then becomes

the last recourse.Finally, the rate of total indebtedness follows a similar slope to that of the rate of indebtedness in student financial assistance. Consequently, the more we spend, themore we risk indebting ourselves as the sources and modes of funding run dry: thisseems particularly true for students presenting a level of expense between $10,000 and$25,000 per year, which is far from being excessive.

Figure 8-2: Variation of the indebtedness rate by source based on the level of expenses

The relations between the level of expenses and the average level of indebtedness aremuch more linear: a rapid glance at Error! Reference source not found. immediatelyreveals it. All the relations are statistically significant.

The link between the level of expenses and indebtedness is surprising in studentThe link between the level of expenses and indebtedness is surprising in studentfinancial assistance. Students that present a level of relatively low expenses are probablythose that stay with their parents, which explains a much lower average indebtedness

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($8,000 to $9,000 accumulated, namely a little more than six semesters according toregular maximum loan limit of SFA) than their colleagues with higher expenses, whoseaverage indebtedness upon leaving is between $12,000 and $15,000.

The amount of private indebtedness is distributed in a somewhat particular manner:however, the relation is globally linear and the more expenses increase, the more the

average amount of the debt increases. The same motive can be observed in family loans.Figure 8-3: Variation in the average amounts of indebtedness according to the level of expenses

The more we spend, the more we tend to indebt ourselves, and the more the debt becomes heavier. There are nevertheless grounds to ask which expenses have significantimpacts on indebtedness?

8.2. University expenses

University expenses are of two kinds: tuition fees, which are all mandatory fees thatmust be paid to enroll in a university course, and school material expenses.

8.2.1. Tuition fees

The link between tuition fees and indebtedness is polemical. By presenting its policy of tuition fee hikes, the government of Quebec pretends that there will not be an increasein student indebtedness. Now, as we will see, in the current situation, where there existvariations between institutions in regard to mandatory institutional fees, the variation of mandatory fees for studies has a significant impact on student indebtedness.

Firstly, the amount of tuition fees is, let us remember, fixed by the government of Quebec. However, we also include ancillary fees, which vary according to theinstitution, even the faculty. These amounts vary according to the number of universitycredits, twelve being generally the minimum for being considered enrolled full-time in agiven term. In view of the simplified statistical treatment, we are using for this sectiononly the tuition fees of students who are of Quebec origins and permanent residents, theother students have tuition fees that are much higher, as illustrated in Error! Referencesource not found.. For Quebec students, the average is $2,618 for a year studies.

Table 8-1: Description of the amounts of tuition fees according to citizenship status

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Table 8-1: Description of the amounts of tuition fees according to citizenship status

Average Median N

CanadianresidentinQuebec 2618$ 2550$ 8013

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Permanentresident 2833$ 2700$ 348

Non-residentforeignerwithstudiespermit 7315$ 4900$ 321

Non-residentforeignerwithoff-campusworkpermit 8202$ 4572$ 38

Total 2865$ 2600$ 8938

Error! Reference source not found. describes the amounts of tuition fees paid in 2009 bythe students retained. Obviously, the majority of students paid between $1,000 and$3,000 in tuition fees. However, 17% paid between $3,001 and $4,000, which cancorrespond to two terms of study full-time and one part-time during the summer.

Figure 8-4: Description of amounts of tuition fees paid in 2009 by permanent residents and students of QuebecFigure 8-4: Description of amounts of tuition fees paid in 2009 by permanent residents and students of Quebecorigins

The rate of indebtedness is influenced by the amount of tuition fees, The mostsignificant relations are on private debt and family indebtedness (rpb=,04 et rpb=,05 àp<,001), though relatively low. Error! Reference source not found. shows the variations:influence is low, but present. The correlation with SFA is much lower and lesssignificant, which emanates from the very structure of the program.

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Figure 8-5: Variation of rates of indebtedness by source according to the level of tuition fees paid

The amount of tuition fees explains between 1% and 2% of the variance of the level of indebtedness. In brief, the higher the tuition fees in a given year, the higher theindebtedness. Error! Reference source not found. shows it well (note that students whodo not pay tuition fees are a very small population, who present particularities that areunique to them). We see a constant growth in the amount of indebtedness based on thelevel of tuition fees paid.Figure 8-6: Variation of the average amounts of indebtedness by source according to the level of tuition fees paidFigure 8-6: Variation of the average amounts of indebtedness by source according to the level of tuition fees paid

These results confirm on a small scale what should be in evidence: if tuition feesincrease, student indebtedness increases!

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8.2.2. School material

Mandatory school material is the other form of expense contracted during the course of studies. This consists of an annual average expense of $607, although an importantportion of students, namely 15.8%, spent more than $1,000 in mandatory schoolmaterial. The detail is presented in Error! Reference source not found..

Figure 8-7: Description of the amounts paid in school materialFigure 8-7: Description of the amounts paid in school material

High expenses in school material also lead to indebtedness. Error! Reference source notfound. illustrates the variation. In addition to the students who declared no expense,namely 0.4% of respondents, we see a continuous growth of indebtedness with schoolmaterial expenses. The strongest effect (rpb=,10 to p<,001) is on private indebtedness,which is explained by the imperfect coverage of the loans and bursaries program forthis type of expenses (we grant a lump sum and not an amount linked to the expensesreally incurred). The impact is obviously low, which explains the relatively minimalamounts in play, namely 4% of total expenses.

Figure 8-8: Variation of indebtedness rates according to the level of expenses on school material

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The same type of relation is observable for the level of indebtedness. Here, the impact isstronger for private indebtedness and family indebtedness (r=,12 and r=,13 to p<,001).However, all the forms of indebtedness are influenced by higher expenses in schoolmaterial, as we can see in Error! Reference source not found..

Figure 8-9: Variation of the average amounts of indebtedness by source according to the level of expenses inFigure 8-9: Variation of the average amounts of indebtedness by source according to the level of expenses inschool material

8.3. Living expenses

Paying for the university bill does not exempt students from spending on their livingexpenses. We will study three types of expenses, namely rent, food and transportationexpenses.

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8.3.1. Rent

For the series of tests that follow, we have preferred to analyze the rent expense of students who do not live with their parents. We have already seen, in any case, the factthat being a resident or not had a very important influence on the level of indebtednessas on the rate of indebtedness (supra section Error! Reference source not found.).

A student spends on average $6,899 for his rent, which includes the cost of rent,A student spends on average $6,899 for his rent, which includes the cost of rent,electricity, telephone, heating and furniture. The median expense is $6,000 annually, asign of the existence of very high rent expenses in the distribution. Most students, 65 %,spend between $2,501 and $7,500 per year for their housing, which corresponds to amonthly expense ranging from $208 per month to $625 per month. Various factorsinfluence the cost of rent, such as the number of housemates, the place of residence, andthe duration of the rental. A student that returns to his parents in the summer will savesubstantial amounts. Various students have high rent expenses: we can think thisconsists of student parents or students returning to studies. Given that we haveexcluded non-residents, students that have rent expenses of $2,500 and less per year isvery low (5%): we can believe that rent is taken into account by a partner, or (more

probably) students that were only tenants for autumn 2009, or only for study terms.Figure 8-10: Description of rent expenses

The more we spend on rent, the more we become indebted: the relation is true for allsources of indebtedness, as is illustrated by Error! Reference source not found.. It isstatistically significant for all forms of indebtedness, with the strongest relation forprivate indebtedness (r=,11 to p<,001).

Figure 8-11: Variation of rates of indebtedness by source according to the level of expenses on rent

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Figure 8-11: Variation of rates of indebtedness by source according to the level of expenses on rent

The same type of relation is at work on the amount of indebtedness, except that it is theamount of student financial assistance that presents the strongest correlation (r=,11 top<,001), while the link is very weak (r=,06 à p<,010) for private indebtedness.Figure 8-12: Variation of the average amounts of indebtedness by source according to the level of expenses on rent

Since the expenses associated with rent are generally the most important among allexpenses, it is normal that they are the most frequently correlated with studentindebtedness. Now, this is an expense that is rarely compressible, and rather dependenton the local market. Regions with rates of very low vacancy, such as Abitibi-Témiscamingue, do not leave much choice to students that must find a place to live. Inother cases, it is the presence of dependent children that increases in a significantmanner the costs associated with rent. The only solution then becomes co-tenancy,which is a widespread phenomenon: 28,9% of recipients of SFA shared a dwelling in

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2007, and 23.8% lived with a spouse, against 17.1% and 18.1% for non-recipients (MELS,2009, p. 47). Allowable expenses in SFA are notoriously low, and we can well believethat it is students who rely on it that are the most adversely affected, thus having to takeout a private debt that they necessarily wouldn’t have had to contract otherwise.

8.3.2. Food

Food expenses are the second most important item of expenses. The average annualexpense is $3,294, with a median expense of $2,400. This consists of an expenses itemthat is very stable based on the socioeconomic characteristics of students, but that seemsto be influenced by age (expenses increase with age).

We should note that only half of students succeed in feeding themselves with $7 per dayat least, the criteria of SFA (FEUQ, 2010: 55). Error! Reference source not found. describes the characteristics of food expenses.

Figure 8-13: Description of food expensesFigure 8-13: Description of food expenses

The rate of indebtedness presents variations that are difficult to define when we put inrelation with food expenses. However, we find significant statistical variations of theindebtedness rate for all sources when food expenses increase. The presence of dependent children just like age are determinants of the level of expenses on food, andthis can probably explain a part of the relation between expenses on food andindebtedness.

We should note this is a form of expense that is difficult to compress without putting in

peril one’s own health, which is not desirable for reasons that do not need explanation.Thus, the rate of indebtedness, just as the variations in the amounts of the debt, cannot be contained other than an increase in available funding, preferably in the form of bursaries.

It is particularly worrisome to see an important increase in the rate of privateindebtedness in students, who for various reasons, present significant expenses on food.It very probably consists of credit card expenses, which incur very high fees.

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Figure 8-14: Variation of the rate of indebtedness by source according to the level of expenses on food

All the relations between expenses on food and average indebtedness are statisticallysignificant (for family loans, it is significant to p < ,050). The different forms of debtstabilize in amounts of expenses on food of more than $3,000, except for private loans,which drop for the bracket ranging from $5,001 to $6,000 of annual expenses. Foodexpenses, however, only explain a low part of total indebtedness: 1.3% of the variance. Itis, of course, an expense that is difficult to compress.Figure 8-15: Variation of the average amounts of indebtedness by source according to the level of expenses on food

From the moment we indebt ourselves, it seems we have to limit our expenses in regardto food: doing the contrary creates a significant problem of indebtedness. This augurs badly in the current period of food inflation that we are experiencing. This isparticularly true for student parents, who have to assume high food expenses.

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8.3.3. Transportation

Transportation expenses are an important part, but difficult to define, of studentexpenses, given the variety of modes of transportation and varied distances. Theaverage annual expense is $851 per year, and the median is $549 per year, whichcorresponds to a CAM at a reduced rate. The description of transportation expenses

presented in Error! Reference source not found. is nonetheless richer. 16% of studentsdo not have regular transportation expenses (a sign they favor an active transportationor benefit from a universal collective transportation program, such as at the Universitéde Sherbrooke), and the majority spends less than $1,000 per year on transportation.

Figure 8-16: Description of expenses on transportationFigure 8-16: Description of expenses on transportation

Error! Reference source not found. describes the most regularly used mode of transportation in autumn 2009. Obviously, it is the personal vehicle that is the mostexpensive, with an average annual expense of $1,548. We should note that automobilesloans are not included in private indebtedness: we can thus believe that most studentsthat have to use a car use an already paid used vehicle, or borrow that of their parents ora relation. Furthermore, this is only 19% of students. However, more than three-quartersof students use a collective or active mode of transportation to attend university, whichare much less expensive.

Table 8-2: Description of the mode of transportation used most regularly in autumn 2009 and average annual

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annual

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Publictransit 56% 837$

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Walking 17% 208$

Car-pooling 3% 1190$

Personalvehicle 19% 1548$

The offer of a public transit service is an important determinant of the mode of transportation used. It is 88% of students that study in Montreal who choose active orcollective travelling, compared to 36 % of students in remote regions, who nonethelessvery often favor walking. Error! Reference source not found. illustrates the modes of transportation used. We can conclude that the quality of the collective transportationoffered is an important determinant of the costs of transportation: however, when it is

absent or deficient, students nonetheless search the most economical mode of transportation, and look toward active transportation and car-pooling to reduce thecosts associated with transportation.

Table 8-3: Description of the mode of transportation used most regularly in autumn 2009 based on the region ofTable 8-3: Description of the mode of transportation used most regularly in autumn 2009 based on the region ofstudies

Montreal Quebec Central

regions

Remote

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Publictransit 73% 40% 31% 6%

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Walking 11% 23% 27% 29%

Car-pooling 2% 4% 5% 7%

Personalvehicle 9% 27% 32% 55%

We clearly note that those who spend a lot on transportation have higher rates of indebtedness, as revealed in Error! Reference source not found.. We can also see adifference of nearly five percentage points between the total rate of indebtedness of students that spend less than $500 and those that spend between $501 to $1,000 per year.This roughly consists of the difference between a CAM bus pass at a reduced price andanother at a regular price. Students with levels of expenses ranging from $1,001 to$2,000 correspond to more onerous collective transportation services, generallyassociated with the Montreal suburbs. The lower effect of indebtedness can be explained

by the fact of their living with their parents.The model detects significant statistical correlations for SFA and private indebtedness:The model detects significant statistical correlations for SFA and private indebtedness:these are nonetheless often low (rpb=-,03 à p<,010 et rpb=,08 to p<,001). The distribution isnot very linear given the significant jumps between expenses for students travelling onfoot or bicycle, on public transit and personal vehicle.




Figure 8-17: Variation of the rates of indebtedness by source according to the level of expenses on transportation

The motive remains very similar for Error! Reference source not found.: however, wedo not find significant statistical correlations. The descriptive analysis does not allow usto ascertain particularly interesting motives.

Figure 8-18: Variation in the average amounts of indebtedness by source according to expenses on transportationFigure 8-18: Variation in the average amounts of indebtedness by source according to expenses on transportation

We can thus conclude that contrary to a received idea, students generally seem to travelaccording to their means. Transportation expenses are a quite bad indicator of studentindebtedness, and a surprising portion of these have no expense on transportation, asign that they choose active transportation (walk, bicycle), that they live close to theirplace of studies or that they benefit from a universal pass, such as at the Université deSherbrooke.

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8.4. Other expenses

Two other types of expenses are difficult to classify. This consists of expenses fordependent children, recreational expenses and other expenses.

8.4.1. Expenses for dependent children

We saw earlier that the fact of having a child or not leads to very important expensesand increased indebtedness. Now, the level of expense for dependent children also hasan impact.24 Annually, expenses for children represent for respondents that are parents,an average expense of $5,587 and a median expense of $4,347. Error! Reference sourceot found. describes the situation. Most parents have expenses for dependent childrenthat oscillate between 0 and $6,000, with most spending from $2,000 to $4,000. Thescarcity of daycare services in a university setting (CNCS-FEUQ, 2011) probably leads toits lot of additional expenses in many cases. Furthermore, this here consists of expensesassumed by one of the two parents, and not expenses incurred by the total family unit.

Figure 8-19: Description of expenses for dependent children

Error! Reference source not found. illustrates the variation of the rate of indebtedness by sources according to expenses for dependent children. We do not really see a veryinteresting motive, and only one relation is statistically significant: private indebtednessincreases with the level of expenses for dependent children (rpb=,11 à p <,050). Privatecredit is thus more widespread in student parents who have high expenses for theirchildren, whether it be through the presence of various dependent children or becauseof the age of the child.

Figure 8-20: Variation of the rates of indebtedness by source according to the level of expenses for dependent

24 This is a very small sub-sample (408 respondents). We thus have to proceed with caution!

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Figure 8-20: Variation of the rates of indebtedness by source according to the level of expenses for dependentchildren

The correlations are difficult to make on the level of indebtedness. Furthermore, weoften find ourselves with very small samples. There are no statistically significant linearrelations, as we can see in Error! Reference source not found.. However, the level of indebtedness in SFA and the private are correlated with the level of expenses fordependent children (ρ = -,11 and ρ = ,13 to p<,050). The level of indebtedness in SFAdiminishes with expenses for dependent children, whereas the level of totalindebtedness increases. We should note that the samples are miniscule and should betaken with caution.

Figure 8-21: Variation of the average amounts of indebtedness by source according to the level of expenses forFigure 8-21: Variation of the average amounts of indebtedness by source according to the level of expenses fordependent children

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Table 8-4 : Comparison of measures of the central trend of recreational expenses for Quebec households andstudents

Typeofhousehold Average Median

Oneperson 3410$ 2295$

Coupleonly 5628$ 4433$

Couplewithchildren,singlesonly 7997$ 6621$

Couplewithotherrelatedpersonornotrelated 8006$ 4984$

Singleparentwithoutadditionalperson 4711$ 3775$

Otherhouseholdwithrelatedperson(s) 5147$ 2492$

Otherhouseholdwithnon-relatedperson(s) 4860$ 3774$

Total 5477$ 4085$

Students 2339$ 1300$

The most comparable category, namely that of a household composed of only oneperson, presents much higher average and median expenses than students: this trend istrue for all types of households. However, these data are more difficult to compare

given that they include more than one individual.How are these expenses funded? On the one hand, it is important to note that studentsthat have a debt to SFA spend a little less on recreation than colleagues without financialassistance. The same motive (significant to p < ,010) can be observed on the total debt. Avery low positive effect can be noticed for those who indebt themselves to the private(significant to p <,050), while no trend is ascertained for family loans. Error! Referencesource not found. visually illustrates this in a very striking manner.

We should note that very high expenses on recreation can be associated with aWe should note that very high expenses on recreation can be associated with aparticular project (a trip, for example), for which the student was able to economizeduring a certain number of years, or can self-finance through a job. The negativecorrelation between the rate of indebtedness and expenses on recreation seem to showthis thesis.

Figure 8-23: Variation of expenses on recreation according to the rate of indebtedness by source

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The study of the average amounts of debt do not allow us to ascertain significantrelations, except on the level of total debt, that varies negatively, but in a very weak manner, with the level of expenses (r=-,03 to p<,050). We notice, however, that the levelof indebtedness to SFA diminishes up until expenses of $2,000 to $4,000, to then riseagain. The level of private indebtedness also seems a bit higher, but not in a significantmanner.

Figure 8-24: Variation in recreational expenses and other expenses according to the average amounts ofindebtedness by source

Recreational expenses do not seem to be a good explanatory factor of studentindebtedness. We even notice that students compress their expenses in this item whenthey already have current indebtedness. Non-parametric tests reveal two negative

statistical relations, on the level of indebtedness to SFA (ρ = -,05 to p<,010) and on thetotal level of indebtedness (ρ=-,05 to p<,001). The higher expenses on recreation areprobably only the effect of a minority that benefits from relatively lower living expenses.

8.5. The level of living expenses increases the level of indebtedness

The increase in the level of expenses has a general impact on student indebtedness. Infact, the higher the expenses, the more we tend to indebt ourselves, and the higherindebtedness will be. The level of total expenses alone explains 3% of variance in totalindebtedness. However, certain expenses have more influence than others.

Mandatory expenses (tuition fees and school material) have a direct impact onindebtedness: the higher the cost, the more we will have recourse to indebtedness.Living expenses, such as food and rent, have more or less the same behavior.Other expenses behave in a more surprising manner. The relation betweentransportation expenses and SFA is negative. We can then think that students who tendto indebt themselves will reduce their transportation expenses, by favoring collective oractive transportation, or by living near the university.

Expenses for dependent children do not have a significant impact on the level of indebtedness. It always consists of a very small sub-sample where indebtedness is

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already very high. Students do not tend to decrease the level of expenses devoted todependent children, which is reassuring.

Finally, recreational expenses and other expenses are not a source of indebtedness. Infact, students who use SFA spend a bit less than their colleagues who do not use it.However, there is a slight positive relation in regard to private indebtedness.

Table 8-5: Statistical analysis of the links between the sources of expenses and indebtedness

SFA Private Family Total

Totalexpenses

Rate;r pb ,08*** ,14*** ,11*** ,10***

Amount;r ,15*** ,12*** ,15*** ,18***

Tuitionfees

Rate;r pb ,02* ,04*** ,05*** ,03*

Amount;r ,15*** ,12*** ,13*** ,10***

Schoolmaterial

Rate;r pb

,06*** ,10*** ,07*** ,08***

Amount;r ,08*** ,12*** ,13*** ,11***

Rent

Rate;r pb ,06*** ,11*** ,07*** ,05***

Amount;r ,11*** ,06** ,08** ,14***

Amount;ρ ,13*** ,07*** ,09*** ,15***

Food

Rate;r pb ,05*** ,09*** ,08*** ,06***

Amount;r ,08*** ,07*** ,06* ,12***

Transportation

Rate;r pb -,03** ,08*** ,01 ,00

Amount;r -,02 ,01 -,05*** -,01Dependent

children

Rate;r pb -,06 ,11* ,03 -,06

Amount;r -,06 ,09 -,03 -,00

Amount;ρ -,11* ,13* -,07 -,04

Recreational

expenses

Rate;r pb -,06*** ,03** ,00 -,03**

Amount;r -,03 ,01 ,02 -,03*

Amount;ρ -,05** ,03 -,01 -,05***




9. The situation in graduate studies

9.1. Methodology and limits

The data of graduate students are drawn from the survey Sources and modes of funding graduate students , published in 2007 by the CNCS-FEUQ. However, it is more limitedthan the survey on undergraduate students.The sample is of 1638 respondents: for the purposes of study, we have only retainedfull-time students and those at the writing stage, which gives us 1,370 respondents. Thisgives us a margin of error of 2.6%, 19 times out of 20.

Students enrolled in the master’s without writing status could present vey differentcharacteristics, mainly because they do not have a right to the scholarships of researchgranting agencies. Unfortunately, the survey had a too little number of respondents of this type to be bale to analyze this population.

The questionnaire does not include questions on the levels of expenses or onindebtedness. The only question asked was on the level of accumulated indebtedness

during studies, which greatly limits the analysis that could be made. Furthermore, wecannot distinguish respondents that have a low level of debts from those that have noneat all, which limits the possibilities of analysis.

9.2. Description of levels of indebtedness

9.2.1. The debt due to SFA on completion

Student financial assistance is an important source of funding for graduate studies. In2006, 23,349 students were enrolled at the master’s level full-time and 11,786 at thedoctorate (MELS, 2008). 51% of master’s students and 21% of doctoral students enrolledfull-time benefited from the student financial assistance program (AFE, 2008, p. 40,

calculation of the author)As we saw earlier, students enrolled in graduate studies are subject to a highermaximum loan limit than their undergraduate colleagues. Furthermore, those whoindebt themselves to SFA have substantial debts: $16,304 at the master’s and $23,405 onaverage at the doctoral level.

Table 9-1: Number of borrowers that had to assume at the end of their studies the repayment of their loansobtained according to the amount of the student debt, 2008-2009

master’s Doctorate

1-5000$ 578 56

5001-10000$ 1407 125

10001-15000$ 1467 13615001$or

more

3171 685

Total 6623 1002

Average 16304$ 23405$

Source : AFE, 2010, p. 65




9.2.2. Description of the accumulated debt

Students enrolled in graduate studies often have very significant levels of debt.Although 47% of students had accumulated in 2006 less than $6,000 of debt, many weredragging very high debts, as indicated by Figure 9-1. One student in ten hadaccumulated more than $30,000 of debts. The average accumulated debt was situated at

$11,970, and the median debt at $10,500.Figure 9-1: Description of the level of indebtedness of graduate students

It is methodologically difficult to use this data to characterize indebtedness in graduatestudies. We will, however, examine the characteristics of students according to anothercriteria: the fact of benefiting or not from the student financial assistance program,according to certain socioeconomic characteristics.

9.3. Role of sources and modes of funding

Certain academic characteristics seem to have an influence on the propensity to indebtourselves or not to SFA. On the other hand, the fact of belonging to a research group isassociated to the fact of not needing student financial assistance, as is shown by Table9-2. There is a significant statistical difference, but weak (Φ=-,08 à p<,010).

Table 9-2: Belonging to a research group and participation in SFA

Master’s Doctorate Presenceof

SFA

Absenceof

SFA

Total

Researchgroup 37,00% 64,30% 37,70% 46,10% 43,30%

Noresearchgroup 63,00% 35,70% 62,30% 53,90% 56,70%

100,00% 100,00% 100,00% 100,00% 100,00%

Merit grants play a major role in the funding of graduate studies, thus contrasting withundergraduate studies. 44.1% of the funding of full-time students is made up of meritgrants or conferences and internships (CNCS-FEUQ, 2007, p. 42). Now, the fact of receiving one or various grants/bursaries reduces the propensity of indebting ourselvesduring studies to SFA, (Φ=-,11 à p<,001), as we can see in Table 9-3.

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Table 9-3 : Presence or absence of merit grants


SFA

Absenceof

SFA

Total

Ameritgrantormeritaward 17,80% 35,40% 17,50% 24,20% 22,00%

of2grants 6,90% 12,70% 6,90% 8,90% 8,20%

Morethan2grants 2,50% 9,40% 2,30% 5,10% 4,20%Nogrant 72,80% 42,50% 73,30% 61,90% 65,60%

100,00% 100,00% 100,00% 100,00% 100,00%

The presence of at least one grant for conferences or internships has the same effect, buta little less strong (Φ =-,06 à p<,050).

Table 9-4 : Presence or absence of a grant for conference or internship


SFA

Absenceof

SFA

Total

Grantforinternship,

conference

12,40% 34,50% 14,30% 19,20% 17,60%

No 87,60% 65,50% 85,70% 80,80% 82,40%

100,00% 100,00% 100,00% 100,00% 100,00%

The family contribution is a more marginal mode of funding for graduate studies: itonly represents 6.1% of the total funding of full-time studies (CNCS-FEUQ, 2007, p. 42).Once again, the presence of a family contribution (from the parent or spouse) makes a bit less probable enrollment in loans and bursaries (Φ =-,07 à p<,010).

Table 9-5: Presence or absence of a family contribution


SFA

Absenceof

SFA

Total

Familycontribution 36,70% 29,10% 30,00% 37,20% 34,80%

Nofamilycontribution 63,30% 70,90% 70,00% 62,80% 65,20%

100,00% 100,00% 100,00% 100,00% 100,00%

Remunerated work in graduate studies is analyzed according to two criteria: theinternal or external character to the university and the type of job. Now, as illustrated inthe two next tables, there does not seem to be an impact of the presence of these jobs onindebtedness to student financial assistance, contrary to the situation prevailing at theundergraduate level. We can believe that this consists of the more marginal sources of funding in relation to grants, which are the main determinant of funding graduatestudies.




Table 9-6: Presence or absence of an internal job at the university


SFA

Absenceof

SFA

Total

Teachingassistantship 17,70% 20,90% 20,20% 17,60% 18,50%

Researchassistantship 9,00% 15,00% 13,10% 9,10% 10,40%

Lecturer 1,50% 7,90% 1,50% 3,70% 2,90%Otherjob 9,40% 6,50% 8,30% 8,90% 8,70%

Nojob 62,40% 49,70% 56,90% 60,80% 59,50%

100,00% 100,00% 100,00% 100,00% 100,00%

Table 9-7: Presence or absence of an external job to the university


SFA

Absenceof

SFA

Total

Externaljob 51,90% 26,50% 53,50% 42,30% 46,00%

Noexternaljob 48,10% 73,50% 46,50% 57,70% 54,00%

100,00% 100,00% 100,00% 100,00% 100,00%

This brief analysis of the situation prevailing in graduate studies allows us to affirm thatcontrary to the situation at the undergraduate level, the best way to reduce studentindebtedness would be to increase the number and amount of merit grants offered sothat they respond to demand. We will return to this in the section on recommendations.




10. Analysis and recommendations

Student debt load in Quebec is difficult to analyze. As we have seen, there are variousangles of approach. Ours is to review the literature as well as a major quantitative study.Both the review and the study seem to make the same point: student debt load is firstand foremost a question of money. We will analyze this situation in two stages. First, wewill look at debt loads, starting from the choice to get into debt and the level of indebtedness, to the impact of debt in relation to six key factors: family background,individual characteristics, credit history, academic choices, external factors, and choicesfollowing the first degree or diploma. We will discuss the major differences between thethree forms of student debt. Finally, we will present a model of the effects discussed inthis section and a series of recommendations to limit student debt load.

10.1. Student debt: Key factors and impact

10.1.1. Family background

The choice to get into debt can be related to family background. Four factors play

important roles: the view of credit, the family income, the parental residence, and thelevel of schooling attained.

The first factor is sociological. Lea, Webley, and Walker (supra section 3.3.2) relatedgreater social support to indebtedness or at least a more tolerant attitude towards debt.Data from Quebec seems to support this theory, as seen in Figure 3-1. Christie andMunroe go further; stating that aversion to debt is lower among students from familieswith greater cultural and financial capital (supra section 3.3.3).

A parental contribution or lack thereof plays an even more important role. Not receivinga parental contribution multiplies by 1.5 both the rate of indebtedness and the amountof debt. The only exception is with loans, as the opposite occurs in relation to theamount owed (supra section 7.3). The greater the contribution received, the lower therate of indebtedness even while the amount owed stays stable. Once again, family loansare an exception. Of course, family financial capacity does have its limits, thus very highparental contributions are often accompanied by some loans.

Financial revenue has a decisive influence on student debt loads (supra section 7.1). It isresponsible for a 3% variance in debt load. Our results demonstrate that regardless of the source of debt, coming from a low-income family indicates a greater likelihood of indebtedness. It is not, however, a decisive factor in the amount owed, except to studentfinancial assistance. Family revenue determines, to a great extent, the presence of aparental contribution and its amount. Thus, students coming from more privileged backgrounds have greater chances of leaving university without financial problems.

Where parents live is also important. Distance plays a role, as noted by Frenette (supra section 3.3.3). In addition to uprooting students from their hometown, the further theuniversity is from the family home, the greater the cost to the student. Moving in orderto study multiplies the rate of indebtedness by 1.22 and the average total amount owed by 1.12 (supra section Error! Reference source not found.). Thus, moving to study atuniversity is an important factor in student debt loads.

First generation university students have a riskier academic profile and require specialFirst generation university students have a riskier academic profile and require specialguidance. They are more often in debt than second generation students (supra section




6.1.8). In addition, students who come from families without a university education areusually averse to higher levels of debt since they have little concrete proof of the benefitsof university education (supra section 3.3.2).

Being born in the “wrong” family greatly determines the rate of indebtedness and thelevel of student debt. The most vulnerable students, those whom we try to help with our

financial assistance system, are also those who must take on more debt in order tosucceed in university. Any increase in student debt loads hits them hardest. Next, weshall look at individual characteristics.

10.1.2. A student’s individual characteristics

Many individual characteristics are involved when we look at student debt loads, inrespect to choices and results. They include age, place of residence, whether one is aparent or not, paid work, and recreational expenses.

Age plays a decisive role in student debt loads (supra section 6.1.2) as it is responsible fora 5% variance in accumulated debt. The older the student is when starting university,the greater role debt plays in financing education. Their debt load, like their rate of

indebtedness, is twice as high. This is particularly true for students who are 25 or older.They correspond generally with the profile of a student returning to school. Being olderis also associated with various life choices, such as having children or no longer livingwith one’s parents. These characteristics correlate with student debt. It must also benoted that student debt delays university education and is a major reason for notattending, as Dubois has asserted (supra section 3.3.1.).

We have already seen that the place of residence is a decisive factor. Leaving the familyhome involves major housing and food expenses, which, previously, were probably not borne by the student. We have seen that total expenditures have a decisive influence onindebtedness (supra section 8.1) . Not living with one’s parents entails a major increasein the rate of indebtedness as well as in the amount owed. It is 1.7 times more likely that

a student who has left the family home will leave university in debt. That samestudent’s average debt will be 1.7 times higher than a student who did not leave home.The reverse is probably also true. Choosing to stay with one’s parents is probablyinfluenced by the high cost of independence, including the substantial debt load thataccompanies it.

Being a parent creates other major expenses. The presence of a dependent child (suprasection 6.1.7) multiplies by 1.4 the probability of indebtedness and doubles theprobability of taking out a loan from student financial assistance. The amount owedalso increases by 1.5 times. One in twenty students are parents and being a parententails an average annual expenditure of about $5587. Such a drastic increase in debt canonly have serious effects on the ability of already vulnerable students to continue their

studies.The literature generally confirms that students do paid work to avoid debt (supra section3.4.2). However, beyond a certain limit, paid work becomes detrimental to success thatmay lead students to take longer to graduate. Not working during school increases theaverage student debt load. The impact is greatest for students who did not work duringthe Fall 2009 semester. In addition, students who do not work and who work a lot (morethan thirty hours a week during the Fall 2009 semester) have something in common.They have a higher rate of indebtedness and more debt than those who took on a




moderate workload. The hypothesis that paid work is employed as a strategy to avoiddebt is confirmed.

Recreational expenses and other expenses determine a small portion of student debtloads (supra section 8.4.2), as they are nonessential. Students in debt tend to cut theseexpenses. They are already lower than such expenses for the general population in

Quebec. The only exception is with private debt. We might say that certain studentsdecide to consciously go into debt for a reason related to recreation. This connection ishowever very weak (rpb =,03 to p<,010).

Finally, mental heath can be affected by debt load (supra section 3.4.3). A high debt loadcauses a lot of stress, increases the probability of depression, and gives rise to anxiety.When financial institutions state that their lines of credit allow students to pursue theireducation free of financial worry, they are misleading them. Individual characteristicsplay an important role in the decision of whether to get into debt. Being older, a parent,or leaving the family home tends to increase debt loads. Students do adopt strategies tolimit their indebtedness by working during school, limiting their nonessential expenses,and delaying life choices such as having children or leaving home. Debt loads also have

an impact on students, as higher debt loads seem to entail a greater likelihood of working and greater psychological effects.

10.1.3. Credit history: the debt spiral

Previous experience with debt greatly influences student behaviour in relation to debt.We mentioned in the section 5.3 that there exists a debt spiral phenomenon. Taking ondebt from one source is more often than not accompanied by indebtedness to othersources. Increasing the amount of debt also increases the rate of debt from other sourcesexcept for family debt, which is generally taken on as a last resort. The amount of debtaccumulated from one source tends to determine the amount accumulated fromanother. This is not insignificant. While our system of student financial assistanceshould limit student debt, its outdated parameters lead to the accumulation of debt fromvarious sources. Certain characteristics of private debt, such as only having to pay theinterest on most student debt, encourage spiraling debt, which we will discuss furtheron.

In addition, students often have weak financial skills. They find themselves in the initialstage of what Duhaime has called, the cycle of debt overload (supra section 3.3.2). Theyare particularly vulnerable because they have low incomes and aspire to a high level of social mobility. Their financial literacy is also very weak. Among 18 to 29 year-olds,knowledge is limited and the main sources of information are their family and personalexperience (supra section 3.2.1). It bears repeating that previous family experience caninfluence attitudes towards student debt (supra section 3.3.3).

Thus, university students have many characteristics that make them more vulnerable todebt. They are less conscious of the associated risks and take on debt that often goes beyond their financial means. Many are at risk of finding themselves overloaded withdebt.

10.1.4. Academic choices

Academic choices and debt loads are interlinked. Indebtedness tends to lead to certainchoices, just as some academic choices are influenced by debt load.




We saw earlier that indebtedness reduced access to university education (supra section3.3.1). Financial reasons are the most frequently cited in cases where students do not goto university. Students who do go into debt tend to go to university later than those whodo not take on debt. In an American study, Dongbin Kim came to the conclusion thatdebt negatively influences perseverance (supra section 3.4.1). He found that an increaseof $1000 in loans causes a 1.6% increase in drop out rates for students from lessfortunate backgrounds. Thus, loans are generally a less effective tool than bursaries(FCBEM, 2009, p. 78).

Academic career plans also play a role. The amount of debt varies depending on whendebt is first taken on (supra section 6.2.1). The further on in a program, the more likely astudent is to take on debt (supra section 6.2.2). The rate of SFA debt increases from 2% to8% a year, depending on the how long the student has been studying. The longer ittakes to finish the degree, the greater the debt load (supra section 6.2.3). This isconfirmed when we look at students who take longer to graduate. Their rate of indebtedness is 11% higher (supra section 6.2.4). The relationship between debt andwork and debt load itself increases the time it takes to graduate. The impact isinterlinked: debt loads increase the probability of taking more time before graduating

and this, in turn, increases debt loads.The same type of relationship is at work when we look at fields of study. Students whoare more sensitive to risk when going to university will tend to favour subjects that arepractical and economically viable rather than those disciplines that are moretraditionally associated with university (supra section 3.3.4). A policy of high debt loadsputs disciplines that are less economically practical at a disadvantage. Specializing agiven field may influence debt loads, specifically private student debt (supra section6.2.5.). Certain factors are at work. The most economically practical areas of study areoften also the most demanding, reducing the time available for paid work. In addition,there is a sizable market for financial products aimed at students in certain disciplines(supra section 2.3.3.). The supply of financial products combined with a lack of financial

knowledge seems to lead to an increase in student debt loads in order to meet needsunmet by student financial aid. Such practices can also encourage compulsive buying,one of the causes of debt overload, by giving students the impression that they have thesocial status of someone much richer than themselves, thereby increasing theirexpenditures and debt load (supra section 3.2.2).

Academic success has an impact on debt loads, especially at the graduate level. Meritscholarships, awarded by provincial and federal granting agencies seem to effectivelyaddress student debt loads (supra section 9.3). Since debt is a reason for dropping out,we can say that being in debt has a negative impact on academic success. Thus we risk creating a vicious circle where students who receive merit scholarships are mainlystudents who come from more privileged backgrounds. The scholarships offered by

universities at the undergraduate level do not have the same effect (supra section 7.4),probably because the amounts are much smaller.

Debt loads and academic choices are interlinked. The prospect of debt reduces access toeducation and debt lengthens the time it takes to get a degree, which in turn increasesdebt loads. The ability to finish a course of study is also negatively affected. Debt loadsaffect the subject studied and this can, in turn, have an influence on debt loads. A policyof high debt loads probably accentuates these characteristics.




10.1.5. External factors

External factors are those over which the student has no control. They influence the rateof indebtedness and the amount owed. They can be under the government’s control oropen to the whim of market forces. The four major external factors are the cost of studying, the mix of loans and bursaries in a student financial assistance program, the

availability of private credit and the cost of living.From time to time, the Quebec government sets tuition fees. However, ancillary fees areunder the jurisdiction of universities. Even though differences between institutions arecurrently relatively minor, the fees do influence student debt load (supra section 8.2.1.).This is the relatively weak but still important link: as the mandatory costs of tuition goup, so do both the tendency to get into debt and the amount owed. This is counter-intuitive because students who attend more affordable institutions (the Université duQuébec network) usually come from lower socioeconomic backgrounds (a greaterproportion of first generation students and students studying part time, for example)than those who study at more expensive schools. Even if the government does notchange the loan limit, it is clear that the next increase in tuition fees will increase student

debt load since student financial needs will increase while their resources will not. As ageneral rule, higher tuition leads to higher student debt load.

The Quebec government has established a loans and bursaries program, described indetail in section 2.2. It is the government that determines a sizable part of student debtload by setting a loan limit as well as the repayment terms. Many students thus do notchoose to go into debt but are obliged to do so. In order to have access to studentfinancial aid, a student must accept to take on an, often considerable, amount of debt.This indebtedness results from a choice made by the government.

The supply of credit from financial institutions probably increases the level of studentdebt. We took note of this in section 2.3. There are many products that target studentsand they often provide very high loan limits. This is particularly true for students who

are enrolled in programs considered to be economically practical. The supply of credittargeting them is very impressive, with lines of credit that can go up to $200 000. Theprospect of incurring debt without having to pay the capital while in school can be quiteattractive. However, the profitability of a course of study is never assured and this canplace new graduates in an unfortunate financial position. We will come back to this inthe next section. The Quebec government should better regulate financial products byadopting provisions that specifically target financial products aimed at students.

A final external factor is the cost of life. The section 8.3 presents the relationship betweenliving expenses and debt load. Generally, higher rents and food costs push up borrowing and debt loads. These two categories are each responsible for a 2% variationin the amount owed. These are usually essential expenditures and thus students often

find themselves at the mercy of rental markets and food prices. They do cut nonessentialexpenditures as a way of reducing debt loads. Students who receive SFA spend a bit lesson transport and rely on methods of transport that are free or less expensive.

Many factors that students do not control directly influence debt levels. Onlygovernment action can have a real influence on student debt, whether it in relation tothe cost of tuition, the level of indebtedness, the supply of credit, or living costs.




10.1.6. Choices after the first degree

Before and during university, student debt has a multifaceted impact, influencing somechoices and being affected by other choices. We tend, wrongly, to believe that studentdebt load has no impact and that graduates pay off their loans quickly. However, aftergraduation, debt loads have major effects on the pursuit of graduate studies, loan

reimbursement, and a new graduate’s finances.A high debt load often entails abandoning plans to undertake graduate studies.Students who go to graduate school carry less debt than those who leave school to enterthe workforce (supra section 3.4.4). All else being equal, the higher the debt, the lowerthe probability of enrolling in graduate school. It is clear that increasing student debtload in a context where graduate level specialization is becoming a necessity is acounterproductive policy.

The reimbursement of debt after school is often difficult (supra section 3.5.1). It isdetermined mainly by future revenue although the size of the debt also plays a role. Thesize of the debt seems to have an impact on the cost of financial aid programs. A loan inQuebec costs about 17¢ per dollar, a Canadian loan costs the State between 30¢ to 40¢

per dollar. In Canada, 22% of graduates owing $10 000 to $24 999 had difficulty makingpayments, while 43% of those owing more than $25 000 had the same difficulty.

Student debt loads slow down economic growth by reducing the financial capacity of new graduates (supra section 3.5.2). Young university graduates generally have thesame borrowing power. However, if they have student loans, it becomes more difficultfor them to borrow money for a house or a car. Student borrowers have assets that arean average of $40 000 lower than those who did not take out a loan.

10.2. Characteristics of different loans

The three major categories of loans (public loans, private loans, and loans from family orfriends) that we have identified are very similar. However, they do have a few uniquecharacteristics that we shall now explore.Public loans have many advantages that make them more attractive: they aresubsidized, their interest rate is lower, they only have to be reimbursed once schoolingis complete, and their reimbursement is facilitated by certain SFA programs ( supra section 2.2). In addition, they are often accompanied by bursaries, which are a veryeffective form of student aid. They do have certain limitations. They decline in relationto increases in family income, which means that many students who have financial needare not covered by the program. In addition, SFA is not well adapted to nontraditionalacademic career paths (FEUQ, 2010, p. 122). The program creates a heavy debt load anddoes not cover the cost of all needs. As such, SFA debt is a predictor of debt from othersources. They really are subsistence loans, since students receiving SFA must tighten

their belts and, often, borrow elsewhere.Private loans are the second most important source of debt. Their terms are lessfavorable than SFA (supra section 2.3) since their interest rates are higher and interestmust be paid during university. Contrary to what we might think, the rate of privatedebt declines in relation to parental revenue. The amounts borrowed do not follow thispattern. The supply of credit and unmet needs seem to explain why students indisciplines that are considered economically practical take out more of these loans, sinceavoidance strategies are more difficult to maintain. Generally speaking, this is also




subsistence debt but one that is not about to replace SFA. This is the debt taken on bystudents who work more during their education and whose gross income levels arehigher. This is a worrying trend that encourages drop out (infra section 7.2), particularly because it targets consumer debt loads. This is a form of credit that is not sensitive toincreasing the time it takes to graduate. The amount of debt stays stable regardless of whether more time has been spent to finish the degree. In addition, financial institutionsare about to be more strictly regulated by the Quebec government. In the next section,we will propose regulations that specifically address student debt loads.

Loans from family or friends resemble private loans. The one difference is that they aremuch larger when they are the only source of debt. We believe that this reveals animportant characteristic of these debts: they are the last resort for students who do notwant to or cannot borrow from other sources but who still have financial needs to bemet.

10.3. Student debt load: A model

The following figures and tables summarize the general model presented in sections

10.1 to 10.6. Generally, we can see that student debt load has various undesirable effects.It encourages selecting students based on their ability to pay rather than on their talentsand it acts regressively towards the least privileged students. In addition, it has anegative impact on academic success. A policy of high student loans can provide thecapital necessary to ensure wide access to university education but it does not guaranteethe successful completion of a course of study. Even after university, student debt loadsconsiderably limit the financial leeway of new graduates. In summary, putting studentsinto debt is a game that is not worth the candle. The next section presents a series of recommendations that aim to concretely reduce the impact of student debt load onQuebec students.




Figure 10-1: Modelling of the six key factors of student debt.

Figure 10-2: Classification of key factors in relation to the choice to take on debt and the impact of debt

1.Familybackgroud

Socialrelationshipwith

credit

Familyincome

Parentalhome

Previouseducationlevel

2.Individualcharacteristics

Age

Placeofresidence

Beingaparentornot

Paidworkanddebtload

Recreational

expenses

Psychologicalimpact

3.Credithistory

Levelofaccumulated

debt

Pastexperiences

Financialmanagement

4.Academicchoices

enrollment,

durationofstudies,andperseverance

Fieldofstudy

Meritscholarships

5.Externalfactors

Costofstudying

Mixofloans/bursaries

Supplyofcredit

Livingexpenses

6.Choicesaftertheirst

degree

Pursuitofgraduatestudies

Loanreimbursementandbankruptcy

Anewgraduate'sNinances




Thechoicetotakeondebtandtbelevelofindebtedness

1.Familybackground

2.Individualcharacteristics Age,residence,beingaparentor

not,paidwork.

3.Credithistory

4.Academicchoices

5.Externalfactors

Impactofdebtload

2.Individualcharacteristics

Age,residence,beingaparentornot,paidwork,recreational

expenses,psychologicalimpact.

4.Academicchoices

6.ChoicesaftertheNirstdegree



Table 10-1: Description of the relation between debt load, the six key factors, and studies on academic career paths

Keyfactor Element Impactonaccess Impactonthetotalrate

ofindebtedness

Impactonthetotal

amountowed

Impactduringandafter

university

1.Family

background

Socialrelationship

tocredit

Attitudesthataremoretolerantdiminishdebtaversion

Familyincome Decreaseswhenincome

increases

Responsiblefor3%of

variance

Absenceof

parental

contribution

1.5timeshigher 1.5timeshigher Possibleimpacton

defaults

Parentalhome Theneedtomovecan

discourageordelay

academicplans

1.2timeshigherwhen

thereisaneedtomoveto

anotherregion

1.12timeshigherwhen

thereisaneedtomoveto

anotherregion

Previous

educationlevel

1.4timeshigheriffirst

generation

1.15timeshigher

2.Individual

characteristics

Age Theneedtogointodebt

increasestheprobabilityofdelayingenrollmentby

1.5to1.8times

Therateincreaseswith

age

Responsiblefor5%of

variance

Placeofresidence 1.7timeshigherforthose

whodon’tlivewiththeir

parents

1.7timeshigherforthose

whodon’tlivewiththeir

parents

Beingaparentor

not

1.4timeshigherfor

student-parents

1.5timeshigherfor

student-parents

Paidworkand

debtload

Paidworkisusedasastrategyto

avoiddebt

Recreational

expensesand

otherexpenses

Expensescutinorderto

limitdebtload

Psychological

impact

Debtloadsincrease

financialstress



Student indebtedness : Comprehensive studyFédération étudiante universitaire du Québec - 2011

133


ofindebtedness

Impactonthetotal

amountowed


university

3.Credithistory Levelof

accumulateddebt

Beingindebtleadsto

moredebt:apossible

studentdebtspiral

Pastexperiences Rendersdebtadverse Littleexperienceandpossiblemisunderstandingofdebt.

However,itamajorsourceoffinancialinformationfor

students

Financial

management

Studentfinancialmanagementisoftenlackingduetoa

lackoffinancialtraining,whichincreasestheir

vulnerability

4.Academic

choices

Enrollment,

durationof

studies,and

perseverance

$1000moreinloans=

1.6%fewerstudentsfrom

lowersocioeconomic

backgrounds

Takingmoretimeto

completeadegree

increasesby1.2timesthe

probabilityofhavingtogo

intodebt.

Takingmoretimeto

completeadegree

increasesthelevelofdebt

by1.2times.

InCanada,financial

considerationsarethe

mainreasonfordropping

outofschool

Fieldofstudy Choiceofdisciplinebased

oneconomicprofitability

Studentsinprofitable

programsaremorelikely

totakeoutprivateloans

Academicsuccess Meritscholarshipsreducedebtloadsatthegraduate

level

5.Externalfactors Costsofstudying Hightuitionfeeslower

accesstouniversity

Asthecostofstudying

goesup,sododebtloads

Mixof

loans/bursaries

Highdebtloadsblock

access

Thegovernmentsetsthe

levelofpublicstudentdebt

Supplyofcredit Supplyofstudentcreditisabundant,attimesdeceiving,

andinsufficientlyregulated,whichcanincreasedebt

loads

Livingexpenses Foodandrentareeach

responsiblefora2%

varianceintheamountof

debt




134


ofindebtedness

Impactonthetotal

amountowed


university

6.Choicesafter

thefirstdegree

Pursuitof

graduatestudies

Highdebtloads

discouragemanystudents

frompursuinggraduate

studies(1.4to1.6times

dependingonthesizeof

thedebt)

Loan

reimbursement

andbankruptcy

Asstudentdebtloads

increasesodoesthecost

ofstudentfinancialaid

programsanddefault

rates

Anewgraduate’s

finances

Graduateswhoborrowed

moneyhaveassetsworth

$40000less.




135

10.4. Recommendations

Various measures can be put into place to concretely reduce student debt loads. Theycan be filed under four general categories: policy regarding university tuition fees, thestudent financial aid program, the financing of granting agencies, and the regulation of financial institutions and financial information.

We believe that all these recommendations should be integrated into a complete andcoherent strategy against student debt. A quick fix cannot properly address student debtload since this issue is complex and interlinked. The SFA, OPC [consumer protection bureau], ministère de la justice, financial institutions, and universities all need to agreeon efforts to limit student debt load.

1st Recommendation

That the government of Quebec develop and implement a strategy to fight againststudent indebtedness that puts in place: strategy to address student debt load thatincludes:

A tuition fee freeze as of 2012 accompanied by a better regulation of ancillary fees;

Improvements to loans and bursaries and merit grants from granting agencies;

A better regulation of financial institutions;

Communication mechanisms to improve the financial skills of youth.

10.4.1. Freeze Tuition Rates

In its last budget, the Quebec government decided to raise university tuition fees by$325 per year over five years, thus bringing the cost of one year’s tuition to $4700 by2017.

Figure-3: Student tuition fee rates from 1994 to 2017 (projected)

Currently, tuition fees are the same among institutions and between disciplines and thusincreased student costs are synonymous with greater student debt loads (infra section

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136

8.2). Without a doubt, this new policy will create higher student debt loads despitemaintaining the maximum loan limit (this will be discussed further on). The FEUQ haspreviously investigated the impact of higher tuition fees on various aspects of studentlife. It is clear that students do not have the ability to pay. The Quebec governmentshould reconsider its decision, cancel the tuition fee increase, and prioritize a tuition ratefreeze.

2nd Recommendation

That the Quebec government renounce tuition fee increases announced in the 2011-2012Budget.

The main reason for variations in student fees among educational institutions relates tomandatory institutional fees. As we can see in the following graph, anglophoneinstitutions and the HEC charge the highest mandatory institutional fees.

Figure -4: Mandatory undergraduate institutional fees by university (2010-2011)

Source : FEUQ, 2011

A new tuition fee freeze must include a strict policy regulating mandatory institutionalfees. University administrations have shown time and again that MIO levels should besupervised by the Quebec government. Regulations currently exist, but universities can bypass them in various ways and have done so frequently in the past. A new umbrella

act would be the best way to limit MIO increases.3rd Recommendation

That the National Assembly of Quebec adopt a law to regulate the mandatoryinstitutional fees required by university institutions (as well as their components) andstipulate that such fees cannot be imposed unless the nature, amount and modalities of these fees are the object of an agreement between the institution and the recognizedstudent association as representatives of the students concerned. (CAU-643).

0 200 400 600 800 1000 1200

UQTR

ETS

UQAC

UQAR

UQAT

UQO

UQAM

Sherbrooke

Polytechnique

Montréal

Laval

Concordia

Bishop's

HEC

McGill




137

10.4.2. Loans and bursaries adapted to student needs.

Addressing student debt loads requires an effective and generous loans and bursariesscheme. The Quebec government has various tools within reach to intervene here. Wenote five of them: the loan limit, the level of allowable expenses, parental contribution,student financial aid, and bankruptcy.

In order to ensure efficiency, we should rely mainly on bursaries, the most effectiveform of aid. Thus, the loan limit must be maintained at its current level. This would bethe first and most direct tool that the government can and should use to act.

4th Recommendation

That the maximum loan limit of student financial assistance not be increased.

Quebec claims that its policy will not increase student debt loads. However, thegovernment continues to provide a special allowance to students who only receiveloans, and who, thus, increase their debt load. Currently, more than a third of recipientssee their student debt load increase each year. This is unacceptable. If our aim is to limitstudent debt, we should simply convert the special allowance into a bursary.

5th Recommendation

That the special allowance covering the increase of tuition fees be paid out in the form of a bursary to all recipients without exception, and that it not lead to any increase inindebtedness.

The amount of aid provided to students is insufficient. For example, as students spendmore on living expenses, they must also borrow more (supra section 8). This is probablythe reason that students who borrow from SFA often must also borrow from other

sources in order to finish their year (supra section 5). These students, who already havegreater debt loads and various financial difficulties, must also make do with a programthat is becoming more and more obsolete in terms of the standard of living that it canensure.

By not indexing allowable expenses, the Quebec government is widening the gap between the loans and bursaries program and reality. This will probably increase theneed for private loans among program recipients. The situation needs to be addressed by increasing and indexing the level of allowable expenses.

6th Recommendation

That Student Financial Assistance increase the amount of allowable expenses for

recipients of student financial assistance, notably through an improvement of theamounts for living expenses and transportation expenses for students that do not haveaccess to public transit. Transportation expenses for non-residents and Internet expensesmust also be included in allowable expenses.

7th Recommendation

That the Ministry of Education, Leisure and Sports introduce an automatic annualindexation mechanism for all allowable expenses in the calculation of Student Financial




139

10.4.4. Better regulation of financial institutions

The Quebec government announced its intention to table Bill 24, which targets theexcessive consumer debt loads, in the National Assembly. This bill includes numerousmeasures, three of which are of particular interest:

Ø False representation to consumers that credit may improve their financial

situation is to be prohibited.Ø Granting of a higher credit limit than that requested by the consumer is to be

prohibited.

Ø Minimum payments on outstanding credit card balances are to be equal to acertain percentage of that balance. This percentage will progressively increaseuntil it reaches 5%.

We think these measures are valid and we believe that the FEUQ should support themwhile proposing other guidelines. Private student loans are a lot less advantageous tostudents than public loans. The Quebec government considerably subsidizes financialinstitutions in order to ensure the operation of loans and bursaries. The government

takes on responsibility of defaulted loans and, in some cases, subsidizes interest. Wethink that, taking this into consideration, the Quebec government should ask more of financial institutions.

12th Recommendation

That the FEUQ support the provisions of bill 24 aiming at limiting the over-indebtedness of consumers.

In many cases, the promotional practices of financial institutions veer rather close tofalse representation. Peace of mind and the innocuousness of credit are two majorselling points for student lines of credit. This idyllic vision is in direct conflict with themajor financial difficulties students may suffer due to credit.

13th RecommendationThat the government of Quebec forbid false representation in regard to studentindebtedness according to which credit can allow one to go through university studiessheltered from financial troubles and on the future profitability of studies.

Many elements of student lines of credit are unclear. This is particularly true for thosethat target certain areas of study. It is difficult to determine what happens when aprogram of study is dropped or changed. Those provisions should be clarified.

14th Recommendation

That the government of Quebec impose on financial institutions the duty of clarifyingfinancial products offered directly to students, among others, by stating clearly the

consequences of changing program or dropping out on the repayment of the debt.Loan limits offered by financial institutions are much higher than that which is offered by student financial aid. Given the risk inherent in undertaking university education,we believe that it is in the interest of institutions and students that the maximum loanamounts offered by financial institutions be lowered. Such a measure would contributeto limiting new graduate debt loads and bankruptcies.




140

15th Recommendation

That financial institutions downwardly assess the maximum loan limits for students.

As we have seen, one of the causes of consumer debt overload is the impression of belonging to a social group that is not your own. We believe that financial institutionsoffering rebates on prestigious credit cards to students in certain specializations are one

source of this problem. Such practices should be prohibited. When students receiverebates or special offers, they should be identified as such. Desjardins and theLaurentian Bank already operate in this manner. To do otherwise is to encouragedetrimental social comparisons.

16th Recommendation

That the government of Quebec forbid financial institutions from proposing to studentsdiscounts on financial products that are not clearly or specifically destined for them.

10.4.5. Ensure the distribution of financial information

Financial institutions seem to exploit a lack of financial literacy among students. In

many cases, they do not publicize the loans and bursaries program and, in most cases,the advantages of loans and bursaries are not clearly stated. We believe that financialinstitutions who take part in the loans and bursaries program, on very favourable terms,should be forced to show the terms of the loans offered by loans and bursaries as well asthe advantages of those loans over conventional ones.

17th Recommendation

That the government of Quebec impose on financial institutions the obligation of presenting on their Internet sites and informational folders presenting their studentproducts the student financial assistance program and its modalities.

Young Quebeckers, and thus students, lack financial literacy. We believe that is

necessary to put and end to this situation. A good way to proceed would be to mandatethat the Office de la protection du consommateur [consumer protection bureau] producestudent targeted informational material on the reality of private student loans.

18th Recommendation

That the Office de la protection du consommateur , in collaboration with student financialassistance and university institutions, develop and distribute information material onstudent indebtedness, with an emphasis on private indebtedness and credit targetedtoward students.




141

11. General Conclusion

This study aimed to quantify the situation of student debt and evaluate its key factorsand impact in order to issue recommendations. We undertook this study by definingstudent debt load as all debt accrued for professional or postsecondary education,regardless of the issuer, that allows a student to pay educational and living expenses,excluding mortgages and car purchases. The three major loan issuers are thegovernment, financial institutions, and family. We then examined the characteristics of two major student loan providers. Government loans have a subsidized interest rate andvarious programs are offered to facilitate loan reimbursement. These loans often comewith substantial bursaries and the maximum loan limit is regulated. However the loanlimit can be bypassed by a special allowance that increases the debt load for those whoonly receive loans, about a third of recipients. In addition, the assistance offered doesnot sufficiently cover student needs, thus pushing more and more students towardsprivate loans.

Private loans are less advantageous to students since their interest rates are higher andthe interest is charged immediately. This generates higher costs and higher potentialdebt loads. Many of the practices put in place by financial institutions ought to bechallenged. This is why we have recommended a series of measures to tightenlegislative control of financial institutions.

Next, we examined the scientific literature on student debt load. Access to private creditis increasing among youth and students. This increase is combined with insufficientfinancial literacy. Too many young people rely on their previous experiences to dictatetheir behaviour towards credit. In addition, student debt load has a major impact on allaspects of a student’s academic career path. It delays or blocks access to education formany students, is a reason for dropping out, and is a considerable obstacle to success.Finally, according to the research, debt loads lead to financial difficulties and reducestudent financial capacity.

We added to this review of the literature, an exhaustive examination of the key factorsand impact of student debt load. We came away with six major categories.

Family background is a main factor in student debt load. Family income and the familycapacity to contribute financially to tuition play an important role for many in the rateand level of indebtedness. In addition, certain sociological aspects play a role, such asthe attitude towards credit and the level of education achieved by the student’s parents.The place of residence also has an effect. A student who must leave the parental homefaces higher expenses than one who is able to stay at home.

Individual characteristics can go both ways with regard to debt. Being older, leaving thefamily residence, and being a parent are predictors of higher debt loads. Conversely,

there are various debt avoidance strategies including doing more paid work duringschool and reducing nonessential expenses.

Credit history tends to determine the level of student indebtedness. Accumulated debtloads are a bad influence that can lead to a debt spiral. The more a student borrows, themore likely that student is to borrow from different sources, thereby accumulating largedebts from several sources. In the end, the same student is left with a level of debt thathe or she is unable to reimburse. This situation is made worse by low student financial




142

literacy and financial institutions whose supply of credit encourage students to take onmore debt.

Academic choices both influence and are influenced by levels of indebtedness.Enrollment, the duration of studies, and perseverance are all negatively affected bystudent debt or the prospect of it. The field of study may also be affected by debt load,

since disciplines considered to be more financially practical may be favoured over thosethat carry greater risk. However, being enrolled in a more practical discipline tends toincrease debt from private and familial sources. This may be due to being less able towork during school, the higher cost of required materials, and an aggressivelymarketed, and often attractive, supply of credit. Finally, a strategy unique to graduatestudents is to receive merit scholarships. This can only occur if a student is judgedsufficiently worthy by granting agencies.

Many external factors influence student debt load. The cost of studying has a directimpact on debt load. Our study shows that increasing the cost of tuition also increasesthe rate and level of indebtedness. Governmental choices relating to financial assistanceand the relationship between loans and bursaries also play decisive roles. The generally

under-regulated supply of financial products directly marketed to students is oftendeceptive. Credit is presented as an easy way to get an education without financialproblems, while the reality is very different. Stricter regulation is necessary. A finalfactor outside of student control is the cost of living. Rent and food costs are difficult tocut. The increase in food costs due to the global food crisis and the constant increase inrents risk pushing students into more debt. Strategies to cut rent costs such as roomingwith other students or living with one’s parents are already frequently used.

Debt loads continue to make their effects felt after the completion of a first degree. Beinggreatly in debt can jeopardize the pursuit of graduate studies. A new graduate’sfinances are usually in worse shape if that graduate had to borrow for university. Inaddition, bankruptcy is always a possibility even though federal law prohibits declaring

bankruptcy on public loans for seven years after graduation.This analysis of debt load leads us to present five main sets of recommendations tostabilize the price of tuition, increase student financial assistance and merit scholarships, better regulate the student loan market, and ensure better dissemination of financialinformation.

In the end, we believe that a policy of access to university that is based on high tuitionrates and increasing private debt is contrary to its own principles. Students from lowersocioeconomic backgrounds are hit hardest by debt, which affects their ability to pursuetheir studies free from financial worry. Thankfully, the current situation in Quebec is better than that of other Canadian provinces. Unfortunately, it is deteriorating each andevery year, as tuition fee increases accumulate and student financial assistance lags

behind. Current government complacency is jeopardizing Quebec’s future. If majorremedies are not brought forth soon, Quebec’s future as well as its capacity to continueto develop with an aging population will be at risk. The Quebec government must putin place a real strategy addressing student debt load

Scientifically, there is still much left to explore. Student debt load in Quebec is aphenomenon that has not been properly investigated. This first study uses bivariateanalysis, a relatively simple statistical model. Further studies using more complex




143

statistical models would be able to more precisely isolate certain factors. A longitudinalstudy could look at the evolution of student debt over the course of studying for adegree.




145

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AFE (2010a). Statistiques, rapport 2008-2009. Québec : Aide financière aux études. 85pages.

AFE (2011a). Prêts et bourses : des réponses à vos questions (2011-2012). Québec : Aidefinancière aux études. 24 pages.

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Assemblée nationale (2011). Projet de loi n. 24 : Loi visant principalement à lutter contre lesurendettement et à moderniser les règles relatives au crédit à la consommation. Québec :Assemblée nationale. 36 pages.

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MELS. (2010). Indicateurs de l’éducation – édition 2010. MELS : Direction générale despolitiques, de la recherche et de la planification stratégique. 134 pages.

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Davies, Emma et Stephen E.G. Lea. (1995). « Student attitudes to student debt ». Journalof economic psychology. Vol. 16. P. 663-679.

Flint, Thomas A. (1997). « Predicting student loan defaults ». The journal of highereducation. Vol. 68, no. 3. p. 322-354

Greene, Laura L. (1989) « An economic analysis of student loan default ». Educationalevaluation and policy analysis. Vol. 11. No. 1. p 61-68

Kim, Dongbin. (2007). « The effect of loans on students’ degree attainment : differences by student and institutional characteristics ». Harvard educational review. Vol. 77. No. 1,p. 64-127

Lea, Stephen E.G., Paul Webley et Catherine M. Walker. (1995). « Psychological factorsin consumer debt : money management, economic socialization, and credit use ». Journal of economic psychology. Vol 16, p. 681-701.

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Millett, Catherine M. (2003). « How Undergraduate Loan Debt Affects Application andEnrollment in Graduate or First Professional School ». The Journal of Higher Education.Vol. 74, No. 4 (Jul. - Aug., 2003) (pp. 386-427)

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recherche sur les étudiants du niveau collégial et Sondage du Consortium canadien derecherche sur les étudiants du premier cycle universitaire. Montréal : Fondationcanadienne des bourses d’études du millénaire. 30 p.

Scott, Adrian J. « Student debt in the UK : an economic psychological perspective ».University of Bath.

Smith, Margaret (2002). « Le traitement des prêts aux étudiants selon la Loi sur la failliteet l’insolvabilité ». http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/BP/prb0126-f.htm#LE%20PROGRAMME%20CANADIEN%20DE%20PR%C3%8ATS%20AUX%20%C3%89TUDIANTS [Consultée le 31 mai 2011]

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CNCS-FEUQ (2009). Avis sur les besoins financiers des organismes subventionnaires.Montréal : Conseil national des cycles supérieurs de la Fédération étudianteuniversitaire du Québec.

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Montréal : Conseil national des cycles supérieurs de la Fédération étudianteuniversitaire du Québec.

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FEUQ (2010a). Enquête : conditions de vie des étudiants de premier cycle. Montréal :Fédération étudiante universitaire du Québec.

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Howell, David C. Méthodes statistiques en sciences humaines. Bruxelles : Groupe De Boeck.762 pages.

Yaffee, Robert A. (2003). « Common correlation and reliability analysis with SPSS forWindows ». http://www.nyu.edu/its/statistics/docs/correlate.html. [Consultée en juin 2011].




149

Annexe I - Caractéristiques des prêts privés

Tableau I-1 : Offre de cartes de crédits régulières par institution financière

Nom Intérêt Intérêtréduit Fraisannuels? Autres

Institution

financière1

VisaDesjardins(…)

pourétudiants19,4% 11,8%;enoption Non

Servicederéservationde

billets;protection-cellulaire;

assurancevoyagede3jours

Institution

financière2

MasterCard(…)SPC

AIRMILES19,50% 12,90%

35$/anpourintérêt

réduit

Programmeairmiles;rabais

étudiantsSPC

MasterCardBMO

SPCRemises19,50% 12,90%

35$/anpourintérêt

réduitRemiseenespècesde0,5%

Institution

financière3

Visanoire 19,99% ND Non

VisanoireMa

récompense19,99% ND 3,50$/mois

Programmedepointset

d'assurance

Institution

financière4

Nondisponible

Institutionfinancière5

VisaOr(…)Récompenses

19,99% ND Non Programmedepoints

CarteVisaRemiseen

argent19,99% ND Non 1%deremiseenespèces

Signature®(…)

Récompenses®Visa‡19,99% ND Non

Programmedepointset

récompensesRBC

Institution

financière6Visascène

19,99%;

21,99%

pourles

avancesde

fonds

ND Non

Programmedepoints

échangeablescontredela

musique,desfilms,etc.

Visasavoir 1%deremiseenespèces

Institution

financière7 CarteClassique(…)

Visapourétudiants

19,99%;

21,99%

pourlesavancesde

fonds

ND Non

Assuranceaccidentpour

transporteurspublics(100000$)

Institution

financière8

Nondisponible




150

Tableau I-2 : Marges de crédit régulières

Nom Montant Remboursement Tauxd'intérêt

Institution

financière1 Margedecrédit

Avantageétudiant(…)

10000$/anpouruniversitétemps

plein;Maximum40000$1ercycle

ou60000$cyclessupérieurs

5000$tempspartiel

Intérêtsseulementdurantles

études;6moisdedélaiaprèsla

diplomation;10anspour

rembourser(université)

Variabledurantles

études;fixeinférieur

auprêtpersonnel

après

Institution

financière2

Marge-créditAux

étudiants

15000$premièreannée;10000$

pourlesannéessubséquentes

jusqu'à45000$


études;Reportducapitaldurant

12mois

Institution

financière3Margedecrédit

étudiante

5500$/an,20000$/4ansou

3000$/5ans(cyclessupérieurs)




rembourser

Nondisponible

Institution

financière4

Fondsderoulement

étudiant

Non-spécifié Intérêtsseulementdurantles



rembourser

Nondisponible

Institution

financière5

MargedeCrédit(…)

pourétudiants

5000$/an1ercycle;10000$/an

cyclessupérieurs


études;Reportducapitaldurant

12mois

Préférentiel+1%

Institution

financière6LignedecréditScotia

pourétudiants

Jusqu'à10000$/an;maximum

40000$au1ercycle;maximum

20000$cyclessupérieurs;la

moitiéàtempspartiel

Tauxdebase+2%

(enfonctiondu

dossier)

Institution

financière7

Margedecrédit

études

Jusqu'à15000$/an,40000$pour

leprogramme,pasdelimite

annuelleau3emecycle



diplomation(6moispourune

sortiesansdiplôme);jusqu'à20

anspourrembourser

Variableselonletaux

préférentiel[…]

Margedecrédit

ressource-toîtCIBC

Réductiondutaux

d'intérêtenmettant

engarantiesa

propriétéoucellede

sesparents

Institution

financière8 Lignedecrédit

étudiant…

10000$/an,maximum40000$



diplomation

Nondisponible

Lignedecrédit

étudiant(…)pour

professionnelset

diplômés

8000$/anpendantdeuxans:

maximum48000$avecladettedu

1ercycle(pourcyclessupérieurs)




151

Tableau I-3 : Offre de carte de crédit ciblée par institution financière

Domaines IntérêtIntérêt

réduitFraisannuels Autres

Institution

financière1

Nondisponible

Institution

financière2

Nondisponible

Institution

financière3

Nondisponible

Institution

financière4

Santésaufmédecine

19,50% ND

125$/anaprès2

ansCartePlatine;Programmedepoints

Droitetnotariat 75$/anaprès2ansCarteor;Programmederécompenses

encourageantl'utilisationdelacarte

Génie125$/anaprès2

ans

CartePlatine;Programmederécompenses


Infirmier125$/anaprès2

ans

CartePlatine;Programmederécompenses


HECMontréal 75$/anaprès2ansCarteor;Programmederécompenses


Comptabilité 75$/anaprès2ansCarteor;Programmederécompenses


Institution

financière5

Médecineet

optométrie19,99% ND Non

CarteVISA*Or(…)Récompenses;Programme

depointsRBCrécompense

Institution

financière6Professionslibérales

19,99%;

21,99%

pourles

avancesde

fonds

ND 39$/anVisaMomentum(…;)Remisesenespèces(2%

pourachatsdesubsistance,sinon1%)

ND NonVISAor(…)sansfraisannuels;Bonisliésaux

voyages

Institution

financière7

Nondisponible

Institution

financière8

Nondisponible




152

Tableau I-4 : Marges de crédit offertes par institution financière selon le domaine d'étude

Domaine Montant Remboursement Tauxd'intérêt

Institution

financière1

médecine,médecinedentaire,

optométrieetpharmacie;

Maximumnon-spécifié,

"élevé"

Intérêtsseulementdurant

lesétudes;reportdu

capitaljusqu'à6mois

aprèslafindesétudes

"Tauxavantageux"

durantlesétudes;fixe

ouvariableaprèsles

étudesendessousdu

prêtpersonnel

actuariat,droit,génieet

pharmacologie;

chiropratique,médecinevétérinaire,

podiatrieetsciencescomptables.

Institution

financière2

Médecine 200000$

maximum/50000$par

an


lesétudes;12moisde

délaiaprèsladiplomation

Nondisponible

Dentisterie 200000$

maximum/50000$par

an

Chiropractie 80000$

maximum/20000$par

an

Optométrie

Droit

Comptabilité

Pharmacie

Médecinevéterinaire

MBA 50000$

maximum/10000$par

anInstitution

financière3

Nondisponible

Institution

financière4

Santé 120000$saufmédecine

etmédecinedentaire

(200000$)


lesétudes;12moisde


Base(2,50%)

Droitetnotariat 7000$/anpourquatre

ans+7000$pourdes

étudesau2ecycle.

Maximum35000$

Réduitde0,50%

(4,75%annuelau1er

mars2011)

Génie Non-spécifié Base+0,50%(3%au

1ermars2010)

Infirmier 5500$/anpour4ans+

6000$pour2ecycle:

25000$àterme

Base+0,75%(3,25%

au1ermars2010)

HECMontréal 7000$/anpourquatreans+7000$pourdes

étudesau2ecycle.

Maximum35000$

Réduitde0,50%(4,75%annuelau1er

mars2011)

Comptabilité

Institution

financière5

optométrie,médecinevétérinaire,

pharmacie,podiatrie,sciences

infirmières,chiropractie,droit,génie,

ergothérapie,physiothérapie,

MBA/EMBAetcomptabilité

De40000$à150000$

maximumselonle

dossier


lesétudes;12moisde


Tauxpréférentiel+1%

Médecine,dentisterie 200000$maximum,

sansrestrictionsurle

montantannuel


lesétudes;12moisde


Tauxpréférentiel+1%

Institution

financière6

MBA 40000$maximum Intérêtsseulementdurant

lesétudes;12moisde


Nondisponible

Institution

financière7

Médecine/dentisterie 200000$maximum Intérêtsseulementdurant

lesétudes;12moisdedélaiaprèsladiplomation

(6moispourunesortie

sansdiplôme);jusqu'à20

anspourrembourser

Variableselonletaux

préférentiel(…) Médecinenaturopathique 140000$maximumMédecinevétérinaire 125000$maximum

Optométrie,pharmacie,,

comptabilitéouchiropratique

80000$maximum

MBAouMBApourcadres 70000$maximum

Sciencesinfirmièresoupodiatrie 55000$maximum

Institution

financière8

Chiropratique 62000$maximum Intérêtsseulementdurant

lesétudes;12moisde


Nondisponible

Dentisterie 20000$maximum;

62000$lapremière

année




153

Droit 80000$pour3ans

MBA 80000$maximum

Médecine 20000$maximum;

62000$lapremière

année

Optométrie,Pharmacie,Médecine

vétérinaire

80000$maximum




154

Appendice I - Code SPSS – premier cycle

Création de nouvelles variables

**************************************************************CRÉATEUR:[email protected]

*Datededernièremiseàjour:21juillet2011**Cefichiercomprendl'entièretédesvariablescrééesdansle*cadreduprojetderecherchesurl'endettementétudiant*Normalement,exécutertoutlefichiersuffitàrecréer*l'entièretédesvariablesutilisées.**Lefichierrenommelesvariablespourlesrendrelisibles.**************************************************************Créationdevariables:residence,recodagedek75_m1(résidenceprincipale).*1=chezsesparents;2=autonome;sinonmanquante.

recodek75_m1(7=1)(1thru6=2)(8=8)(9=9)(sysmis=sysmis)intoresidence.VARIABLELABELSresidence'Lieuderésidencedel''étudiant.Recodagedek75_m1'.VALUELABELSresidence1'Habitechezsesparents'2'N''habitepaschezsesparents'8'Autre'9'Jepréfèrenepasrépondre'.MISSINGVALUESresidence(8,9).EXECUTE.*Divisiondesâges.24etmoins=1;25etplus=2;sinonmanquante.recodeq76(lothru24=1)(25thru98=2)(99=99)INTOageMediane.VARIABLELABELSageMediane'Âgediviséselonlamédiane.Recodagedeq76'.VALUELABELSageMediane1'24ansetmoins'2'25ansetplus'99'Jepréfèrenepasrépondre'.execute.*Recodagedelavariableâgeq76pourregrouperlesvaleursextrèmes.




156

*2=65000$etplus.*Sinon,valeurmanquante.computerevParentsMediane=99.ifq78<=9revParentsMediane=1.ifq78>9&q78<98revParentsMediane=2.ifq78=98revParentsMediane=8.ifq78=99revParentsMediane=9.EXECUTE.VARIABLELABELSrevParentsMediane'Revenuparentaldiviséselonlamédiane.Recodagedeq78.'.VALUELABELSrevParentsMediane1'Moinsde65000$'2'65000$etplus.'8'Nesaispas'9'Jepréfèrenepasrépondre'.EXECUTE.*Recodagedelavariableq78enquartilesderevenuparental.RECODEq78(1thru6=1)(7thru9=2)(10thru13=3)(14thru17=4)(98=8)(99=9)intoq78quartile.VARIABLELABELSq78quartileRevenuparentaldiviséenquartiles.VALUELABELSq78quartile1'Moinsde39999$'2'40000$à69999$'3'70000$à124999$'4'125000$etplus'8'Nesaispas'9'Jepréfèrenepasrépondre'.MISSINGVALUESq78quartile(8,9).EXECUTE.*CréationdelavariableÉtudiantdepremièregénération.*Onconsidèrecommeétudiantdepremièregénération(EPG)unétudiantdontaucundesdeuxparentsn'aunescolaritéuniversitaire.*1=EPG.*2=non-EPG.*3=nesaitpas.*Sinon,valeurmanquante.computeEPG=99.if(q79a>=1&q79a<=3)|(q79b>=1&q79b<=3)EPG=1.if(q79a>=4&q79a<=5)|(q79b>=4&q79b<=5)EPG=2.if(q79a=8)|(q79b=8)EPG=3.if(q79a=9)|(q79b=9)EPG=9.if(q79a=$Sysmis)|(q79b=$Sysmis)EPG=$sysmis.execute.VARIABLELABELSEPG'Étudiantdepremièregénération,dérivéedeq79aetq79b'.VALUE LABELS EPG 1 'Étudiant de première génération' 2 'Étudiant de deuxièmegénérationouplus'3'Nesaitpas'9'Jepréfèrenepasrépondre'.MISSINGVALUESEPG(39).execute.*CréationdelavariabledureeBaccetrecodagedecelle-ci.COMPUTEdureeBacc=q7B-q8b.RECODEdureeBacc(20thruHI=sysmis)(lothru0=sysmis).




157

EXECUTE.*RecodagededureeBaccpourarrêterà6ansRECODE dureeBacc (1 = 1 ) (2=2) (3=3) (4=4) (5=5) (6 thru HI = 6) intodureeBaccTronquee.VARIABLELABELSdureeBaccTronquee'Duréedudiplôme,tronquéeà6ans'.VALUELABELSdureeBaccTronquee6'6ansouplus'.EXECUTE.*Créationd'unenouvellevariablerentabiliteDiplomequiestunrecodagedudomained'études(q9).RECODEq9(1,3,6,8=1)(2,4,5,7,9=2)(10=3)(11=4)(96=8)(99=9)intorentabiliteDiplome.VARIABLELABELSrentabiliteDiplome'Recodagedeq9endomainesàrentabilitééconomiqueforteetfaible'.VALUELABELSrentabiliteDiplome1'Faiblerentabilité'2'Forterentabilité'3'Étudesplurisectorielles'4'Noninscrit'8'Nesaispas/étudesplurisectorielles'9'Jepréfèrenepasrépondre'.MISSINGVALUESrentabiliteDiplome(3thru9).EXECUTE.*********************************************************************************MANIPULATIONSDESDONNÉESSURL'ENDETTEMENTÉTUDIANT*****************************************************************************************************Conversiondesvariablesq43aàq43denformatbinaireoù0=nonet1=ouiet*créationdeq43bc.*.*AFE.RECODEq43a(1thruhi=1)(0=0)(sysmis=sysmis)intoq43aTaux.VARIABLELABELSq43aTaux'Présenceouabsenced''unedetteàl''AFE:projectiond''icilafindesétudesdepremiercycle'.




158

VALUELABELSq43aTaux0'Non'1'Oui'.EXECUTE.*Endettementprivé.*Créationdeq43bcquiestlasommedeq43betq43c.COMPUTEq43bc=sum(q43b,q43c).VARIABLELABELSq43bc'Présenced''endettementprivé,avec0.Sommedeq43betq43c'.EXECUTE.*Recodagedeq43bc.RECODEq43bc(1thruhi=1)(0=0)(sysmis=sysmis)intoq43bcTaux.VARIABLELABELSq43bcTaux'Présenceouabsenced''unedetteàuneinstitutionfinancière:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq43bcTaux0'Non'1'Oui'.EXECUTE.*Prêtfamilial.RECODEq43d(1thruhi=1)(0=0)(sysmis=sysmis)intoq43dTaux.VARIABLELABELSq43dTaux'Présenceouabsenced''unedetteauprèsdelafamilleoud''amis:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq43dTaux0'Non'1'Oui'.EXECUTE.*Présenceouabsencededette.COMPUTEq43=sum(q43a,q43b,q43c,q43d).VARIABLELABELSq43'Dettetotale.Sommedeq43a,q43b,q43cetq43d'.MISSINGVALUESq43(0).EXECUTE.




159

RECODEq43(1thruhi=1)(0=0)(sysmis=sysmis)intoq43Taux.VARIABLELABELSq43Taux'Présenceouabsenced''unedette:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq43Taux0'Non'1'Oui'.EXECUTE.*********************************************************************Mêmemanègequeplustôt,maisenutilisantl'endettementactuel.*********************************************************************RECODEq42a(1thruhi=1)(0=0)(sysmis=sysmis)intoq42aTaux.VARIABLELABELSq42aTaux'Présenceouabsenced''unedetteàl''AFE:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq42aTaux0'Non'1'Oui'.EXECUTE.*Créationdeq43bcquiestlasommedeq43betq43c.COMPUTEq42bc=sum(q42b,q42c).VARIABLELABELSq42bc'Présenced''endettementprivé,avec0.Sommedeq42betq42c'.EXECUTE.RECODEq42bc(1thruhi=1)(0=0)(sysmis=sysmis)intoq42bcTaux.VARIABLELABELSq42bcTaux'Présenceouabsenced''unedetteàuneinstitutionfinancière:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq42bcTaux




160

0'Non'1'Oui'.EXECUTE.*Prêtfamilial.RECODEq42d(1thruhi=1)(0=0)(sysmis=sysmis)intoq42dTaux.VARIABLELABELSq42dTaux'Présenceouabsenced''unedetteauprèsdelafamilleoud''amis:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq42dTaux0'Non'1'Oui'.EXECUTE.COMPUTEq42aBIS=q42a.MISSINGVALUESq42aBIS(0,50001thru99999999).VARIABLELABELSq42aBIS'Detteactuelleàl''AFE'.EXECUTE.COMPUTEq42bcBIS=sum(q42b,q42c).MISSINGVALUESq42bcBIS(0,50001thru99999999).VARIABLELABELSq42bcBIS'Detteactuelleàuneinstitutionfinancière'.EXECUTE.COMPUTEq42dBIS=q42d.MISSINGVALUESq42dBIS(0,50001thru99999999).VARIABLELABELSq42dBIS'Detteactuelleàlafamilleoulesamis'.EXECUTE.COMPUTEq42BIS=sum(q42a,q42b,q42c,q42d).MISSINGVALUESq42BIS(0,50001thru99999999).VARIABLELABELSq42BIS'Dettetotaleactuelle'.EXECUTE.*Présenceouabsencededette.COMPUTEq42=sum(q42a,q42b,q42c,q42d).VARIABLELABELSq42'Dettetotale.Sommedeq42a,q42b,q42cetq42d'.MISSINGVALUESq42(0).EXECUTE.RECODEq42(1thruhi=1)(0=0)(sysmis=sysmis)intoq42Taux.




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VARIABLELABELSq42Taux'Présenceouabsenced''unedette:projectiond''icilafindesétudesdepremiercycle'.VALUELABELSq42Taux0'Non'1'Oui'.EXECUTE.*nbSrcDettes:créationd'unenouvellevariable.COMPUTEnbSrcDettes=sum(q43aTaux,q43bcTaux,q43dTaux).VARIABLE LABELS nbSrcDettes 'Nombre de sources de dettes différentes. Somme deq43aTaux,q43bcTauxetq43dTaux'.EXECUTE.**nbSrcFinancement:créationd'unenouvellevariable*presenceCF,surlaprésenced'unecontributionfamiliale(parentaleouduconjoint.Néedel'agglomérationdeq23etq26.computepresenceCF=$sysmis.ifq23=1|q26=1presenceCF=1.ifq23=2&q26=2presenceCF=0.ifq23=9|q26=9presenceCF=$sysmis.ifq23=$sysmis|q26=$sysmispresenceCF=$sysmis.VARIABLE LABELS presenceCF 'Présence ou absence d''une contribution familiale.Agglomérationdeq23etq26.'.VALUELABELSpresenceCF1'Présenced''unecontributionfamiliale'0'Absenced''unecontributionfamiliale'9'Jepréfèrenepasrépondre'.MISSINGVALUESpresenceCF(9).execute.*presenceBourses,quiestdérivéedeq15etq19.computepresenceBourses=1.if((q15=3)AND(q19=3))presenceBourses=0.if(q15=9ORq19=9)presenceBourses=$sysmis.EXECUTE.VARIABLE LABELS presenceBourses 'Présence ou absence d''une bourse de mérite ouautre.Agglomérationdeq15etq19.'.VALUELABELSpresenceBourses1'Présenced''uneboursedemériteouautre'0'Absenced''uneboursedemériteouautre'9'Jepréfèrenepasrépondre'.MISSINGVALUESpresenceBourses(9).execute.*presenceTravail,quel'ondérivedeq3237.recodeq3237(sysmis=sysmis)(0=0)(1thru100000,000=1)




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(100001,000thruhi=SYSMIS)intopresenceTravail.VARIABLELABELSpresenceTravail'Présence ouabsenced''un emploirémunéré pour lapériodeàl''étude,dérivéedeq3237'.VALUELABELSpresenceTravail1'Présenced''aumoinsunemploi'0'Sansemploi'.EXECUTE.*Modificationdeq12(présenceouabsenced'AFE)pourdéclarer9(nesaispas)enmanquante.RECODEq12(1=1)(2=0)(9=sysmis)intopresenceAFE.VARIABLELABELSpresenceAFE'RecodagedeQ12pourletraitementdunombredesourcesdefinancement'.VALUELABELSpresenceAFE0'SansAFE'1'AvecAFE'9'Jepréfèrenepasrépondre'.MISSINGVALUESpresenceAFE(9).EXECUTE.* nbSrcFinancement : Compilationdunombre desources definancement. AdditiondepresenceCF, q12, presenceBourses, presenceTravail avec des + pour qu'une variablemanquantefasse"choker"lesystème.COMPUTEnbSrcFinancement=presenceAFE+presenceCF+presenceBourses+presenceTravail.VARIABLELABELSnbSrcFinancement'Nombredesourcesdefinancementd''unétudiant'.EXECUTE.* Travail rémunéréencoursd'étude : nombre d'heures travailléespour lasessionAutomne2009.*Additiondek32c3etk37c3COMPUTEk3237c3=mean(a32c3,b32c3,c32c3,d32c3,e32c3,f32c3,a37c3,b37c3,c37c3,d37c3,e37c3,f37c3).VARIABLELABELSk3237c3'Nombred''heurestravailléesparsemaine,automne2009'.MISSINGVALUESk3237c3(0,71thru9999).EXECUTE.*Valeurpourdiscriminertouslesétudiantsquitravaillentplusde15heuresparsemaineenmêmetempsqueleursétudes.recodek3237c3(sysmis=sysmis)(0=0)(1thru14=1)(15thru70=2)(71thru9999=sysmis)intotravail15h.VARIABLELABELStravail15h'Proportiondesétudiants quitravaillentplus oumoinsque15heures'.




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VALUELABELStravail15h1'Travaille14heuresetmoinsparsemaine'2'Travaille15heuresetplusparsemaine'.MISSINGVALUEStravail15h(0).EXECUTE.*Variablepourdiscriminertouslesétudiantsquitravaillentplusde20heuresparsemaineàl'automne2009.recodek3237c3(sysmis=sysmis)(0=0)(1thru19=1)(20thru70=2)(71thru9999=sysmis)intotravail20h.VARIABLELABELStravail20h'Proportiondesétudiants quitravaillentplus oumoinsquevingtheures'.VALUELABELStravail20h1'Travaille19heuresetmoinsparsemaine'2'Travaille20heuresetplusparsemaine'.MISSINGVALUEStravail20h(0).EXECUTE.* Variable qui détermine si l'étudiant travaillait ou non à l'automne 2009. Unepetiteerreurstatistiquepeuts'insérerduaumodedecalculquiutiliselessysmisdek3237c.*L'approximationestsuffisantepourlesbesoinsdelacause.COMPUTEtravailA09=$sysmis.RECODEk3237c3(sysmis=0)(0=0)(1thru70=1)(71thru9999=sysmis)INTOtravailA09.VARIABLELABELStravailA09'Tauxd''emploi,automne2009'.VALUELABELStravailA090'Sans-emploi'1'Occupaitaumoinsunemploi'.EXECUTE.*Variablequidéterminesil'étudianttravaillaitounonen2009.Unepetiteerreurstatistiquepeuts'insérerduaumodedecalculquiutiliselessysmisdek3237.*L'approximationestsuffisantepourlesbesoinsdelacause.COMPUTEpresenceTravail=$sysmis.RECODEq3237




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(sysmis=0)(0=0)(1thru100000,000=1)(100001,000thruHI=sysmis)INTOpresenceTravail.VARIABLELABELSpresenceTravail'Tauxd''emploi'.VALUELABELSpresenceTravail0'Sans-emploi'1'Occupaitaumoinsunemploi'.EXECUTE.*k16d20bestlasommedesbourses(mériteetstages),soitk16d+k20b.COMPUTEk16b20d=sum(k16d,k20b).VARIABLELABELSk16b20d'k16d20bestlasommedesbourses(mériteetstages),soitk16d+k20b.'.MISSINGVALUESk16b20d(30001toHI).EXECUTE.*lessériesq43*BISmodifientlégèrementq43a-denajoutantunevaleurmanquanteà0.COMPUTEq43aBIS=q43a.MISSINGVALUESq43aBIS(0,50001thru99999999).VARIABLE LABELS q43aBIS 'Dette estimée à la fin des études de premier cycle àl''AFE'.EXECUTE.COMPUTEq43bcBIS=sum(q43b,q43c).MISSINGVALUESq43bcBIS(0,50001thru99999999).VARIABLELABELSq43bcBIS'Detteestiméeàlafindesétudesdepremiercycleàuneinstitutionfinancière'.EXECUTE.COMPUTEq43dBIS=q43d.MISSINGVALUESq43dBIS(0,50001thru99999999).VARIABLELABELS q43dBIS 'Dette estimée à lafin des études depremier cycleà lafamilleoulesamis'.EXECUTE.COMPUTEq43BIS=sum(q43a,q43b,q43c,q43d).MISSINGVALUESq43BIS(0,50001thru99999999).VARIABLELABELSq43BIS'Detteestiméeàlafindesétudesdepremiercycle'.EXECUTE.*Présenceounond'enfantàcharge.RecodagedeQ85B1(âgedel'enfant).RECODEq85b1(sysmis=0)(1thru8=1)(9=9)




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intopresenceEnfant.VARIABLELABELSpresenceEnfant'Présenceou absenced''unenfantàcharge.Recodagedeq85b1'.VALUELABELSpresenceEnfant1'Enfantàcharge'0'Sansenfantàcharge'9'Jepréfèrenepasrépondre'.EXECUTE.* Dépenses selon le périmètre de sources et modes. On compte donc : frais descolarité,fraisafférents,matérielscolaire,loyer,vêtements,nourriture.COMPUTEdepensesESMFPC=sum(k49x,k50x,k53,k54).VARIABLE LABELS depensesESMFPC 'Dépenses totales en matière de frais scolaires,logement,nourritureetvêtements(k49x,k50x,k53,k54'.EXECUTE.*Insertiondesdépensesdetransportetdeloisir.COMPUTEdepensesTotales=sum(k29b,k49x,k50x,k53,k54,k56ax,k56bx,k58x).VARIABLELABELSdepensesTotales'Dépensestotales,incluantletransportetleloisir[k29b,k49x,k50x,k53,k54,k56ax,k56bx,k58x]'.EXECUTE.*Lefinancementtotalcomprendtouteslessourcesdefinancementdesétudiants.COMPUTEfinTotal=sum(q13,q14,k16d,k20b,k24,k27,k28b,q3237).VARIABLELABELSfinTotal'Financementtotal:sommedesprêtsetbourses,desboursesde mérite, des contributions familiales et du travail(q13,q14,k16d,k20b,k24,k27,k28b,q3237)'.EXECUTE.* Pour des raisons que jenecomprends pas, magTotalest très loin des résultatsprésentésdansESMFPC.OnvacréerdeuxMAG:magESMFPCetmagTotal.* Il va falloir revérifier le calcul. Pour l'instant, je vais créer un nouvelindicateur,mag1000.COMPUTEmagESMFPC=finTotal-depensesESMFPC.VARIABLE LABELS magESMFPC 'manque à gagner selon le périmètre de subsistance desourcesetmodespouruneannée'.COMPUTEmagTotal=finTotal-depensesTotales.VARIABLE LABELS magTotal 'manque à gagner total pour une année. finTotal-depensesTotales'.COMPUTEmagAFE=sum(finTotal,-q13,-depensesESMFPC).VARIABLELABELS magAFE 'Manque à gagner totalsans prêtsdel''AFE. finTotal-q13-depensesESMFPC'.*CréationdemagPourcent,utilisepourconnaîtrelenombred'étudiantsensituationdemanqueàgagner.RECODEmagTotal




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(lothru0=1)(1thruhi=0)(sysmis=sysmis)intomagPourcent.VARIABLE LABELS magPourcent 'Recodage de magTotal pour obtenir la présence oul''absencedemanqueàgagner'.VALUELABELSmagPourcent0'Surplus'1'Manqueàgagner'.EXECUTE.*Créationdemag1000,unevariabledemanqueàgagnerquicréeunecatégorieautourdu0quiéliminetouslesmanqueàgagner* ou les surplus de moins de 500$, qui sont probablement des accumulationsd'erreurs.RECODEmagTotal(lothru-1000=2)(-999thru1000=1)(1001thruHI=0)(sysmis=sysmis)INTOmag1000.VARIABLELABELSmag1000'RecodagedemagTotaloùonenlèvelesétudiantsprésentantunmanqueàgagnerouunsurplusde1000$etmoins'.VALUELABELSmag10000'Surplus'1'Entre-999$et1000$'2'Manqueàgagner'.EXECUTE.* Création de annee, qui est un recodage de q8b et estime l'année d'études del'étudiant.*Lavariableestcomptabiliséeenfonctiondel'annéescolaire:ainsi,unétudiantquicommenceenjanvier2008vaêtrerendu,àl'automne2009,àsatroisièmeannée.COMPUTEannee=$sysmis.IFq8b=2009andq8a>=8annee=1.IFq8b=2009andq8a<8annee=2.IFq8b=2008andq8a>=8annee=2.IFq8b=2008andq8a<8annee=3.IFq8b=2007andq8a>=8annee=3.IFq8b=2007andq8a<8annee=4.IFq8b=2006andq8a>=8annee=4.IFq8b=2006andq8a<8annee=5.IFq8b<2006annee=5.IFq8b>2010annee=9.IFq8a>12annee=9.EXECUTE.VARIABLELABELSannee'Annéed''étudedel''étudiant,dérivéedeq8aetq8b.'.VALUE LABELS annee 1 'Première année' 2 'Deuxième année' 3 'Troisième année' 4'Quatrième année' 5 'Cinquième année et plus' 9 'Ne sais pas/Je préfère ne pasrépondre'.




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MISSINGVALUESannee(09).*Regénérationdescasiers.UtilesiSPSSbouffetout!.*Regroupementvisuel.*k24.RECODEk24(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU1000.0=2)(LOTHRU2000.0=3)(LOTHRU 3000.0=4) (LO THRU 4000.0=5) (LO THRU 5000.0=6) (LO THRU 6000.0=7) (LO THRUHI=8)(ELSE=SYSMIS)INTOk24Casiers.IF(VALUE(k24)EQ0.0)k24Casiers=0.0.VARIABLELABELSk24Casiers'Q24*:Q24A+Q24B+Q24C(Regroupéparcasiers)'.FORMATSk24Casiers(F5.0).VALUE LABELS k24Casiers 1 '<= ,00' 2 '1,00 - 1000,00' 3 '1001,00 - 2000,00' 4'2001,00-3000,00'5'3001,00-4000,00'6'4001,00-5000,00'7'5001,00-6000,00'8'6001,00+'.MISSINGVALUESk24Casiers(0.0,50001.0THRU9.9999999E7).VARIABLELEVELk24Casiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k3237c3.RECODE k3237c3(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU5.0=2)(LOTHRU10.0=3)(LOTHRU15.0=4)(LOTHRU20.0=5)(LOTHRU25.0=6)(LOTHRU30.0=7)(LOTHRU35.0=8)(LOTHRU40.0=9)(LOTHRUHI=10)(ELSE=SYSMIS)INTOk3237c3Casiers.IF(VALUE(k3237c3)EQ0.0)k3237c3Casiers=0.0.VARIABLE LABELS k3237c3Casiers "Nombre d'heures travaillées par semaine, automne2009(Regroupéparcasiers)".FORMATSk3237c3Casiers(F5.0).VALUELABELSk3237c3Casiers1'0'2'1,00-5,00'3'6,00-10,00'4'11,00-15,00'5'16,00-20,00'6'21,00-25,00'7'26,00-30,00'8'31,00-35,00'9'36,00-40,00'10'41,00+'.MISSINGVALUESk3237c3Casiers(0.0,71.0THRU9999.0).VARIABLELEVELk3237c3Casiers(ORDINAL).EXECUTE.*Regroupementvisuel.*q3237.RECODEq3237(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU5000.0=2)(LOTHRU10000.0=3)(LO THRU 15000.0=4) (LO THRU 20000.0=5) (LO THRU 25000.0=6) (LO THRU HI=7)(ELSE=SYSMIS)INTOq3237Casiers.VARIABLE LABELS q3237Casiers "Q3237B* : Revenu d'emploi total (Regroupé parcasiers)".FORMATSq3237Casiers(F5.0).VALUE LABELS q3237Casiers 1 '0' 2 '1,00 - 5000,00' 3 '5001,00 - 10000,00' 4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00+'.MISSINGVALUESq3237Casiers(100001.0THRU9.99999999E8).VARIABLELEVELq3237Casiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k16b20d.RECODEk16b20d(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU1000.0=2)(LOTHRU2000.0=3)(LOTHRU3000.0=4)(LOTHRU4000.0=5)(LOTHRU5000.0=6)(LOTHRUHI=7)(ELSE=SYSMIS)INTOk16b20dCasiers.VARIABLELABELSk16b20dCasiers'k16d20bestlasommedesbourses(mériteetstages),soitk16d+k20b.(Regroupéparcasiers)'.FORMATSk16b20dCasiers(F5.0).




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VALUE LABELS k16b20dCasiers 1 '0' 2 '1,00 - 1000,00' 3 '1001,00 - 2000,00' 4'2001,00-3000,00'5'3001,00-4000,00'6'4001,00-5000,00'7'5001,00+'.MISSINGVALUESk16b20dCasiers(30001.0THRUHI).VARIABLELEVELk16b20dCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*finTotal.RECODE finTotal (MISSING=COPY) (LO THRU 0.0=1) (LO THRU 5000.0=2) (LO THRU10000.0=3) (LO THRU 15000.0=4) (LO THRU 20000.0=5) (LO THRU 25000.0=6) (LO THRU30000.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOfinTotalCasiers.VARIABLELABELSfinTotalCasiers'Financementtotal:sommedesprêtsetbourses,desbourses de mérite, des contributions familiales et du travail(q13,q14,k16d,k20b,k24,k27,k28b,q3237)(Regroupéparcasiers)'.FORMATSfinTotalCasiers(F5.0).VALUE LABELS finTotalCasiers 1 '0' 2 '1,00 - 5000,00' 3 '5001,00 - 10000,00' 4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00-30000,00'8'30001,00+'.VARIABLELEVELfinTotalCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*depensesTotales.RECODE depensesTotales(MISSING=COPY)(LOTHRU 0.0=1)(LOTHRU 5000.0=2)(LOTHRU10000.0=3) (LO THRU 15000.0=4) (LO THRU 20000.0=5) (LO THRU 25000.0=6) (LO THRU30000.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOdepensesTotalesCasiers.VARIABLELABELSdepensesTotalesCasiers'Dépensestotales,incluantletransportetle loisir [k29b, k49x, k50x, k53, k54, k56ax, k56bx,k57x, k58x] (Regroupé parcasiers)'.FORMATSdepensesTotalesCasiers(F5.0).VALUELABELSdepensesTotalesCasiers1'0'2'1,00-5000,00'3'5001,00-10000,00'4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00-30000,00'8'30001,00+'.VARIABLELEVELdepensesTotalesCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k54.RECODEk54(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU250.0=2)(LOTHRU500.0=3)(LOTHRU750.0=4)(LOTHRU1000.0=5)(LOTHRU1250.0=6)(LOTHRU1500.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOk54Casiers.VARIABLELABELSk54Casiers'Q54*:TOTALQ54A,Q54BQ54C(Regroupéparcasiers)'.FORMATSk54Casiers(F5.0).VALUELABELSk54Casiers1'<=,00'2'1,00-250,00'3'251,00-500,00'4'501,00-750,00' 5 '751,00 - 1000,00' 6 '1001,00 - 1250,00' 7 '1251,00 - 1500,00' 8'1501,00+'.MISSINGVALUESk54Casiers(7501.0THRU9.9999999E7).VARIABLELEVELk54Casiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k49x.RECODEk49x(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU2500.0=2)(LOTHRU5000.0=3)(LOTHRU7500.0=4)(LOTHRU10000.0=5)(LOTHRU12500.0=6)(LOTHRU15000.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOk49xCasiers.VARIABLELABELSk49xCasiers'Q49*A:Moyenneannuelle(Regroupéparcasiers)'.FORMATSk49xCasiers(F5.0).




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VALUELABELSk49xCasiers1'0'2'1,00-2500,00'3'2501,00-5000,00'4'5001,00-7500,00'5'7501,00-10000,00' 6'10001,00 -12500,00' 7'12501,00 -15000,00' 8'15001,00+'.MISSINGVALUESk49xCasiers(36001.0THRU9.99999999E8).VARIABLELEVELk49xCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k50x.RECODEk50x(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU1000.0=2)(LOTHRU2000.0=3)(LOTHRU 3000.0=4) (LO THRU 4000.0=5) (LO THRU 5000.0=6) (LO THRU 6000.0=7) (LO THRUHI=8)(ELSE=SYSMIS)INTOk50xCasiers.VARIABLELABELSk50xCasiers'Q50*A:Moyenneannuelle(Regroupéparcasiers)'.FORMATSk50xCasiers(F5.0).VALUELABELSk50xCasiers1'0'2'1,00-1000,00'3'1001,00-2000,00'4'2001,00-3000,00' 5 '3001,00 - 4000,00' 6 '4001,00 - 5000,00' 7 '5001,00 - 6000,00' 8'6001,00+'.MISSINGVALUESk50xCasiers(36001.0THRU9.99999999E8).VARIABLELEVELk50xCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k56ax.RECODEk56ax(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU500.0=2)(LOTHRU1000.0=3)(LOTHRU1500.0=4)(LOTHRU2000.0=5)(LOTHRUHI=6)(ELSE=SYSMIS)INTOk56axCasiers.VARIABLELABELSk56axCasiers'Q56A*A:Moyenneannuelle(Regroupéparcasiers)'.FORMATSk56axCasiers(F5.0).VALUELABELSk56axCasiers1'0'2'1,00-500,00'3'501,00-1000,00'4'1001,00-1500,00'5'1501,00-2000,00'6'2001,00+'.MISSINGVALUESk56axCasiers(6001.0THRU9.9999999E7).VARIABLELEVELk56axCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k57x.RECODEk57x(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU2000.0=2)(LOTHRU4000.0=3)(LOTHRU6000.0=4)(LOTHRU 8000.0=5)(LOTHRU 10000.0=6)(LOTHRU HI=7)(ELSE=SYSMIS)INTOk57xCasiers.VARIABLELABELSk57xCasiers'Q57*A:Moyenneannuelle(Regroupéparcasiers)'.FORMATSk57xCasiers(F5.0).VALUELABELSk57xCasiers1'0'2'1,00-2000,00'3'2001,00-4000,00'4'4001,00-6000,00'5'6001,00-8000,00'6'8001,00-10000,00'7'10001,00+'.MISSINGVALUESk57xCasiers(36001.0THRU9.9999999E7).VARIABLELEVELk57xCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k58x.RECODEk58x(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU1000.0=2)(LOTHRU2000.0=3)(LOTHRU 3000.0=4) (LO THRU 4000.0=5) (LO THRU 5000.0=6) (LO THRU HI=7)(ELSE=SYSMIS)INTOk58xCasiers.VARIABLELABELSk58xCasiers'Q58*A:Moyenneannuelle(Regroupéparcasiers)'.FORMATSk58xCasiers(F5.0).VALUELABELSk58xCasiers1'0'2'1,00-1000,00'3'1001,00-2000,00'4'2001,00-3000,00'5'3001,00-4000,00'6'4001,00-5000,00'7'5001,00+'.MISSINGVALUESk58xCasiers(24001.0THRU9.9999999E7).VARIABLELEVELk58xCasiers(ORDINAL).EXECUTE.




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*Regroupementvisuel.*q43aBIS.RECODEq43aBIS(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU5000.0=2)(LOTHRU10000.0=3)(LOTHRU15000.0=4)(LOTHRU20000.0=5)(LOTHRU25000.0=6)(LOTHRU30000.0=7)(LOTHRU35000.0=8)(LOTHRU40000.0=9)(LOTHRU45000.0=10)(LOTHRUHI=11)(ELSE=SYSMIS)INTOq43aCasiers.IF(VALUE(q43aBIS)EQ0.0)q43aCasiers=0.0.VARIABLELABELSq43aCasiers"Detteestiméeàlafindesétudesdepremiercycleàl'AFE(Regroupéparcasiers)".FORMATSq43aCasiers(F5.0).VALUELABELS q43aCasiers1 '<= ,00' 2 '1,00- 5000,00'3 '5001,00- 10000,00' 4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00-30000,00'8'30001,00-35000,00'9'35001,00-40000,00'10'40001,00-45000,00'11'45001,00+'0.0'0'.MISSINGVALUESq43aCasiers(0.0,50001.0THRU9.9999999E7).VARIABLELEVELq43aCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*q43bcBIS.RECODE q43bcBIS (MISSING=COPY) (LO THRU 0.0=1) (LO THRU 5000.0=2) (LO THRU10000.0=3) (LO THRU 15000.0=4) (LO THRU 20000.0=5) (LO THRU 25000.0=6) (LO THRU30000.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOq43bcCasiers.IF(VALUE(q43bcBIS)EQ0.0)q43bcCasiers=0.0.VARIABLELABELSq43bcCasiers'Detteestiméeàlafindesétudesdepremiercycleàuneinstitutionfinancière(Regroupéparcasiers)'.FORMATSq43bcCasiers(F5.0).VALUE LABELS q43bcCasiers 1 '0' 2 '1,00 - 5000,00' 3 '5001,00 - 10000,00' 4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00-30000,00'8'30001,00+'.MISSINGVALUESq43bcCasiers(0.0,50001.0THRU9.9999999E7).VARIABLELEVELq43bcCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*q43dBIS.RECODEq43dBIS(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU2500.0=2)(LOTHRU5000.0=3)(LOTHRU 7500.0=4)(LOTHRU10000.0=5)(LOTHRU12500.0=6)(LOTHRU15000.0=7)(LOTHRUHI=8)(ELSE=SYSMIS)INTOq43dCasiers.IF(VALUE(q43dBIS)EQ0.0)q43dCasiers=0.0.VARIABLELABELSq43dCasiers'Detteestiméeàlafindesétudesdepremiercycleàlafamilleoulesamis(Regroupéparcasiers)'.FORMATSq43dCasiers(F5.0).VALUELABELSq43dCasiers1'0'2'1,00-2500,00'3'2501,00-5000,00'4'5001,00-7500,00'5'7501,00-10000,00' 6'10001,00 -12500,00' 7'12501,00 -15000,00' 8'15001,00+'.MISSINGVALUESq43dCasiers(0.0,50001.0THRU9.9999999E7).VARIABLELEVELq43dCasiers(ORDINAL).EXECUTE.*Regroupementvisuel.*q43BIS.RECODEq43BIS(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU5000.0=2)(LOTHRU10000.0=3)(LOTHRU15000.0=4)(LOTHRU20000.0=5)(LOTHRU25000.0=6)(LOTHRU30000.0=7)(LOTHRU 35000.0=8) (LO THRU 40000.0=9) (LO THRU 45000.0=10) (LO THRU HI=11)(ELSE=SYSMIS)INTOq43Casiers.




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IF(VALUE(q43BIS)EQ0.0)q43Casiers=0.0.VARIABLE LABELS q43Casiers 'Dette estimée à la fin des études de premier cycle(Regroupéparcasiers)'.FORMATSq43Casiers(F5.0).VALUE LABELS q43Casiers 1 '<= ,00' 2 '1,00 - 5000,00' 3 '5001,00 - 10000,00' 4'10001,00-15000,00'5'15001,00-20000,00'6'20001,00-25000,00'7'25001,00-30000,00'8'30001,00-35000,00'9'35001,00-40000,00'10'40001,00-45000,00'11'45001,00+'0.0'0'.MISSINGVALUESq43Casiers(0.0,50001.0THRU9.9999999E7).VARIABLELEVELq43Casiers(ORDINAL).EXECUTE.*Regroupementvisuel.*k53.RECODEk53(MISSING=COPY)(LOTHRU0.0=1)(LOTHRU1000.0=2)(LOTHRU2000.0=3)(LOTHRU 3000.0=4) (LO THRU 4000.0=5) (LO THRU 5000.0=6) (LO THRU HI=7)(ELSE=SYSMIS)INTOk53Casiers.VARIABLELABELSk53Casiers'Q53*:TOTALQ53A,Q53BQ53C(Regroupéparcasiers)'.FORMATSk53Casiers(F5.0).VALUELABELSk53Casiers1'0'2'1,00-1000,00'3'1001,00-2000,00'4'2001,00-3000,00'5'3001,00-4000,00'6'4001,00-5000,00'7'5001,00+'.MISSINGVALUESk53Casiers(30001.0THRU9999999.0).VARIABLELEVELk53Casiers(ORDINAL).EXECUTE.* Préparation de données pour les tests : déclarations de nouvelles valeursmanquantes, génralement, il s'agit des non-réponses, pour permettre des testsstatistiqueslogiques.*Profilsocioéconomique.MISSINGVALUESageStrat(99).MISSINGVALUESq78quartile(8,9).MISSINGVALUESresidence(8,9).MISSINGVALUESregion2(6,99).MISSINGVALUESq64a(9).MISSINGVALUESpresenceEnfant(9).MISSINGVALUESepg(3,9).MISSINGVALUESrentabiliteDiplome(3thru9).MISSINGVALUESq82a(9).MISSINGVALUESq23(9).MISSINGVALUESq3237(0,100001thru999999999).MISSINGVALUESq76(99).EXECUTE.*Rétiquetagedesvariablespourlesrendrelisibles.VARIABLELABELSq76'q76:Âgedel''étudiant'.VARIABLELABELSq78x'q78x:Revenufamilialbrut,convertienvariablecontinue'.VARIABLE LABELS q78quartile 'q78quartile : Revenu familial brut, dvisié enquartiles'.VARIABLELABELSq64a'q64a:Changementderégion'.VARIABLELABELSq84'q84:Probabilitéderéussite'.VARIABLELABELSq82a'q82a:Faitd''avoirallongéprécdemmentsesétudes'.




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VARIABLELABELSq23'q23:Présencedelacontributionparentale'.VARIABLELABELSk24'k24:Montantdelacontributionparental,moyenneannuelle'.VARIABLELABELSk3237c3'k3237c3:nombred''heurestravaillées,automne2009'.VARIABLE LABELS travailA09 'travailA09 : Présence ou absence d''emploi, automne2009'.VARIABLELABELSpresenceTravail'presenceTravail:Présenceouabsenced''emploi'.VARIABLELABELSq3237'q3237:Revenubrutannuelenprovenancedutravailrémunéré'.VARIABLELABELS k53 'k53 :Dépensesannuelles enmatièredefraisdescolarité etautresfraisobligatoires'.VARIABLELABELSk54'k54:Dépensesannuellesenmatérielscolaire'.VARIABLELABELSk49x'k49x:Dépensesannuellespourles fraisdelogement (loyer,électricité,téléphone,chauffage,meubles,fournitures)'.VARIABLELABELSk50x'k50x:Dépensesannuellesennourriture'.VARIABLELABELSq52'q52:Dépensesannuellesenvêtementsetchaussures'.VARIABLELABELSk56ax'k56ax:Dépensesannuellesentransport'.VARIABLELABELSk58x'k58x:Loisirsetdépensesautres'.

Code de génération des tableaux

**************************************************************CRÉATEUR:[email protected]*NOM :ESMFPC -Syntaxedegénérationdes tableauxcroiséset des comparaisondemoyennes.sps*Datededernièremiseàjour:15juillet2011**Cefichiercomprendl'entièretédesanalysestatistiquesdu*projetderecherchesurl'endettementétudiant.**Lesanalysessontd'aborddescriptives,etonprocèdeparlasuite*auxtestsstatistiques.Deuxcasspéciauxsonttraitésàlafin.**ILFAUTCOMMENCERPAREXÉCUTER

*ESMFPC-Endettement-Nouvellesvariablesetrecodages.**Àassocieravecunebasededonnéesrécentedel'enquête*sourcesetmodesdefinancementdesétudiantsdepremiercycle.**************************************************************Sélectiondelavariabledepondération.ElleaétéconstruiteparLégerMarketingselonlesadmissionsdel'automne2006.* La pondération est une pondération sur marge en fonction du sexe, du régimed'étudesetdel'établissementd'enseignement.WEIGHTbypond.

* Sélection de l'échantillon: on ne traite que les étudiants à temps plein. Lavariablecontrôleestq2_m1.USEALL.COMPUTEfilter_$=(q2_m1=1).VARIABLELABELSfilter_$'q2_m1=1(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.




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FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.**************************************************************SECTION1:Statistiquesdescriptives.** Onsortlesfréquencespourlesvariables*discrètesetlamoyenne,lamédiane,ladéviationstandardetles*quartilespourlesvariablescontinues.**************************************************************CaractéristiquessocioéconomiquesSexe:sexedel'étudiantAgeStratetq76:Âgedel'étudiant-ageStratcoupelesdonnéespourfaciliterlaprésentationq78quartileetq78x:Revenufamilialbrutresidence:lieuderésidenceregion2:régionsd'étudesq64a:allongementprécédentdesétudespresenceEnfant:présenced'unenfantàchargeepg:statutd'étudiantdepremièregénération.FREQUENCIESVARIABLES=sexeAgeStratq78quartileresidenceregion2q64apresenceEnfantepg/ORDER=ANALYSIS.FREQUENCIESVARIABLES=q76q78x/FORMAT=NOTABLE/NTILES=4/STATISTICS=STDDEVMEANMEDIAN/ORDER=ANALYSIS.FREQUENCIESVARIABLES=anneedureeBaccTronqueerentabiliteDiplomeq82a/ORDER=ANALYSIS.*Financement.*FinTotal:Financementtotal*q23etk24:contributionparentale(présenceetmnontant).* travailA09 etk3237c3 : Travail rémunéré à l'automne 2009 - présence etnombred'heures.* presenceTravail etq3237: Travail rémunérédurant l'année - présenceetrevenubrut.*presenceBoursesetk16b20dCasiers:boursesd'études.FREQUENCIESVARIABLES=finTotalCasiersq23k24CasierstravailA09k3237c3casierspresenceTravailq3237casierspresenceBoursesk16b20dCasiers/ORDER=ANALYSIS.FREQUENCIESVARIABLES=finTotalk24k3237c3q3237k16b20d/FORMAT=NOTABLE




174

/NTILES=4/STATISTICS=STDDEVMEANMEDIAN/ORDER=ANALYSIS.* Dépenses. Deux dépenses font l'objet de traitements particuliers (k53 et k49 -fraisdescolaritéetloyer),*ilfautsereporteràlafindufichier.Touteslesdépensessontpourunan.*depensesTotales:Dépensestotales.*k54Casiers:Dépensesdematérielscolaire.*k49x:Loyer*k50x:Nourriture*k56ax:Transport*k57x:Fraispourenfantàcharge(ici,lespersonnessansenfantn'ontpasdevaleurassociéenousn'avonspasbesoindelesexclure.*k58x:Dépensesdeloisirsetautresdépenses.FREQUENCIES VARIABLES=depensesTotalesCasiers k54Casiers k50xCasiers k56axCasiersk57xCasiersk58xCasiers/ORDER=ANALYSIS.FREQUENCIESVARIABLES=depensesTotalesk54k50xk56axk57xk58x/FORMAT=NOTABLE/NTILES=4/STATISTICS=STDDEVMEANMEDIAN/ORDER=ANALYSIS.*Typesdedettes*q43a=AFE*q43bc=Privé*q43d=Famille/amis*q43=total* Les variables 'bis'sont simplement les variables normales, où les '0' ont étéconvertisenvaleurmanquante.FREQUENCIES VARIABLES=q43aTaux q43bcTaux q43dTaux q43Taux q43aCasiers q43bcCasiersq43dCasiersq43Casiers/ORDER=ANALYSIS.FREQUENCIESVARIABLES=q43aBisq43bcBisq43dBisq43Bis/FORMAT=NOTABLE/NTILES=4/STATISTICS=STDDEVMEANMEDIAN/ORDER=ANALYSIS.*************************************************************.*SECTION2:Comparaisonsdemoyennesettableauxcroisés.*************************************************************.*Version"silencieuse".Onsortlestableauxcroisésetlescomparaisonsdemoyenneavec: *Corrélationsphietpourcentagedecolonnepourlestableauxcroisés.




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* Moyenne et médiane pour les comparaisons demoyennes. * Les tests de corrélations phi ne sont utiles quepourcertainesvariables,quisontnotéesencommentaires. * Pour les autres, on calcule plus loin lescoefficientsdecorrélationdePearson(r)etdeSpearman(rho)*Comparaisondestauxd'endettementenfonctiondelatailledeladette.CROSSTABS/TABLES=q43aCasiers q43bcCasiers q43dCasiers q43Casiers by q43aTaux q43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYq43aCasiersq43bcCasiersq43dCasiersq43Casiers/CELLSMEANMEDIAN.*Comparaisondestauxd'endettement.CROSSTABS/TABLES=q43aTauxBYq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=COUNTROWCOLUMNTOTAL/COUNTROUNDCELL.CROSSTABS/TABLES=q43bcTauxBYq43aTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=COUNTROWCOLUMNTOTAL/COUNTROUNDCELL.CROSSTABS/TABLES=q43dTauxBYq43aTauxq43bcTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=COUNTROWCOLUMNTOTAL/COUNTROUNDCELL.CROSSTABS/TABLES=q43TauxBYq43aTauxq43bcTauxq43dTaux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=COUNTROWCOLUMNTOTAL/COUNTROUNDCELL.*Tests:profilsocioéconomique. *Phiestutilepourresidence;q64a;presenceEnfant;epg




176

CROSSTABS/TABLES=sexe AgeStrat q78quartile residence region2 q64a presenceEnfant epg BYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYsexeAgeStratq78quartileresidenceregion2q64apresenceEnfantepg/CELLSMEANMEDIAN.EXECUTE.*Sectionsurleprofilscolaire.*PhiestutilepourrentabiliteDiplome;q82a.CROSSTABS/TABLES=dureeBaccTronqueerentabiliteDiplomeq82aBYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYdureeBaccTronqueerentabiliteDiplomeq82a/CELLSMEANMEDIAN.EXECUTE.*Sectionsurlessourcesetmodesdefinancement,*PhiestutilepourtravailA09presenceTravailpresenceBourses.CROSSTABS/TABLES=finTotalCasiersq23k24CasierstravailA09k3237c3casierspresenceTravailq3237casierspresenceBoursesk16b20dCasiersBYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYfinTotalCasiersq23k24CasierstravailA09k3237c3casierspresenceTravailq3237casierspresenceBoursesk16b20dCasiers/CELLSMEANMEDIAN.




177

EXECUTE.*Sectionsurlestypesdedépenses.*Phin'estjamaisutile.CROSSTABS/TABLES=depensesTotalesCasiers k54Casiers k50xCasiers k56axCasiers k57xCasiersk58xCasiersBYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANS TABLES=q43aBIS q43bcBIS q43dBIS q43BIS BY depensesTotalesCasiers k54Casiersk50xCasiersk56axCasiersk57xCasiersk58xCasiers/CELLSMEANMEDIAN.EXECUTE.********************************************************************************.*SECTION3:Coefficientsdecorrélation.********************************************************************************.*Générationdescoefficientsdecorrelationpourlestaux.* On ne calcule les coefficients de corrélation que pour les relations avec desvariablescontinues:pourlesrelationsentrevariablesdichotomiques,phiestdéjàgénéré.*Endettement.CORRELATIONS/VARIABLES=q43aTauxq43bcTauxq43dTauxq43Tauxq43aBISq43bcBISq43dBISq43BIS/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.*CaractéristiquessocioéconomiquesCORRELATIONS/VARIABLES=q43aTauxq43bcTauxq43dTauxq43Tauxq76q78x/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.CORRELATIONS/VARIABLES=q43aBISq43bcBISq43dBISq43BISsexeq76q78xresidenceregion2q64apresenceEnfantepg/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.NONPARCORR/VARIABLES=q43aBISq43bcBISq43dBISq43BISq76q78x




178

/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.*Caractéristiquesscolaires.CORRELATIONS/VARIABLES=q43aTauxq43bcTauxq43dTauxq43TauxdureeBaccrentabiliteDiplome/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.CORRELATIONS/VARIABLES=q43aBISq43bcBISq43dBISq43BISdureeBaccrentabiliteDiplomeq82a/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.NONPARCORR/VARIABLES=q43aBISq43bcBISq43dBISq43BISdureeBacc/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.*Sourcesetmodesdefinancement.CORRELATIONS/VARIABLES=q43aTauxq43bcTauxq43dTauxq43TauxfinTotalk24k3237c3q3237k16b20d/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.CORRELATIONS/VARIABLES=q43aBIS q43bcBIS q43dBIS q43BIS finTotal q23 k24 travailA09 k3237c3presenceTravailq3237presenceBoursesk16b20d/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.NONPARCORR/VARIABLES=q43aBISq43bcBISq43dBISq43BISfinTotalk24k3237c3q3237k16b20d/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.EXECUTE.*DépensesCORRELATIONS/VARIABLES=q43aTaux q43bcTaux q43dTaux q43Taux depensesTotales k54 k50x k56axk57xk58x/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.CORRELATIONS




179

/VARIABLES=q43aBIS q43bcBIS q43dBIS q43BIS depensesTotales k54 k50x k56ax k57xk58x/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.NONPARCORR/VARIABLES=q43aBIS q43bcBIS q43dBIS q43BIS depensesTotales k54 k50x k56ax k57xk58x/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.EXECUTE.* Quelques corrélations entre la rentabilité du diplôme et des caractéristiquestriéessurlevolet.*Lestestsdesignificationsontunidirectionnels.CORRELATIONS/VARIABLES=rentabiliteDiplome travailA09 k54 q82a q84 EPG q78x depensesTotalespresenceEnfant/PRINT=TWOTAILNOSIG/STATISTICSDESCRIPTIVES/MISSING=PAIRWISE.* Tests statistiques spéciaux. Pour deux types de dépenses, soit les frais descolaritéetleloyer,nousexcluonsunepartiedel'échantillon.USEALL.COMPUTEfilter_$=(q2_m1=1&(residence=2)).VARIABLELABELSfilter_$'q2_m1=1&(q10=1|q10=3)(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.FREQUENCIESVARIABLES=k49xCasiers/ORDER=ANALYSIS.FREQUENCIESVARIABLES=k49x/FORMAT=NOTABLE/NTILES=4/STATISTICS=STDDEVMEANMEDIAN/ORDER=ANALYSIS.CROSSTABS/TABLES=k49xCasiersBYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=CHISQPHICORR/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYk49xCasiers/CELLSMEANMEDIAN




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/STATISTICSANOVALINEARITY.CORRELATIONS/VARIABLES=q43aTauxq43bcTauxq43dTauxq43Taux/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.CORRELATIONS /VARIABLES=q43aBisq43bcBisq43dBisq43bisk49x /PRINT=TWOTAILNOSIG /MISSING=PAIRWISE.EXECUTE.NONPARCORR/VARIABLES=q43aBISq43bcBISq43dBISq43BISk49x/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.EXECUTE.USEALL.COMPUTEfilter_$=(q2_m1=1).VARIABLELABELSfilter_$'q2_m1=1(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.* Exclusion temporaire des étudiants non-Québécois pour les fins du traitementstatistiquedesfraisdescolarité.USEALL.COMPUTEfilter_$=(q2_m1=1&(q10=1|q10=3)).VARIABLELABELSfilter_$'q2_m1=1&(q10=1|q10=3)(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.CROSSTABS/TABLES=k53CasiersBYq43aTauxq43bcTauxq43dTauxq43Taux/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=ROW/COUNTROUNDCELL.MEANSTABLES=q43aBISq43bcBISq43dBISq43BISBYk53Casiers/CELLSMEANMEDIAN.EXECUTE.CORRELATIONS




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/VARIABLES=q43aTaux q43bcTaux q43dTaux q43Taux q43aBIS q43bcBIS q43dBIS q43BISk53/PRINT=TWOTAILNOSIG/MISSING=PAIRWISE.EXECUTE.NONPARCORR/VARIABLES=q43aTaux q43bcTaux q43dTaux q43Taux q43aBIS q43bcBIS q43dBIS q43BISk53/PRINT=SPEARMANTWOTAILSIG/MISSING=PAIRWISE.USEALL.COMPUTEfilter_$=(q2_m1=1).VARIABLELABELSfilter_$'q2_m1=1(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.




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Appendice II - Code SPSS – cycles supérieurs

**************************************************************CRÉATEUR:[email protected]*Datededernièremiseàjour:19juillet2011**Cefichiercomprendl'entièretédesvariablescrééeset*modifiéesainsiquelestableauxgénérésdanslecadredu*projetderecherchesurl'endettementétudiant*Normalement,exécutertoutlefichiersuffitàrecréer*l'entièretédesvariablesutilisées.**Lefichierrenommelesvariablespourlesrendrelisibles.**************************************************************Constructiond'unenouvellepondérationpond2fondéesurlecycled'études.RECODEq1a(1,2=1.22158789693945)(3,4=0.601297833323734)(96=0)intopond2.WEIGHTbypond2.VARIABLELABELSpond2'Nouvellepondérationsurlecycled''études'.*Recodagedeq1apourdiscriminerdeuxièmeettroisièmecycleuniquement.RECODEq1a(1,2=1)(3,4=2)(96=9)intocycleEtudes.VARIABLELABELScycleEtudes'Cycled''études'.VALUELABELScycleEtudes1'Deuxièmecycle'2'Troisièmecycle'9'Non-réponse'.MISSINGVALUEScycleEtudes(9).*Recodagedeq40pourenréduirelenombredeclasses.RECODEq40

(1,2=1)(3,4=2)(5,6=3)(7,8=4)(9,10=5)(11,12,13,14,15,16=6)(99=9)intoq40bis.




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VARIABLELABELSq40bis'Recodagedeq40pourréduirelenombredeclasses'.VALUELABELSq40bis1'Moinsde6000$'2'6001$à12000$'3'12001$à18000$'4'18001$à24000$'5'24001$à30000$'6'Plusde30000$'9'Jenesaispas'.EXECUTE.*Recodagedevariablespourlesrendredichotomiques.recodeq10(1thru3=1)(4=2)intopresenceBourseMerite.VARIABLELABELSpresenceBourseMerite'Présenced''aumoinsuneboursedemérite'.VALUELABELSpresenceBourseMerite1'Aumoinsunebourse'2'Aucunebourse'.RECODEq20a_m1(1thru4=1)(99=2)intopresenceTravailInterne.VARIABLE LABELS presenceTravailInterne 'Présence ou absence d''un emploi àl''université'.VALUELABELSpresenceTravailInterne1'Emploiinterne'2'Pasd''emploiinterne'.MISSINGVALUESq8a(9).*DescriptiondesétudiantsdeCSenfonctionducycled'études.USEALL.COMPUTEfilter_$=(q1b=1&q1a<>96).VARIABLELABELSfilter_$'q1b=1(FILTER)'.VALUELABELSfilter_$0'NotSelected'1'Selected'.FORMATSfilter_$(f1.0).FILTERBYfilter_$.EXECUTE.CROSSTABS/TABLES=q1dq1jq10q14a_m1q18q20a_m1q28BYcycleEtudesq8a/FORMAT=AVALUETABLES/CELLS=COLUMN



/COUNTROUNDCELL.CROSSTABS/TABLES=q1jpresenceBourseMeriteq14a_m1q18presenceTravailInterneq28BYq8a/FORMAT=AVALUETABLES/STATISTICS=PHI/CELLS=COLUMN/COUNTROUNDCELL.

En - Student Indebtedness

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