Is it too easy for secondary and post secondary students to acquire debt?
The concern is that it is difficult to pay off debt in a reasonable time, with minimal penalty.
In 2011, the Vanier Institute of the Family reported that average Canadian family debt has now hit $100,000. Not only that, the debt-to-income ratio, which measures household debt against income, stands at a record 150%, meaning that for every thousand dollars in after-tax income, Canadian families owe $1,500.
In 2010, more Canadian families fell behind on mortgage payments, while credit card delinquency and bankruptcy rates rose. In April, a Statistics Canada survey showed that almost one-third of retired Canadians are in debt.
It is no secret that debt puts a great deal of long term stress on families and individuals.
Today, students appear to have unlimited access to credit cards, cell phone and internet plans from a very early age – a major change from decades ago. Those expenses do not include the high cost of obtaining a post-secondary education which, according to the Vanier Institute of the Family, is $18,000 for the average Canadian student upon graduation. So what can be done about debt load?
Teaching students to manage debt is critical to help prevent a lifetime of financial stress.
Family studies courses relating to financial literacy focus on financial responsibility. One course, Managing Personal and Family Resources, focuses on learning to make informed decisions around large and small purchases. Learn more about the course expectations at www.edu.gov.on.ca.
The City is a resource developed by Financial Consumer Agency of Canada (www.themoneybelt.ca) to help teach financial literacy in secondary schools across Canada. Some topics included are: lifestyle reality check; needs, wants and priorities; income, expenses and budgets; savings and banking; credit and debt; insurance; investing and financial planning.
That resource engages students in performance tasks and is available on-line and in hard copy. It contains a detailed glossary to provide students with the language of finances. The premise of the resource is based on eight people at various stages of their lives, the oldest two being age 45. The other characters are 18, 20, and 25 years old. Working with real-life scenarios, students are able to identify and apply what they are learning to their own lives.
Included are assessments teachers may use to see what the students know already and what they have learned as they work through the tasks. It is imperative students understand the impact debt can have on their lives.
Teacher workshops
This summer, the Ontario Teachers Federation is sponsoring a number of workshops across the province with a focus on family studies and financial literacy for grades 9 to 12. Federation summer institutes are offered at a cost of $50 and serve as professional development for teachers. All workshops are designed to help teachers connect financial literacy learning to real-life experiences.
To register visit www.otffeo.on.ca.
Laura Featherstone is a Toronto-based professional home economist and an instructional leader in social sciences, humanities and family studies with the Toronto District School Board
