Three years ago, Godwin Scott graduated from Carleton University with a student debt of about $ 120,000.
Today he has no debt.
“To be honest, it didn’t hit me that night,” said 26-year-old Scott, who made his final payment on a student loan last October at the height of the pandemic. “I still feel weird knowing that I don’t owe anyone.”
Scott is one of several post-secondary students who spoke to CBC Ottawa in 2017 about what they owed and how it affected their lives. We tracked where they are now and how they are paying off the remainder of their debt.
Scott, an international student at the time, had a debt to an Indian bank that charged about 13% per annum. He said he relied on the advice of financial experts and used Canada’s tax credit to defer taxes for several years, but his best strategy was to pay off his overseas loan as quickly as possible.
“When I finished my studies, I talked to friends [and family]… I asked them to lend me maybe a couple of thousand dollars that I can get back in a couple of months, ”explained Scott, who said that a handful of people trust him and lend him money at zero interest.
“[There] there was an element of faith involved, ”he said.
Scott used the roughly $ 50,000 he borrowed from family and friends to nearly halve his bank loan. He lived frugally in the basement of the pastor’s house, where he paid $ 500 a month in rent, which allowed him to devote about 80 percent of his salary to student loans.
Over time, he was able to reduce the portion of his income earmarked for paying off debt by about 60 percent.
“One thing I want to share with students coming to Canada is … it is your responsibility to return what you borrowed … quickly,” he said. “Because this is the best path to financial freedom.”
Dealing with credit debt
Troy Curtis graduated from Carlton in the summer of 2019 with about $ 17,000 in debt through the Ontario Student Assistance Program (OSAP) and line of credit. He also had thousands of dollars in credit card debt to pay for housing while at school.
Curtis, 25, who now works as a freelance digital marketing consultant and photographer, has to pay around $ 10,000.
“After I graduated, the most important thing for me … was to get a job right away,” he said. Eventually, Curtis found a job with a nonprofit and worked part-time as a graphic designer and wedding photographer.
“It was then that I was able to really start grappling with credit card debt every month,” he said. It took a year and a half to pay off the card.
During the pandemic, Curtis’s work from home situation remained unchanged, but he found that he had more contracts due to the greater demand for virtual conferences and other projects. He was making big dents in his debt and putting it aside for the future, perhaps home, so he turned to a financial advisor.
Curtis says he is now optimistic about his financial future.
“[I feel] more comfortable, ”he said. “The $ 10,000 still in debt is a lot, but it’s definitely manageable. I understand how to get the money back. “
Goodbye 30 thousand dollars in 2.5 years
Lauren Paulson, 27, graduated from Algonquin College in December 2018 with about $ 50,000 in debt – more than half of it through OSAP and the rest through a line of credit at her bank.
In less than three years, a CHEO radiologist crushed about $ 30,000 of it, “which is fine with me,” Paulson said.
Paulson said she was “very lucky” to find a job right after school. She said her strategy is mainly focused on cutting costs, and she is grateful to her partner for the opportunity to buy a home, which is an “important factor” in her ability to pay off her debt so quickly.
“If I were in this situation, investing so much of my salary every month in rent, I would never be able to pay off such a large debt,” she said. “In that sense, luck was on my side.”
Paulson also took aim at her higher-interest line of credit. She is now focusing on OSAP, which has given her an interest-free grace period during the pandemic.
“I’m very lucky,” she said. “I’ve never been super strong financially or very smart in my finances, I would say. There is a reason why I ended up with $ 50,000 in debt. “