The price of a Canadian education is no longer just tuition. For many students, housing, food, transportation and debt are turning post-secondary education into a financial gamble.
For generations, Canadians have been told that post-secondary education is one of the safest investments a young person can make.
A degree or diploma is supposed to open doors, increase earning power and provide a path toward a more secure future.
But that calculation is becoming increasingly complicated.
The latest numbers from Ottawa show that the federal student-loan system is carrying tens of billions of dollars in outstanding debt, while government projections indicate that billions more could ultimately be written off through defaults.
At the same time, students are entering classrooms facing not only tuition bills, but also dramatically higher costs for housing and everyday necessities.
The result is a growing question for Canadian families: How much should a student borrow for an education, and how certain is the payoff?
Tuition is only the beginning
Statistics Canada estimates that the average Canadian undergraduate paid $7,734 in tuition for the 2025–26 academic year.
That national average hides enormous differences.
Average undergraduate tuition was approximately $8,958 in Ontario, $9,863 in Saskatchewan, $9,938 in New Brunswick and $9,988 in Nova Scotia.
By comparison, average undergraduate tuition was just $3,963 in Quebec and $3,746 in Newfoundland and Labrador.
And tuition is only one line on a student’s budget.
A student living away from home also has to pay for rent, food, transportation, books, technology, utilities and other necessities.
For students in Canada’s most expensive housing markets, accommodation can easily become one of the largest costs of attending school.
That means the real price of obtaining a degree can be several times higher than the tuition figure printed on a university website.
Ottawa has increased student assistance — but so has the debt exposure
The federal government has responded to affordability concerns by substantially increasing student assistance.
For 2026–27, the maximum Canada Student Loan for a full-time student remains $300 per week, while the maximum Canada Student Grant for full-time students is $525 per month of study.
Those measures are designed to make post-secondary education more accessible.
But loans still have to be repaid.
And Ottawa’s own actuarial figures show just how large the system has become.
As of July 31, 2026, the federal direct student-loan portfolio stood at approximately $32.1 billion.
The Office of the Chief Actuary projects that the portfolio could grow to approximately $48.2 billion over the projection period.
It also estimates a long-term net default rate of 7.1%.
That doesn’t mean 7.1% of today’s entire student-loan portfolio will suddenly disappear.
Student-loan defaults occur over time, and the government’s calculation accounts for repayments, rehabilitation, recoveries and eventual write-offs.
But the direction is significant.
The actuarial report projects the balance of defaulted direct loans increasing from approximately $2.76 billion in 2025–26 to $3.14 billion by 2029–30, before continuing higher in subsequent years.
Not every student faces the same risk
One of the most important details gets lost when Canada’s student-debt problem is reduced to a single national number.
The risk of default varies substantially depending on where a student studies.
Federal statistics show that the latest published three-year default rate for full-time direct-loan borrowers was 4.8% for university students, compared with 9.0% for college students.
For students attending private institutions, the rate was 15.8%.
Ottawa has subsequently highlighted a similar disparity while explaining changes to federal student assistance.
The government says student-loan default rates at private for-profit post-secondary institutions are approximately 16%, compared with about 5% for university students and 9% for public college students.
That difference matters.
It suggests that the financial risk of borrowing for education isn’t determined solely by how much a student borrows.
The institution, program, employment prospects and eventual income can all influence whether that debt becomes manageable.
Ottawa is increasingly worried about the institutions receiving the money
The federal government has also been examining whether public student assistance is flowing toward programs that produce sufficiently strong outcomes.
In documents supporting changes to Canada’s student-assistance system, Ottawa says the number of grant and loan recipients at private for-profit post-secondary institutions more than doubled between 2018–19 and 2023–24.
During the same period, the number of recipients at universities remained relatively stable, while college recipients declined.
The government also says the number of recipients of the Canada Student Grant for Full-Time Students at private for-profit institutions nearly tripled, from approximately 23,000 in 2018–19 to 66,000 in 2023–24.
That growth has prompted Ottawa to change eligibility rules for some federal grants beginning in the 2026–27 school year.
The federal government argues that public funding should be concentrated on institutions and programs that provide stronger outcomes and reduce financial risk for both students and taxpayers.
The $31,700 number needs some context
The headline figure circulating in the current debate — $31,700 — deserves careful interpretation.
It is not the average amount every Canadian student spends each year.
Nor is it the average student-loan balance.
The actual cost of education varies dramatically depending on the province, institution, program and whether a student lives at home.
For example, a student living with parents in Quebec can face a radically different annual bill from a student renting an apartment in Toronto, Vancouver or another high-cost city.
The important point is therefore not that every student faces a $31,700 annual bill.
It is that the financial commitment associated with post-secondary education can be far greater than tuition alone suggests.
And when that additional cost is financed with borrowed money, students aren’t simply paying today’s expenses.
They’re committing part of tomorrow’s income.
Education still pays — but the numbers matter
None of this means Canadians should abandon post-secondary education.
There is strong evidence that education can improve lifetime earning potential.
The federal government says 2021 Census data show that Canadians with bachelor’s degrees had median incomes 38% higher than high-school graduates, while those with college diplomas had median incomes 14% higher. People with education beyond a bachelor’s degree had a median-income advantage of approximately 50% over high-school graduates.
The problem is that averages don’t guarantee individual outcomes.
A student can graduate with a credential and still struggle to find well-paid work.
A program can be academically valuable without producing enough income to comfortably service substantial debt.
And a student who spends four years paying tuition and living expenses may emerge into the workforce with thousands of dollars in obligations before making their first full-time salary.
That makes the choice of program increasingly important.
The real question for students
The debate over student debt shouldn’t simply be about whether governments should provide more money.
It should also be about whether students are getting enough information to determine when borrowing makes financial sense.
Before taking on debt, students and families should be asking:
What will the entire program cost — not just tuition?
Will I need to borrow for housing and living expenses?
What jobs does this program realistically lead to?
What do graduates in those occupations typically earn?
How long could it take to repay the debt?
Could I complete the program while living at home?
Is there a less expensive institution offering comparable training?
What happens financially if I don’t complete the program?
Those questions aren’t anti-education.
They’re basic financial planning.
Canada’s student-debt problem isn’t going away
Ottawa’s own projections make one thing clear: Canada’s student-loan system is enormous and expected to remain so.
The government estimates that roughly 720,000 students will benefit from the continuation of enhanced federal student assistance during the 2026–27 academic year.
The same regulations are expected to generate approximately $1 billion in additional student loans during that year alone.
The government estimates a roughly 6% risk provision on those additional loans, reflecting the possibility that some will not ultimately be repaid.
Meanwhile, the federal actuarial report expects the overall student-loan portfolio to continue growing and projects billions of dollars in future defaults.
For students, that creates a difficult balancing act.
Education can still be one of the best investments a young Canadian can make.
But an investment is only a good investment when the expected return justifies the cost.
As tuition, housing and other expenses continue to shape the price of a post-secondary education, students and families may need to think less about whether they can somehow afford to attend — and more about whether the particular education they are buying is worth the debt required to obtain it.
That may be the most important financial lesson of all.
