A new poll from Royal Bank of Canada (RBC) reveals a growing disconnect between how students are paying for post-secondary education and how prepared they feel to manage the financial realities that come with it. While 57% of students say they currently use or plan to use financial aid to help fund their education, 25% report low confidence in understanding how student loans work and just 28% feel very confident in estimating how long it will take to pay off their debt.
The New Reality of Student Debt and Why So Few Feel Ready
“What we keep hearing from students is that the challenge isn’t willingness — it’s awareness,” said Lucianna Adragna, Vice President, Client Segments, Everyday Banking, RBC. “Many simply don’t know what funding options are available to them, or which ones are actually the right fit for their life. Feeling confident about your path starts with understanding what’s out there — and that’s exactly where we want to help.”
Tuition is just part of the equation. Recent studies show that one year of post-secondary education can exceed $30,000 a year when tuition, rent, food, transportation and textbooks are factored in.
Student Loan vs. Line of Credit vs. Credit Card: What’s the Difference?
62% of students say they rely on two or more sources to pay for school, including government loans, scholarships, family support, credit cards and student lines of credit. Yet only 30% say they understand the differences between options like student loans, lines of credit and credit cards.
“Borrowing for post-secondary education is often a practical step toward future opportunity and earning potential,” said Sara Son-Hing, Vice President, Personal Lending, RBC. “When students understand how debt works and repay it responsibly, student borrowing can do more than help fund education – it can help build credit and support future financial goals.”
Rather than treating borrowing as a single transactional decision, RBC recommends focusing on how it works in practice by identifying what a student is borrowing for, how borrowing costs change over time and how repayment terms may impact cash flow, long-term credit-building and financial goals.
