Hey there, time traveller! This article was published 24/9/2010 (3440 days ago), so information in it may no longer be current.
INTERNATIONAL student Max Van Ommen came to Canada last year dreaming of a better life when he earns his undergraduate degree from the University of Winnipeg. One year later, and $20,000 in debt, the 21-year-old science student from the Netherlands sees a somewhat grimmer forecast for his postgraduate life.
"I'll likely be taking my pension and using that money to help pay off my schooling," he says.
That might not be much of an exaggeration.
A recent report by the Canadian Council on Learning found domestic post-secondary students owe more than $26,000 on average when they graduate, almost double the debt faced by students who graduated in the 1990s.
While the study makes no mention of international students' financial debt loads upon graduation, it's likely an even uglier picture.
For instance, Van Ommen says he figures he will owe about $150,000 by the time he graduates in three years.
Like most international students in Canada, he pays, on average, about three times more for tuition than domestic students.
"The term that's being used here a lot on campus is 'cash cows,' " says Aisyah Abdakahar, who is from Singapore and recently graduated from the University of Manitoba.
International students make up a relatively small portion of the overall student population at Canadian universities — about 8.2 per cent at the U of M — and tuition overall accounts for only a fraction of the total revenues of universities in Canada.
But in many ways, international students are a cash cow for the Canadian economy.
According to a 2009 report by the Department of Foreign Affairs and International Trade Canada, the more than 130,000 international students enrolled in Canadian universities generated about $6.5 billion for the Canadian economy in 2008. In Manitoba, the economic impact was estimated at more than $115 million.
The report states their expenditures surpassed the value of exports of the country's coniferous lumber and coal industries.
Yet, despite their value to the Canadian economy, international students often find themselves facing significant financial challenges upon arriving at school, even though they must prove they have secured funding to pay for education prior to being granted a student permit.
Abdakahar, who is serving as the U of M student union vice-president internal until next May, says many students find their budgets for school are often insufficient, in large part because of year-over-year, dramatic tuition increases.
In her case, she arrived in 2006 with a set budget for the next four years.
"It started with financial support from back home — my family, of course," she says. "Everyone was chipping in to finance my education."
She soon realized, however, that her budget was coming up short in many areas, including rent, which also has steadily increased in the last four years.
But the most difficult increase to absorb was her tuition, fees and book costs.
"Just to put it in perspective, in my first year, I paid about $7,000," she says. "By the time I graduated, I was paying around $16,000."
Abdakahar worked three jobs to make ends meet. Between work and study, she found herself putting in 20-hour days virtually every day.
She would have applied for a loan from a Canadian bank, but that option wasn't available. As an international student, she wasn't eligible for loan programs of any kind from financial institutions. Even procuring a credit card was difficult.
"I had absolutely no credit history," she says. "Having no credit card means you can't sign up for a phone plan. You can't sign up for a lot of things."
Camon Mak, director of cultural markets at RBC in Toronto, says Canada's banking industry has been slow to react to the needs of international students, despite their impact on the Canadian economy.
"But with federal funding being cut from universities and colleges, now schools are focusing on foreign students to help offset that loss of funding," he says.
"So the big five banks, including RBC, have taken a far more focused approach in terms of providing foreign students with financial advice and helping them gain access to products for their everyday needs."
Recently, RBC launched a scholarship program for new Canadian students, aimed at providing financial support for newly immigrated families.
But Mak says banking initiatives for international students — not landed immigrants — are still very much in their infancy.
Part of the problem, he says, is that financial institutions have difficulty assessing the credit risk of foreign students because credit rating systems vary by country. And unlike North America, where credit is a ubiquitous part of economic life, some international students have never had a need for credit until arriving in Canada.
"How do you get the necessary insight to say that this individual is a good credit risk?" he asks.
Some Canadian university business schools' MBA programs, including the I.H. Asper School of Business at the U of M, do help international students secure funding from Canadian financial institutions. They do so as a means to attract the best students from around the world and compete with other programs on the international stage.
But most other international students do not have access to secured loans from Canadian banks as a source of funding.
Rob White, a senior policy analyst with the Association of Universities and Colleges of Canada, says Canadian universities are working to find a fiscal balance between remaining competitive on the world stage by attracting foreign students while keeping university affordable for domestic students.
"There would be a tipping point where it becomes an access issue for international students in the same way we keep an eye on it for domestic students," he says.
But despite the tuition increases, he says international students are paying less in Canada than they would in other countries like the United States and the U.K.
"It's safe to say that Canada remains quite competitive as far as tuition fees go and the quality of education that students get here."
And compared to other universities in other provinces, education in Manitoba for international students is still less costly, says the U of M's director of communications, John Danakas. Despite recent increases in tuition, international student enrolment is up more than five per cent from last year at the university.
"Our aim is for about 10 per cent of our enrolment to be international students, so it's not a cash cow," he says.
"They do pay a premium, obviously, because they haven't been contributing taxes to the public education system."
But their value to the university is much more than economic.
They "enhance the culture of the university," Danakas says. "They bring their different backgrounds and experiences to the classroom to make the experience at the university more international and cosmopolitan."
Van Ommen says he has heard similar reasoning at the U of W. Yet from his point of view, it's a painfully ironic statement.
"I may enrich the culture, but in the process, I become poor."
The cost of cultural enrichment
According to the 2009 report by Foreign Affairs and International Trade Canada, international students' total expenditures -- tuition, accommodation, living costs, travel and discretionary expenses -- injected $6.5 billion into the economy.
This generated $291 million in government revenue and sustained employment for 83,000 Canadians.
By comparison, coniferous lumber exports were $5.1 billion and coal exports were $6.1 billion.
A look at the cost of tuition for full course load for programs at Winnipeg's universities (excluding other fees):
U of M
University 1: domestic students -- $3,597; international -- $11,285
Arts: domestic students -- $3,264; international -- $10,318
Business: domestic students -- $4,778; international -- $14,230
Law: domestic students -- $8,820; international -- $19,342
Science: domestic students -- $4,054; international -- $12,378
U of W
(based on taking five six-credit-hour courses)
Arts and education: domestic students -- $3,057; international -- $11,007
Science: domestic students -- $3,521; international -- $12,692
Number of international students at U of W, fall 2010: 437; as percentage of total student population: 4.7
Number of international students at U of M, fall 2010: 2,274; as percentage of total student population: 8.2 per cent.