Total student debt in Canada is growing like crazy, up 44% between 1999 and 2012, according to a Statistics Canada survey released in February. That’s $28.3 billion owed in total—a number not far behind the GDP of Afghanistan. Crazy, right?
It’s not all bad news, though. Consider this: In 2000, only 15.5% of working-age Canadians had university degrees; by 2013, the number was up to 22.7%. That’s a veritable sea change in a decade, and it explains the burgeoning debt pile (in addition to rising tuition). The increases have been steady too, so you can’t chalk it up to the recession scaring people away from the job market back into the classroom (though there was a bit of that).
Still, it raises an important question: did those degree-getters make a good choice?
In a word, yes. In fact, it’s hard to look at our latest ranking of the 100 best jobs in Canada (based on job growth, pay and demand) and reach any other conclusion. By my count, degrees are relevant—and usually required—for three-quarters of the jobs on our list.
(A handful of professions, like police officer, aren’t clear-cut: qualifications vary by department—for example, the Vancouver Police Department requires 30 credits of college education—but a degree is certainly an advantage.)
Put another way, three-quarters of Canada’s best jobs—according to Canadian Business, anyway—are inaccessible to 77.3% of working-age Canadians, those without a degree.
As Paul Davidson, president of the Association of Universities and Colleges of Canada, told The Globe and Mail, “the basic premise that the value of a BA is not what it used to be is wrong.” His research, based on census information, found that people with a basic undergraduate degree make $1.4 million more over their lifetime than those with no post-secondary and $1 million more than college grads.
In other words, the payoff for those grads is more than they racked up in student debt. Today, the average amount owed in Canada is around $27,000. Sure, paying that down sucks—believe me, I owe more than the average—but it’s paid back 50-fold. What other relatively low-risk investment reaps such a colossal reward?
But, wait, you say: What happens when there are too many degree holders? There are only so many degree-requiring jobs, right? The pie is finite, no? If more and more of us go to school, won’t we end up with a bunch of Starbucks baristas with PhDs?
A valid concern, but the data shows a clear trend of more and more degree-oriented career paths emerging, while prospects for the alternative—working class jobs in manufacturing and construction—grow dimmer. The service industry, meanwhile, pays terribly.
As Richard Florida, the well-known urban studies academic at the University of Toronto, has argued, the “creative class”—professionals, basically, most of whom have degrees—have become an increasingly significant share of the workforce, a trend that shows no sign of stopping.
Indeed, the creative class weathered the recession far better than the working class, according to Florida’s data, and degree holders have always faced lower unemployment, even if that advantage was a little less pronounced last year. Sure, not all degrees are equal—you’ll notice many of our top jobs are in engineering—but getting one is as good of an idea as it’s ever been, if not more so.
In short, Mom and Dad were right. Stay in school.