University and college students are borrowing more money than ever and finding it more difficult to pay it back, according to a study recently released by Statistics Canada.

In 1990/91, one in five students reported repayment difficulties compared with one in three students in 1995/96. Both the rate of default and the average value of loans in default rose sharply during the six-year period. Students at private institutions recorded the highest increase in debt loads and their default rate reached more than 38 per cent by 1995/96.

Overall, the average debt load of a student graduating with a Bachelor's degree, when adjusted for inflation, has risen 129 per cent since 1982. College graduates have seen their debts increase 140 per cent over the same period.

With higher debt loads in the 1990s, students are also more likely to declare bankruptcy. In 1998, however, amendments were made to the Bankruptcy and Insolvency Act that restrict students from declaring bankruptcy until 10 years after graduation. Earlier this year, the Canadian Federation of Students launched a legal challenge against these changes on the grounds that they discriminate against university and college students.

Meanwhile, Statistics Canada is also reporting that university students are facing another big hike in tuition fees this year because of reduced government funding. Across Canada, fees are up an average 7.1 per cent. The increase is highest in Ontario (9.6 per cent) and lowest in B.C. (0.8 per cent).

Since 1990/91, average undergraduate arts tuition has increased 126 per cent. The largest increase occurred in Alberta where average fees rose nearly tripled from $1,244 to $3,658.

As government funding has declined, increased tuition fees have become a key source of revenue for universities. In 1996/97, tuition made up 16 per cent of operating revenue for universities -- twice the level of 1980/81. During the same period, government grants fell from 74 per cent to 58 per cent of total operating revenue.

Source: Statistics Canada, The Daily, July 30, 1999, www.statcan.ca.