September 20, 2023

Student Loan Debt is a Major Barrier to Homeownership for Young Ontarians

Latest poll from OREA shows over half of post-secondary graduates have incurred student debt or loans to finance their education, and of that half, 53% are still currently engaged in repayment.

Female graduate waits in line during college graduation ceremony. She looks at camera with a big smile as she wears a black cap and gown.

New polling released today by the Ontario Real Estate Association (OREA) confirms that student debt continues to significantly impact Ontarians’ ability to purchase a home.

Conducted by Abacus Data on behalf of OREA, The Impact of Student Loan Debt on Homeownership report found that Ontario graduates with debt greater than $5,000 agree that their student debt makes it harder to save up for a home. This situation is forcing some Ontarians to look for other options in more affordable provinces, with 42% of graduates considering leaving the province for a lower cost of living and more attainable housing.

The report found that a large number of young adults find themselves postponing homeownership, with student debt cited as the primary reason for this delay. Other life milestones being delayed as a result of student debt include moving out of the family home, getting married, and starting a family.

“Student debt is not merely a financial burden; it’s the biggest barrier to the Canadian dream of homeownership for many young Ontarians and their families,” said OREA CEO Tim Hudak. “Our research shows that the weight of student loans contributes greatly to the housing affordability crisis which, if left unaddressed, will lead to fewer young Ontario homeowners. All levels of government and industry need to work together to bring affordability home to Ontario graduates.”

Due to high housing costs, almost half of the graduates’ parents surveyed plan to stay in their family home for the next decade, rather than downsizing. This will prevent more housing supply from entering the market.

“As a REALTOR®, I've witnessed firsthand the power of homeownership and the transformative impact it has on communities across the province,” said OREA President Tania Artenosi. “Student debt casts a shadow over this dream, leaving aspiring buyers caught between their educational ambitions and the desire for a place to call their own. We need to work to empower the next generation of homeowners, and that starts with pro-homeownership policies aimed at alleviating the pressures of student loan debt.”

Despite carrying debt, post-secondary graduates still have strong aspirations for homeownership, with 75% still expressing a desire to own residential property. As such, at least 80% of graduates support various government interventions that address housing affordability.

Ontario REALTORS® have proposed several recommendations to help address the housing affordability crisis that young Ontario graduates are facing:

  • The Provincial and Federal government should collaborate to allow graduates to alleviate a portion of their OSAP loan when they add funds into Canada’s ‘First Home Savings Account’ (FHSA).
    • The Government should match the addition of funds dollar-for-dollar. For example, if a graduate adds $5,000 into the FHSA, the Government will reduce the students’ OSAP loan by $5,000.
  • The Government of Ontario should permanently eliminate the accumulation of interest on all Provincial student loans including loans currently being repaid. This is already in effect for interest on Federal student loans.
    • This policy aligns with the announcement on April 1st, 2023, from the Government of Canada, which permanently eliminated the accumulation of interest on all Federal student loans including loans currently being repaid
  • The Government of Ontario should increase the grace period for OSAP loan repayment from 6 months to 1 year, allowing students an additional 6 months to obtain stable employment and save money before making payments.
    • All Ontario students have a period of 6 months after graduating or leaving full-time studies before they are required to begin paying back their loan
  • The Government of Ontario should enable automatic notification to OSAP when graduates file their taxes and receive their OSAP tax receipt.
    • Following the notification, eligible graduates should automatically be entered into Canada’s ‘Repayment Assistance Plan’ (RAP), removing the burden on graduates to re-apply every 6 months.
  • The Government of Ontario should partner with the National Student Loan Service Center to create an online financial education hub that outlines all necessary information related to student loans.
    • This should include information from each post-secondary institution. This would ensure that students/graduates do not miss important information about repayment and default processes, loan reduction options, etc.

By fostering a supportive environment for education financing and advocating for policies that facilitate housing affordability, Ontario can break down the barriers that currently stand between young Ontario graduates and their homeownership dreams.

Additional background information about the report can be found at this link.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

416-445-9910 ext. 246

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