We all want to succeed in life. When we become parents, we want to do all we can to ensure our children are successful, too. For lots of kids that may mean education beyond high school. There are costs associated with this education, and it’s an investment that on average pays significant dividends for your children well into the future. Post-secondary grads, whether university, college or trade school, earn higher salaries on average and have more choice when it comes to careers. They also tend to have better job security, greater opportunity for advancement and overall more financial stability. This stability can have a significant influence on a person’s long-term financial wellness.
These are amazing upsides, but what does it actually cost? While post-secondary schools in Canada set their own fees and can vary from program to program, you can expect to pay an average of CA$6,850 per year or $27,350 for a 4-year undergraduate degree. Tuition is only part of the expense. Even if your child lives at home rent-free while going to school, there’s also the cost of books, transportation and entertainment to factor in. For those that move away to go to school, rent, food and travel drive the costs up significantly. A recent survey of more than 23,000 students reports the average cost of post-secondary education for students living away from home is $19,500 per year.
So how do parents save enough to cover these costs? Ideally, it’s good to start early to ensure a healthy portion of the funds required are available when your child graduates from high school. There are other viable options to consider as well.
Registered Savings Programs
Registered Education Savings Plans (RESPs) are a powerful savings vehicle. Ideally, they should be started as early as possible in a child’s life.
RESPs also offer added bonuses:
- The Canada Education Savings Grant (CESG) is an incentive program that adds an additional percent to contributions made into an RESP each year, up to a limit. For specific details, visit https://www.canada.ca/en/services/benefits/education/education-savings/savings-grant.html
- If your child has an RESP, they may also be eligible for the Canada Learning Bond (CLB), an initiative to reduce barriers to higher learning for children of low-income families.
Self-directed Savings Plans
A self-directed savings plan can be started at any time using a wide variety of savings tools. There are no restrictions in terms of minimums, maximums and investment choices. You could also consider formal or informal trust accounts to help mitigate taxes.
Scholarships, Bursaries and Grants
There are scholarships, grants and bursaries available to students staying in Canada for their post-secondary education. It requires a little time to research and complete the applications, and the pay-off is ‘free money’ and recognition that could go a long way for your child. While each school offers its own awards based on specific eligibility criteria, below is a list of other resources for you or your child to explore:
- Universitystudy.ca
- Government of Canada Student Scholarships
- Scholarships Canada
- Government of Canada Student Grants
Did you know Rapport also offers students graduating high school or currently enrolled in post-secondary studies a scholarship? Ask your branch for details.
Student Loans and Financial Aid
FEDERAL LOANS
The Government of Canada offers student loans to full-time and part-time students. The amount you receive depends on several factors, including where you live, family income, tuition, fees and living expenses. While these loans can cover or offset the cost of education, they need to be repaid, with interest. Learn more about the eligibility criteria here.
PROVINCIAL ASSISTANCE
Once your child has been admitted to a full-time program, they could also qualify for provincial assistance. In Ontario, applications can be made to the Ontario Student Assistance Program (OSAP). Explore the eligibility calculator here.
STUDENT LINE OF CREDIT
Your child may also qualify (sometimes with a co-signer) for a student line of credit. Post-secondary education is one of the best investments you can make for your child’s future. Understanding the cost and how you will cover it is important to your future and financial wellness too. Our Financial Advocates can offer you advice, planning tools and investment options to customize a savings plan that’s right for your family and your child’s education. Your family’s financial wellness is our priority. We’re here to do all we can to help you – and your children – move towards greater financial health and capability.