Graduating from high school and pursuing a post-secondary education is the best way to maximize your career options and professional opportunities. But getting a post-secondary education can be costly.
Canadian parents have become increasingly worried about saving money for their children’s higher education. While nearly half of Canadians believe it’s important to begin saving early, the vast majority of parents don’t believe they are saving enough for their kid’s post-secondary education.
How much exactly should parents save? And when should parents start saving for their kid’s education fund, taking into account rising tuition fees, books, and housing expenses?
The sooner the better. A Registered Education Savings Plan (RESP) is the best way to start. You can contribute $2,500 per child annually up to a maximum of $50,000; that works out to just $208.33 monthly.
On top of that, the Canadian government will give you up to $500.00 annually in the form of Canada Education Savings Grant (CESG). The CESG automatically matches 20% of your RESP contribution up to a lifetime maximum of $7,200.
The Cost of a Post-Secondary Education
How much will your kids need to attend a post-secondary institution? Average post-secondary education fees in Canada have increased from $2,243 in 1990-91 to $6,842 in 2016-17.1
Keep in mind, that’s just the average and it’s just for tuition. The real cost of a post-secondary education depends on a number of factors.
Type of College and Course
Where you study and what you study affects tuition costs. A two-year diploma from a local college costs less than a four-year university degree or a full degree from a university abroad. Tuition costs typically increase by two percent to five percent annually, so you need to factor this into the equation.
Tuition fees vary from school to school and province to province. Some programs charge more than others due to format, lab time, etc. Co-operative programs last longer and cost more than a regular full-time program. But the benefits of a co-op program can outweigh the upfront costs since co-op students are often paid for their work and they gain work experience.
The national average is expected to hit $6,842 in 2016-17, but in Nova Scotia, Saskatchewan, and Alberta, the average cost will exceed that. In some Ontario post-secondary institutions, tuition fees are expected to reach close to $9,000 a year.
Some post-secondary educations charge extra fees for certain services or to join clubs and events.
Cost of Books and Study Materials
It’s not uncommon for students to have to pay anywhere in the range of $800.00 to $1,000 per year on books and other materials. Even then, the cost of books and study materials varies depending on what program your kids choose to study.
Buying new books from the school bookstore each year can be expensive. Fortunately, there are ways to reduce costs: buying second-hand books, borrowing books, buying books online, or buying an e-version.
It’s not uncommon for living expenses to be greater than tuition costs and books. Where you live has a big impact on how much you need to save. Living on campus can add over $45,000 to post-secondary education costs. If your child lives at home, their overall costs are substantially lower. If they need to live on campus or rent an apartment, you need to factor in rent, utilities, and food when budgeting for your education fund.
Any Scholarship, Savings, or Part-Time Job
A RESP is an excellent way to start saving for your child’s post-secondary education, but there are other sources of income your child can access. Students can qualify for scholarships for academics, sports, and volunteering. The federal government also provides grants to students who come from low-income families. Moreover, additional grants are available depending on which province you come from.
If your child works throughout high school, they can contribute to their own savings. Or if they’re planning on working part time when going to college or university, that should be factored into their overall education fund costs.
GRESP, Helping Canadians Attain Their Post-Secondary Education Goals
A post-secondary education is a big financial undertaking. But knowing the total costs helps you create a budget and determine how much you need to contribute to an education fund. Better yet, let a sales representative at Global RESP Corporation help you.
With regional offices in British Columbia, Alberta, Ontario and Quebec, and hundreds of independent representatives across the country, Global RESP Corporation is one of the fastest growing companies in the RESP industry in Canada.
Thanks to our national presence, GRESP is one of the few companies that administers all provincial and federal grants available. On top of that, GRESP is also the primary distributor of the Legacy Education Savings Plan and the Advanced Education Savings Plan. Plans allow you to save for your child’s post-secondary education, with the goal of providing steady and consistent returns on investment.
If you’re interested in getting started with a Global Plan, find a Global RESP Corporation sales representative in your area. Or fill out a form and a Global RESP Corporation sales representative will contact you.
1. Habib, M., “University tuition rising to record levels in Canada,” CBC web site; http://www.cbc.ca/news/canada/university-tuition-rising-to-record-levels-in-canada-1.1699103, last accessed September 19, 2016.