Despite the rising cost of a post-secondary education in Canada, more than three in five (61 per cent) parents surveyed in HSBC’s latest global report – The Value of Education: Foundations for the Future are funding their child’s education from day to day income, while over a third (35 per cent) are using a specific education savings or investment plan.
Still, the money parents save likely won’t be enough to cover all costs. Figures from Statistics Canada for 2018/2019 show that, on average, Canadian students are currently paying just over $6,838 per academic year for tuition, which does not include room and board, food, transportation and books.*
Parents feel responsible to help their children pay for schooling, but numbers like these leave parents surfing the web for data, asking advice from their peers, and seeking out financial advisors.
Don’t lose heart.
What you need is a plan:
- Start a Registered Education Savings Plan or RESP — You can begin an RESP from the time your child is born all the way up to age ten in order to be eligible for government benefits like the Canada Education Savings Grant (CESG). RESPs are designed to help parents save for their child’s post-secondary education and are provided by organizations like Ontario-based Children’s Education Funds Inc. (CEFI). Providing three main RESPs and supported by positive customer testimonials and reviews, CEFI’s Group Option Plan has paid out the highest scholarships 21 years in a row*.
The earlier you start saving, the more funds you’ll have by the time your child is ready to start their post-secondary education. You can get an idea of what you’ll need to save by using an online calculator, like this one.
- For your child’s sake, control your own budget. You need room in your budget for the above-mentioned saving. Though rewarding, raising a child is an expensive business. In the beginning, it’s the cost of diapers and formula, day care and child care. Later, it’s extra-curricular activities like sports and recreation that add up. Make a plan as early as possible—because the years whip by faster than you think.
- Get a part-time job, kiddo. That character-building weekend fast food job and through the summer beginning at age 16 will really help, but the concept of saving toward their own education begins with the lemonade stand. This is more important than ever, since parents can still be paying for their children’s education well into their twenties. The children who sow into their own futures take ownership of them.
* Tuition Fees Increase Rates Source – Statistics Canada Summary Table – Average undergraduate tuition fees for Canadian full-time students, by level of study, by province published September 6, 2017. https://www150.statcan.gc.ca/n1/daily-quotidien/170906/t001b-eng.htm
* CEFI has compared its Scholarship payments for the Group Option Plan to those of other Group Scholarship Plans through publicly available financial statements and prospectus documents at www.sedar.com . On the basis of this comparison CEFI has determined that its Group Option Plan has paid the highest Scholarship payments per unit to beneficiaries from 1997 to 2017 inclusive.