The Rising Cost of Post-Secondary Education
Did you know? For a child born in 2017 the first year of university could cost as much as $29,3941… per year? Today, families of university-age students living on-campus are currently spending an average of $20,300 per year, while those who live at home or are not paying for residence and meals, are spending an average of $10,600.
It’s no surprise that the cost of post-secondary education is on the rise. Tuition fees outpace the rate of inflation with consumer prices rising 1.3% from May 2016 to May 2017 and tuition increasing 2.8%2,3 during the same period. So, if you’re growing your family, or planning to, you should also consider a Registered Education Savings Plan (RESP) to help grow your savings and effectively prepare for what comes next.
The Real Cost of Post-Secondary Education
The actual cost of your child’s post-secondary education depends largely on the program, and varies from between provinces.
For example, Ontario students entering the Humanities spent approximately $6,044 on undergraduate tuition fees in 2014-2015, while engineering students spent $10,460. Comparatively, a student in Newfoundland and Labrador was able to enroll in either program for $2,550, nearly a quarter of the cost in Ontario4.
The real cost of post-secondary education is not limited to tuition alone – student fees, books, housing and transportation add to the bill. This may be why half of Canada’s graduates reported having education-related debt, owing an average of $26,8005.
Student Debt: A Reality for Many of Canada’s Graduates
60% of graduates6 with debt say they rely on parents, family or spouses for financial support. For parents of young children, this means that the time to start considering a long-term savings plan for his or her post-secondary education, is now.
While it’s a good idea for students to start saving for their education by working during the summer or part-time during school, the reality is students need financial support. Michaella, a Political Science student at the University of Toronto, recently commented, “It’s such a huge amount of money that I don’t think persons under the age of 18 would be able to save up until that point.” A fellow student added, “I’d have to get a part-time job just to try and pay for my education, and still end up with mountains of debt.”
Why Post-Secondary Education is Still Worth the Spend
After all is said and done you might wonder if sending your child to college or university really worth the cost. The answer, according to the stats, is yes.
Employment rates are still the highest among university or college graduates between the ages of 25-64 (82%)7, a statistic that will prove extremely relevant as economic growth and replacement in Canada creates 5.8 million job openings by 2022, two thirds of which require college, university or vocational education8.
The fact is, saving for your child’s education with an RESP is a wise decision you can make now to set up a set your child up for success for years to come.
1 Knowledge First Financial projections
2 University Tuition Fees, 2014/2015 (Statistics Canada, Sept. 2014)
3 University Tuition Fees, 2014/2015 (Statistics Canada, Sept. 2014)
5 Canadian University Survey Consortium, 2015 Graduating University Student Survey (July 2015)
6 Canadian University Survey Consortium, 2015 Graduating University Student Survey (July 2015)
7 Source: Education Indicators in Canada: An International Perspective (Statistics Canada) (April 2016) http://www.statcan.gc.ca/pub/81-604-x/81-604-x2015001-eng.htm
8 Tier for Two, Canadian Centre for Policy Alternatives (Sept. 2014)