As students across the country start a new school year, many are realizing just how costly it is and will continue to be, to pursue education after high school.
A new report by the Canadian Centre for Policy Alternatives (CCPA) found that on average, tuition and compulsory fees for undergraduate students across Canada have tripled since 1993. Details can be found here.
The study also projects an increase in tuition over the next four years, from $6,971 to $7,590 in 2018-2019. The province with the most expensive tuition is Ontario, where the costs are expected to rise from $8,691 to approximately $9,541 in 2018-2019.
For parents, these are concerning numbers; and the numbers are backed up by a recent release from Statistics Canada which says that not only are tuition fees on the rise, additional compulsory fees (which -- as their name implies -- are compulsory!) are increasing as well. These fees can be over $1,000 a year on top of the tuition bill.
The cost of tuition can be overwhelming to say the least. For families and students trying keep afloat this year, making tuition payments is already a challenge often managed by multiple loans, jobs and sleepless nights spent studying or trying to make the grade in order to maintain a scholarship.
If the projected costs seem frightening now, imagine what they will look like for a parent with a child who just entered junior kindergarten this past week. Post-secondary education may feel like an elusive dream that is moving farther and farther out of reach.
That's why I keep reminding parents; the best solution is to plan, prepare and start saving early. Taking advantage of Registered Education Savings Plans (RESP) not only allows you to shelter investment income tax-free while in the RESP, it also provides you additional money by way of government grants.
Don't think these statistics are starting to turn heads? Think again! The important issue of education savings is gaining attention even on the federal election campaign trail, especially for those families who are struggling to make ends meet.
On Tuesday, September 8th, which was the first day of school for many students, the Conservatives made a promise to help families who are trying to save for their children's education. The pledge: to double the federal contribution to the Additional Canada Education Savings Grants (ACESG) geared to help lower income families.
Right now, in addition to the 20 per cent grant that everyone receives, the government contributes an extra 10 cents for every dollar of the first $500 saved in an RESP set up by middle-income families. For low-income families, the grant is 20 cents for every dollar of the first $500 contributed in an RESP.
If this platform promise were to be implemented these families would see matching grants of 40 per cent or 60 per cent on the first $500 they put into the RESP each year. That kind of help goes a long way!
Any investment in encouraging families to save is a good idea. RESPs matter in more ways than one.
Early saving means more hope, opportunity and freedom for a child's future. According to the Association of Universities and Colleges of Canada, over their lifetime, university graduates typically earn 50 per cent more than other full time workers who do not have a university degree.
My hope is that the other federal party leaders will not only put education and RESPs on their platforms but up the ante to give Canadians even more reason to invest in their children's future education and realize the benefits of saving early on.
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