According to Statistics Canada, tuition costs across the country rose by an average of 3.3% during the 2018/2019 school year. This is up to a full percent higher than Canada’s rate of inflation over the same period. Parents know that saving for their children’s post-secondary education will help their kids offset the cost of education when the time comes, but many are unprepared for how high tuition could be in the future. Children born in 2019 could pay over $30,000 for their first year in tuition and on-campus residence costs. By 2037, a four-year university program is expected to cost just under $70,000.
Tuition costs will vary for students, depending on which province they live in, and some costs may be offset by grants and scholarships. But with stories of the crippling debt that some students have to deal with after graduation, it can make one wonder whether the investment is worth it. The short answer is yes. Today, people with post-secondary education continue to earn more income over their lifetimes than people with only a high school diploma. As work shifts in the future, skilled workers will be in higher demand, while those with only basic education will risk being left behind or replaced by automation.
An RESP is a smart and proactive tool that parents and individuals can set up to earn tax-deferred benefits that grow throughout the lifetime of the plan. As well, all Canadians under 18 are eligible to receive up to $7200 in matching grants from the Federal government, along with various benefits from provinces. Tuition costs are on the rise, but the benefits of investing in higher education continues to pay dividends in the long term. By planning ahead and taking advantage of as many benefits and grants as possible, parents can give their children a head start when it comes to managing the costs of post-secondary education.
For more information about saving for your child’s tuition, contact Karen Wallace at: