In Canada, parents and kids are on different pages when it comes to who should finance post-secondary education.
But, surprisingly, that may be good news for parents, says two recent CIBC polls. Even though parents are willing to pay two-thirds of their children’s education costs, four in 10 students think their parents should only pay a quarter.
Key poll findings are summarized in the table below.
|Are willing to pay, on average, 67% of their children’s education costs, similar to last year’s 66%||Say their parents will pay 33% on average toward school expenses for the upcoming year|
|Of those paying for their child’s education, 21% say they will pay the entire cost||Plan to pay 33% of their tuition and expenses for the upcoming school year|
|On average, parents expect the entire cost of each child’s post-secondary education to be $64,300||Forty-one percent say their parents should pay no more than a quarter of their education costs|
|Nearly half of parents (48%) expect education costs to be greater than $50,000||Forty percent expect to have more than $25,000 in student debt|
Still, “part of the disconnect between parents and kids is likely [because] students aren’t accounting for all of the costs beyond tuition. That’s why the conversation between about the full costs of education and how [it will be paid for] needs to start long before the first tuition payment is due,” says Marybeth Jordan, managing director and head of CIBC Investor’s Edge.
This is crucial since not only are school costs rising, but also tight labour market mean many students can’t find summer and post-university jobs, says CIBC. For example, tuition costs alone have increased by 44% in Canada over the past decade, according to the Canadian Centre for Policy Alternatives.
As a result, “parents today [should] include education [costs] in their overall financial plan and start making [RESP] contributions, no matter how small, while their kids are young,” says Jordan.
Along with planning ahead and starting RESPs, parents can educate their children on financial matters and help them find low-cost bank accounts and products aimed at students.
Across Canada, parents expect to pay different amounts. Here’s a breakdown of the results.
NOTE: Leger conducted this online survey by polling 1,056 Canadian parents with children under 25 (between July 21 and 23, 2014). It also polled 500 university or college students between July 10 and 17, 2014.