Education pricey, but worth it

To graduate or not to graduate? The million-dollar question has lately been generating high levels of interest, and some cost concerns.

As more than one-million post-secondary students head back to school this fall, student organizations are reinforcing the value of a university degree.

If a recent release from the Association of Universities and Colleges of Canada (AUCC) is to be believed, university graduates contribute more to Canada’s economy and communities than do those without the benefit of higher education.

The new AUCC data on the value of a university degree highlight the benefits of investing in higher education against the backdrop of Canada’s shifting demographics and the need for an increasingly flexible, adaptable and productive workforce.

“University graduates enter the workforce with the skills and knowledge necessary to adjust more easily to shifts in the employment market,” says Paul Davidson, president, AUCC. “They find jobs quickly — and they find good jobs, that are interesting and pay well.”

Never before did a university degree prove more useful than during the recent economic downturn, the worst in 70 years. University graduates enjoyed 150,000 net new jobs from September 2008 to March 2010, compared to 684,000 fewer jobs for those without a degree during that same period, according to AUCC data.

Some other figures, however, are not so comforting. At an average of over $5,000 per year, tuition fees in Canada are at a record high. Total student debt owed to the federal government surpassed $13.5 billion this summer. This is causing serious concern among parents while proving detrimental to students seeking higher education.

“Record high tuition fees are already shutting many Canadians out of post-secondary education,” says David Molenhuis, national chairperson of the Canadian Federation of Students. “Students have long called for tuition fee reductions and are happy to see the AUCC calling on the government for increased funding to reduce the cost of education.”

Students echo the AUCC’s call for more post-secondary education funding to reduce tuition fees and other costs.

The issue is not new to the federal government which paid out about $650 million in Canada Education Savings Grants in 2008. Children up to age 17 are eligible to receive the education savings grant if a Registered Education Savings Plans (RESP) is opened for them.

A huge lack of awareness, however, has meant few Canadians take advantage of a savings vehicle which helps sock away thousands of dollars toward post-secondary education.

An RESP can be opened upon a child’s birth and the money can be put in an investment vehicle of the family’s choice. The government then matches a portion of the contributions, depending on the family’s income level.

While the uptake for the RESP is low, it’s even lower for the Canada Learning Bond for low-income families. The saving opportunity, with only 16.3% takers, might well be Canada’s best kept secret. The plan gives eligible families an initial $500 contribution towards their child’s RESP — allowing them to open an RESP account without having to make their own investment — and deposits a further $100 annually to a maximum of $2,000.

The stress of rising cost of education has perhaps an even bigger impact on newcomers to Canada who are still struggling to settle into their new home. A recent RBC/Student Awards Inc. survey found that new Canadian students are often challenged by financial concerns and feel added pressure to achieve higher levels of academic performance.

These valuable opportunities are waiting to be exploited by those who want to pursue higher education, live healthier lives, and have fewer periods of unemployment.

(09/02/10)