Human Resources Development Canada (HRDC) estimates that the cost of a university or college education in the year 2018 could be as high as $100,000.
Since 1990-91 the average tuition expense has increased by more than 100%.
Canadian Government predictions are conservative, since actual education inflation has been 6.8% per year for the past 10 years. This chart shows you how much your child's education could cost if historical increases hold true.
Year of Birth |
Year of School Entrance |
Estimated Cost of 4 Year Program* |
Estimated Cost of 4 Year Program Based on Historical Increases.* |
2004 |
2022 |
$112,143 |
$267,544 |
- In 1999, 167,000 jobs in Canada disappeared for people with no more than a high school education*
- In 1999, 431,000 jobs were created for workers with post-secondary education
- Currently a university graduate will earn $1,580,000 more in their lifetime than a high school graduate. This amount could triple by the year 2015.
With the cost of post-secondary education rising every year, how will you pay for it?
Let's explore some options.
- Withdraw the money from your savings account or investments.
- Borrow the money, or mortgage your home and pay it back later.
- Depend on student loans - assuming your income is below the threshold and your child qualifies.
- Let your child earn the money with a summer job (how many summer jobs do you know of that pay what it costs to attend school for one year?)
Sources: Heritage Education & Statistics Canada
Pooled Plan RESPs
Scholarship Plan RESPs (also known as Pooled Plans) like the Heritage Plans must invest contributions in lower risk investments like Federal and Provincial bonds, Guaranteed Investment Certificates, Term Deposits, Corporate Bonds, Mortgage - backed securities and Government Treasury Bills and Variable Rate Securities). That means your contributions are at low risk and will be there when you need them most - when your child is ready for school.
Self-Directed RESPs
Banks, trust companies, mutual fund companies, and investment dealers offer self-directed RESPs. However, they may not be as secure and are not subject to the safe investment limits that govern Pooled Plans.
The market value of your self-directed plan may even drop below the amount you have contributed, due to volatility (ups and downs) in the stock market.
As a result, self-directed plans tend to be riskier investments.
Source: Heritage Education Fund
C.J.Matthews & Associates Limited is associated with Heritage Education Funds & Industrial Alliance. We can provide our clients with either ‘Pooled Plan’ or ‘Self-Directed’ RESPs.
For further information, please contact Allan Muise or John Simms.
Useful links for Registered Educations Savings Plan information:
http://www.heritagefunds.ca/content/education_calculator.asp
http://www.inalco.com/english/individual/savings/education/education.jsp
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