TORONTO, ONTARIO--(Marketwired - Aug 25, 2014) - With thousands of students making their way to university and college campuses across the country, today BMO Global Asset Management issued the results of a study which found that their parents are expecting to pay for close to half (42 per cent) of their kids' university/college expenses, including tuition, books/supplies, and living expenses.
Other sources of funding identified included:
- Federal/provincial student assistance (18 per cent of total costs)
- Students' savings (17 per cent)
- Scholarships (11 per cent)
The study also found that fewer than half of parents (46 per cent) wish they had more support from family and/or friends to help finance schooling, and more than half (52 per cent) wish people would contribute to their kids' post-secondary education savings in lieu of gifts.
Further, almost eighty per cent (79 per cent) are worried about the rising cost of post-secondary education and 70 per cent are concerned that their children will not be able to afford it.
"With many Canadian parents footing the bill for such a large portion of their child's university or college experience, it's not surprising that the majority are concerned about the costs," said Robert Armstrong, Vice President and Head of Managed Solutions, BMO Global Asset Management. "The total current cost for an undergraduate university degree can exceed $80,000 and is expected to surpass $140,000 by the time a child born in 2014 is old enough to enroll. Given these amounts, the sooner parents start saving for their children's education through tax efficient vehicles like RESPs, the better."
According to the study, two-thirds (66 per cent) of parents have already started a Registered Education Savings Plan (RESP) for their child. This represents a significant increase from 2012, when only 52 per cent of parents had set up an RESP.
Non-financial concerns around university/college life
The study also examined the non-financial concerns of parents surrounding their child's experience while at university or college. These included:
- Getting a job after graduation (75 per cent)
- Maintaining good grades (67 per cent)
- Having a good overall experience (63 per cent)
- Staying focused on school/not "partying" too much (60 per cent)
"It's clear that parents already have enough to worry about when they send their kids off to school without having to think about how they're going to pay for it," said Mr. Armstrong. "Opening an RESP as soon as possible, contributing often and taking advantage of government grants, such as the Canada Learning Bond, can help lower the financial stress associated with funding a post-secondary education."
|Region||% of post-secondary education bill parents are expecting to pay||% concerned about rising cost of post-secondary education||% concerned they will not be able to afford the cost||% who have an RESP||% who are concerned about if their child will get a job after school|
To learn more about saving and RESPs, please visit: www.bmo.com/resp.
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Survey results cited in this report are from a Pollara survey commissioned by BMO Global Asset Management using interviews with an online sample of 1,000 Canadian parents with children under the age of 18, conducted between August 5th and 8th, 2014. The margin of error for a probability sample of 1,000 is ± 3.1%, 19 times out of 20.
*Education costs include tuition and a single residence room with meals and books, from the BMO Education Savings Calculator