Back to school planning doesn’t stop after Labour Day

5 reasons to prepare for the cost of post-secondary education

Toronto, ON – August 28, 2013 – As students head back to school, parents should review how they plan to cover the increasing cost of post-secondary education.

“The time period just as our kids head back to school is rather hectic. As parents we’re shopping for school supplies, new clothes, making travel arrangements, adjusting our own schedules at work and even making after school care arrangements in some cases. Add to that the emotional toll of this time on the family, it’s a bit like riding a roller coaster,” says Peter Lewis, Vice-President at the Canadian Scholarship Trust Foundation (CST Foundation). “But the reality is the roller coaster ride isn’t over after Labour Day; parents need to be constantly planning for back to school if they hope that their child will be attending either college or university, especially with tuition rates expected to double in the next 17 years.”

Despite the fact that less than half of Canadian children have had an RESP set for them by their parents, some parents are learning from their own personal experiences. “I personally wanted a post-secondary education and went into debt to get my degree,” says mother of three, Lydia Cossette. I grew up with little direction when it came to financial responsibility and struggled in my own life, I don’t want the same struggles for my three boys.”

CST Foundation offers the following reasons to prepare for the cost of post-secondary education

  1. Tuition fees are rising faster than incomes and inflation. Over the past two decades, average tuition and compulsory fees for undergraduate degrees have been rising by 6.2 per cent annually – three times the rate of inflation. (Canadian Centre for Policy Alternatives and Statistics Canada) A four-year university degree can cost as much as $60,000 today but is expected to double to $140,000 for any child born in 2013.
  2. Student debt levels are off the charts. Canadian student debt loads have hit a staggering $20 billion. That amount could pay for the average annual grocery bill for 5 million families of four. Or 333,333 four year university degrees or 1,666,666,666 cheese pizzas for the hungry students. The average graduating students has anywhere from $13,600 to $25,600 in debt and takes an average of 10 years to pay it off according to Canada Student Loans.
  3. Student stress levels are on the rise. Paying for school is more stressful for students than achieving success academically or finding a job after graduation. Statistics are even worse for students juggling part-time work with full-time studies with 70 per cent of students receiving Quebec financial aid reporting difficulty balancing both work and school.
  4. To build a student’s financial acumen. Half of post-secondary education students admit to running out of money while still at school showing many students are ill prepared for the daily expenses of student life. In a 2005 Survey of Financial Security, post-secondary graduates with student loans had, on average, lower assets and correspondingly lower net worth than those without loans.
  5. To spare parents from regretful decisions later in life. Some parents have delayed putting away money for their child’s education while others have put some savings away only to see those funds depleted over the years from everyday financial demands such as hockey, clothes, music lessons and dance classes. Some have even cashed in their RRSPs to fund their child’s college or university tuition – a decision they will later regret.

The best way parents can start their planning process is to start saving as much as they can afford for their child’s education. The best savings option for parents is a registered education savings plan (RESP), which is a tax-sheltered way of investing for your child’s education and where parents can take advantage of free money offered by the government by way of the Canada Education Savings Grant and the Canada Learning Bond. Some provinces have also set up their own grant contributions for parents who invest in an RESP (Saskatchewan, British Columbia, Alberta and Quebec). The lifetime limit for contributions is $50,000 per child.

Unlike an RRSP, you only have an 18-year window to invest in an RESP. That’s why it’s important to start investing as early as possible for your child’s education. To maximize the amount received in government grants it’s a good idea to invest at least $2,500 per year into your child’s RESP.

For more information or to set up an interview with Peter Lewis and/or a family in your area please contact:

Edyta McKay – Manager, Corporate Communications
CST Consultants Inc.
Office – 416 445-7377 x 303 Mobile – 416 602-2849
[email protected]

About CST

The Canadian Scholarship Trust Foundation is a non-profit organization that has been helping families save for post-secondary education for over fifty years. As a wholly-owned subsidiary of the Foundation, C.S.T. Consultants Inc. (CSTC) is the distributor and manager of the Canadian Scholarship Trust Plans. Focused exclusively on growing and protecting its planholders' savings, CSTC currently manages $3.8 billion in assets for over 280,000 Canadian families. CSTC boasts a sales force of 640 located across the country. The Canadian Scholarship Trust Foundation offers its own awards for academic achievement and community engagement to those students in their Group Plans who are pursuing graduate studies. For more information about RESPs at CST go to or follow us on twitter @cstconsultants and like us on Facebook.