How to estimate costs of post-secondary education

Here is a guest post from Alfred Yang, a co-founder of a new website aimed at helping parents plan for the bills when their kids reach college or university.

How a Small Team is Helping Canadians Plan Finances for Post-Secondary Education

By Alfred Yang

I received my undergraduate degree in engineering in the year 2000. Without a doubt, my post-secondary education gave me an edge in the job market and opened up incredible career opportunities.

Today, the financial barrier to the same credential is much higher. Annual tuition for the engineering program has gone up from $4,500 in the year 2000 to over $13,000 in 2016. For a four year program, that’s a whopping $52,000.

To put it another way, this amounts to an annual increase of over 7%, well beyond the rate of inflation. If you add living expenses and school supplies, the cost becomes even more alarming.

Today, the average new grad from university or college owes $28,000 in student debt. Canada’s outstanding student loan balance has been steadily climbing in the past two decades and there are no signs of it going in the opposite direction.

While I can’t do much about rising costs, I joined forces with Aly Hirji and Scott Moore to build awareness and encourage sound financial planning.

The cost of the engineering program I described is just one example. Everyone’s situation is different and we want to find a way to help Canadians on a more personal level. That’s why we created is a tool that forecasts the cost of post-secondary education and helps students and parents plan finances accordingly.

Let’s say you have 10-year-old daughter who is fascinated by animals. You think she may want to study life science one day. You want to give her the best shot at attending a great post-secondary institution.

But even with that goal in mind, there are a number of crucial questions that need to be answered:

– How much money do you need to be saving?

– What is the cost difference between studying locally and out of province?

– What financing options besides the family’s savings are available?

– If a student loan is required, what kind of financial burden will that create for my child? is designed to help. It starts by asking you a few simple questions, then makes predictions on tuition, cost of living and expenses, based on historical data.

The end result is a good estimate of the financial target you or your family should be aiming for when planning for post-secondary education.

Our team also wants to build awareness of the many funding options available, including the Canadian Learning Bond (CLB) and Canadian Education Savings Grant (CESG), and the impact they have on your overall RESP savings.

We are building up a database of scholarships, student aid services and borrowing vehicles. We hope can become an end-to-end tool to help Canadians create a strong financial plan for post-secondary education.

Since our pilot launch in October, we’ve received a lot of feedback. We’ve seen a desire to understand trends in the job market to assist with decisions on academic studies.

We know that university or college is not the only path to a fulfilling career, so we are looking into adding forecasts for trades and apprenticeships.

While our team is making great strides towards these objectives, we can get there a lot faster by working with individuals and organizations who share the same passion for educating students and families.

If you have any feedback at all, we’d love to hear from you.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

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