"I want my child to attend university, but how will I ever pay for it?"

It can be hard to believe that the child you are buying back to school supplies for will switch from crayons to calculus and comparative literature. It can be mind boggling to think about how much it will cost.

What to expect

The cost of a degree is high and increasing each year. Right now you can expect to pay about $5,000 in tuition per year for a general university program and $2,500 for a college program. If they do not live at home the cost increases to at least $15,000 plus additional living expenses. A typical 4 year university program will cost about $64,000. Assuming a 3% inflation rate, for a child starting kindergarten this September, by the time they step on campus for frosh week tuition costs will be about $7,100 per year. Before you start moving your retirement age up to 90 we can show you some helpful strategies.

What to do

Savings: The best time to start saving for your child is at birth. By setting aside about $4,000 a year you will have the funds needed by the time your child is ready to start. The best savings vehicle is a Registered Education Saving Plan (RESP) which is made up of three parts. The first is the contributions made in the student's name. These have a lifetime limit of $50,000 and contributions must end before the child turns 21. Contributions are not tax-deductible. The second part is the Canada Education Savings Grant (lifetime limit $7,200). To open an RESP, the child must have a social insurance number. The final portion is the investment income earned on contributions. The RESP is free from tax until the funds are used for their program. At which time the funds are taxed in the hands of the child. There are many RESP rules, so speaking to a financial professional is necessary.

Scholarships: There are literally hundreds of scholarships available. They can be general or specific to a school or program of study. Some are even set-up so all you have to do is apply to get it! The key is to get started early. Most have deadlines in the fall prior to the year being applied for. It may take a bit of effort but the pay-off can be great. Check out the websites in the USEFUL LINKS box and start surfing for tuition dollars.

Student Contribution: It may be impossible to save all that is needed with a summer job but that doesn't mean your child cannot kick in. Parenting experts suggest a child contributing to expenses will place more value on the experience and take it more seriously. Many parents ask their children to pay for books while they cover tuition, room and board. Checking with the school's on-campus employment center will give your child access to tutoring, teaching assistant and other jobs which can fit around class and study schedules.

Student Loans: The government has a needs-based loan program available for post-secondary education. Based on total household income students can qualify for loans to cover costs. Payments and interest are deferred until either 6 months after graduation or when full-time attendance is stopped. For many students servicing a student loan when they are just starting out means that borrowing for a car or house may be impossible.

Between braces, fees and all the other demands on your paycheque you may not have started saving for your child's education. Whether your child is talking about getting a new bike or a drivers' license it is never too late to start. Come in, We C.U.™ so you can get started moving on from crayons to calculus.