TORONTO, ONTARIO — (Marketwire) — 10/14/11 — Last month, children across Canada headed back to grade school. This month, Canadian parents can turn their attention to how they are going to afford to send them off to colleges and universities. According to a BMO Financial Group study released today, more than two-thirds of Canadians (69 per cent) are concerned about the affordability of post-secondary education in Canada.
A four-year university degree can currently cost upwards of $60,000, and various sources estimate that a child born in 2011 could encounter education costs of approximately $140,000 when they are ready to enter university.
“The great thing about RESPs is that a little really does go a long way,” said Mark Stewart, Director, Product Development & Management, BMO Investments Inc. “When you take into account the added benefit of the Canada Education Savings Grant, along with compounded interest over time, even small amounts have an opportunity to grow into significant savings.”
Mr. Stewart also reminds parents and grandparents that, aside from making regular contributions, there are plenty of additional opportunities that can be used to grow an RESP, including allocating a portion of cash gifts children receive from relatives and family friends.
According to the study, only 10 per cent of parents whose child has received money as a gift have put the money towards an RESP account, while 27 per cent of parents have put the money in a savings account or have given the child a portion to buy what they wish (29 per cent).
“In order to prepare yourself for the costs ahead, it is essential to plan early for your child-s education,” said Mr. Stewart. “For example, if you contribute $500 per year, from the time your child is born, total savings- including the Canada Education Savings Grant as well as earnings- could exceed $20,000 by the time your child enters a post-secondary institution.”
The online survey was conducted by Leger Marketing among 1504 Canadian adults, between August 15 to 18, 2011.
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