Paying for Your Secondary Education in Canada
Getting a college degree is a gateway to getting even an entry-level job. Moreover, the job of your dreams may be locked away behind four or eight years of education and seemingly insurmountable debt.
Let's discuss the state of the college economy and how you can pay for education with minimal debt.
Rising costs and college debt
Image via Flickr by Got Credit
The cost of a college education in Canada rose around 40% between the 2006-2007 and 2016-2017 academic years. But why are the costs of secondary education rising?
A study by the Canadian Centre for Policy Alternatives found that government financial support for colleges and universities declined by 22%.
This coincided with the college boom where more and more young people are required to have a degree to get a job. This has caused students to shoulder more of the burden.
With students shouldering the financial load of their education and institutions, we are now in a post-college debt crisis. It is the largest civic debt crisis in history, even accounting for inflation.
Registered education savings plan
An RESP, sometimes referred to as an education savings grant, can be started at the birth of a child by anyone with familial ties.
These are investment accounts that allow you to make monthly or yearly contributions. The money can be invested into stocks, bonds, or mutual funds among other options.
There is a maximum RESP balance of $50,000 which will cover most students through their graduate degree.
The money is paid out once a student is enrolled in an accredited educational institution.
These plans are an excellent option because the contributions are pre-tax, investment gains do not generate capital gains tax until withdrawals have begun, and the student's income bracket is usually low enough that any applicable taxes are minor.
Scholarships and grants
Students should start applying for scholarships and grants during their junior and senior years of high school.
Spend at least a few hours a week applying for every applicable scholarship. Both parents and students can work together to build compelling application essays that highlight any hardships, struggles, achievements, or other notable life events.
Consider volunteering, community service, or a part-time job that gives you valuable life experience that can be added to your application.
Work through school
As a high school student, look for jobs that will allow you to work part-time during the school year and increase your hours during the summer.
This can give you valuable life experience and help you start building a savings cushion for college. It will also help you build your resume early and figure out what kinds of work environments you like.
During college, consider signing up for a work-study program. These programs allow students to work on campus, potentially in a field related to their degree.
This helps offset the costs of college while giving you work experience to add to your resume with minimal commuting.
If work-study isn't an option for you, look for a part-time job near your college that will be flexible with your schedule so that you can study.
Paying for college and assuming a mountain of debt is a stressful equation to balance. With these tips, you can pay for college while accumulating as little debt as possible