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The Canadian Foundation for Economic Education
and
The Building Futures Network
present
“Key Things to Know about the Cost of Post-Secondary Education”
Government of Canada Survey (1999) – www.canlearn.ca
• The average cost of mandatory supplies and equipment for college and trade schools runs between $50 to $5,000.
• Schools are increasing fees for programs that may offer a larger financial payback upon graduation, such as medicine, law, engineering, and dentistry.
Government of Canada Survey (1999) – www.canlearn.ca
• The following chart, from the Canadian Bankers Association, shows estimates for the total cost of schooling – as well as what it would take in terms of monthly savings to be able to cover those costs.
• Note how important it is to start saving early. By starting earlier, you can reduce the financial pressures considerably.
About the Charts:
The charts are estimated costs based on today's average education cost of $4,000 a year for a student living at home and $10,000 a year for a student living away from home.
• Figures represent the average between university and college students' median spending for tuition, fees and expenses. (From Statistics Canada, 2003).
• Cost of post-secondary education includes tuition fees, books, supplies and non-educational expenses such as computers, utilities, transportation, etc., and in addition, room and board for students living away from home. (All figures rounded.)
• A 5% annual increase in education costs (which takes into account inflation), four years of post-secondary education and a 5% annual pre-tax rate of return on investments are assumed.
• Calculation assumes no additional investments once the child starts college/university.
Source: TD Bank Financial Group
Source: Survey of Approaches to Educational Planning (SAEP) (www.statcan.ca/daily)
What Does It Cost to Go to College or University?
When you go to a college or university, your costs each year may include:
- Application fees- Tuition fees- Extra fees- Books and student supplies - Living costs- Transportation - Health Insurance - Other costs – e.g., Athletic Fees, Student Union
Fees
Let’s take a quick look at each.
Application Fees
• There are costs associated with applying to post -secondary institutions.
• A number of factors affect these costs.
• Check with school Guidance staff to determine the costs associated with applying to various institutions.
As an example, the typical cost for a student to make application to three universities (through an application centre) is approximately $105. This fee is non-refundable.
Tuition Fees
• Tuition fees vary widely depending upon a number of factors:
- the institution chosen
- the selected program of study
- the length of the program
• Check the course calendars of the selected institution for the current costs of the desired program. You can usually find these easily online at the institution’s web site
Extra Fees
- these are likely to be listed in course calendars
- they will be specific to the institution and program of study
- they vary depending upon course equipment and materials
- these will usually be available on the institution’s web site
- these are often a major expense and usually run into the hundreds of dollars
- the cost will vary by program
- save money by:
- buying second-hand books - watching for used-book flyers - borrowing from your friends or family- buying online
Textbooks
Supplies
- depends a lot on the program of study
- includes such things as paper, pens, calculators, binders, computer supplies, print cartridges, etc.
- could also include specific equipment necessary for the course
- this is an area of expense that is often overlooked, and it can be quite costly over the course of a year
Living Costs
The least expensive housing option is often to live at home while attending a post-secondary institution.
If that is not possible, consider other options that may help to reduce the cost such as:
- living with a relative
- living off campus (other expenses arise though such things as transportation)
- sharing accommodation with others
- living in a student co-op
Transportation Costs
These vary according to each situation. It can include:
- public transit- automobile upkeep- parking fees- carpooling costs - purchase of bicycle or other form of transportation
Health Insurance
Students are required to have health insurance while studying. The circumstances of the coverage and the costs need to be investigated and included in costs.
Other Costs
These can include:
- Athletic fees
- Student Union fees
- Other institution fees
- Costs vary but can total $600-$800 or more per year
Note: Some of these fees may be recoverable but would mean loss of opportunity for participation.
Some tips to help you create an accurate budget
1. Determine your fixed costs, such as tuition, rent, and utilities.
2. Estimate variable expenses, such as food, laundry, clothing
and entertainment.
3. Don't overlook one-time expenses, such as trips home, gifts, books, and course materials.
4. Include your "small" expenses, such as coffees, snacks, magazines, etc.
5. Don’t mistake wants for needs.
Source: The Student Zone (www.teucu.com)
The Value of Compound Interest
In terms of planning your savings to cover the costs of post-secondary education, one rule to know is…
The Rule of 72
Divide the number 72 by the interest rate you earn each year and that’s the number of years it will take to double your money
Example: $5,000 invested at 6% per year will take 12 years (72 divided by 6) to double to $10,000.
A Budget For Post-Secondary Education Costs
To learn about building a budget, visit any of the following web sites:
- www.buildingfuturesnetwork.ca
- www.investored.ca
- www.articles.moneycentral.msn.com
