Gigi Suhanic
April 24, 2024
The cost-of-living crisis is putting some Canadian parents in an untenable position when it comes to financing their children’s post-secondary education, with a majority indicating they are willing to go to the financial wall to give their kids the leg up they believe higher learning can provide, a new survey suggests.
iStock-613027616
So strong is the belief that higher education is critical to success, that 66 per cent of parents would go so far as to put off retirement to help their child pay for university or college, while 57 per cent indicated they would be willing to take on debt to shoulder some of the costs. The data comes from a survey conducted by pollster Leger for Embark Student Corp., an education saving and planning company that manages approximately 600,000 registered education savings plans with $6.3 billion in assets under management.
“Nearly two-thirds of Canadian parents believe supporting their child is more important than their own financial health,” Embark said in a press release.
Delayed retirement and debt are sacrifices parents are contemplating in the future. In real time, some are already on a financial knife’s edge, as 55 per cent indicated they have had to eliminate some day-to-day “necessities” to help their kids financially and 43 per cent said they will have to go into debt to help their offspring cover the cost of education.
Those costs are significant.
Undergraduate education in Canada costs roughly $30,000 per year depending on where you are in the country, according to Embark.
The Government of Canada estimates tuition fees alone can range from $2,500 to $11,400 per year, based on the program and school the student is attending.
Elevated inflation and higher interest rates have put the squeeze on education savings. Three-quarters of parents surveyed said “that with prices and the cost of living going up, they found it hard to save for their child’s future.” And 46 per cent said they had stopped saving for their child’s education, leaving 61 per cent to worry “that they have not saved enough” to send their child to school.
Besides any potential family hardships, parents are also experiencing elevated levels of stress in the face of the looming struggle to get a child through post-secondary school, the Embark survey said.
“Education savings not only has a financial impact on parents, but it can become a serious emotional burden,” Embark said.
For example, 54 per cent of parents are “dreading” having to pay for their child’s post-secondary education. At the same time, 70 per cent worry about the amount of debt their child will be saddled with from the cost of education.
Student debt poses a significant financial burden.
Statistics Canada data from 2020 said 47 per cent of students owed debt at the time of graduation. The average amount of debt students were shouldering at the time of graduation was $25,000, while 31 per cent of graduates had more than $30,000 of student debt.
Three in four parents believe that post-secondary education is critical to their child’s success and that their child’s options will be “limited” if they don’t help with costs.
“Today’s parents are watching their children grow up during a difficult job market and volatile economic conditions, and they see how higher education can provide security for young adults,” Andrew Lo, chief executive of Embark, said in a press release.
Leger and Embark polled 1,000 Canadian parents with children under the age of 18 between Feb. 21 and March 4, 2024.
