Many parents are missing the mark when it comes to saving for their kids’ educations, according to an ATB Investor Beat survey of Alberta parents.
The quarterly survey by ATB Financial, released July 11, found that 19 per cent of Albertans are saving for a child or grandchild's education, yet only half believe they'll be able to save enough to cover the total education expense.
The survey also found that only 10 per cent of Albertans are saving for their own education, with half of current students or recent graduates being dependent on other sources to cover education costs, such as student loans or lines of credit.
Potential for enormous debt
"Albertans may want to consider education savings a priority early on to avoid saddling their children with an enormous amount of debt when they graduate," said Chris Turchansky, president of ATB Investor Services. "By starting a savings plan early, even before their child begins elementary school, parents can reduce the burden of debt to pay for higher education."
Forty-eight per cent of respondents expect a four-year degree, while living away from home, to cost between $50,000 and $90,000. To cover these costs, over half of current students or recent graduates who responded expect to incur $20,000 to $35,000 in student debt.
Consult an advisor
The survey also revealed that of those who have student debt, 78 per cent have not spoken to a financial professional about how to pay off their education costs sooner.
"If you're trying to balance investing and saving while paying off a student loan, talking to a professional advisor and creating a financial plan can help you manage conflicting financial priorities that may seem overwhelming," said Turchansky.