Three quarters of Canadian students believe they will need to supplement their education with further training after finishing their degrees, despite spending an average $14,000 a year on their educations and graduating with $30,000 of debt, according to a new poll by CIBC.
Forty-one per cent of students do not have any savings, and 67 per cent do not have a registered education savings plan (RESP).
A detailed budget and financial plan
"Students are telling us that they're worried about finding a well-paying job after graduation, and the need for more training and higher costs of some degrees is adding to the already high education bill," says David Nicholson, vice-president, CIBC Imperial Service. "The key to success is having a detailed budget and financial plan that takes you from your schooling to your earning years. Parents can help by building savings early on, and helping students understand how to manage their money and borrow wisely."
More than half (55 per cent) of students expect to graduate with debt. About a quarter (24 per cent) of students do not know how much they will spend each year, and 27 per cent are unsure how much they will owe upon graduation.
RESPs offer tax-free accumulation of savings
Nicholson says these findings reveal why RESPs are beneficial to students. "The big advantage to a RESP is the tax-free accumulation of savings combined with the added benefit of government grants," he says. "It's a powerful combination, and every little bit can add up to a significant amount over time to help with your child's education."