Canada needs to rethink the finances of post-secondary education, writes Peter Watson.
How do we afford post-secondary education?
Parents of children in high school start to think of the future cost of education. College is less expensive, and those students often live at home. University is more costly.
A four-year degree with your child not living at home could cost $25,000 annually, so over four years that is $100,000. If there are several children that continue with their education, it can become very expensive.
Parents often hope to assist with undergraduate expenses, but any further education would be the responsibility of their children.
After graduation many parents and their children are left with a large school debt. For parents, those are the years before retirement when their financial focus is on their ability to afford a desired retirement lifestyle. It’s not a great time for parents to assume educational debt.
For the new graduate, life with school debt can be challenging. Jobs are harder to get. Your four years of knowledge might now be able to be surpassed with a few seconds of AI computing. Add housing costs and that is a very difficult start to their adult life.
This is not meant to discourage the pursuit of education but an acknowledgement that financial considerations for parents and their children should be part of the planning and decision-making process.
I think the solution is a combination of parents, students and government financial support. Students with the ability and desire must be encouraged and financially able to pursue their education.
It is better for the students. Plus, it makes Canada stronger.
Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through www.watsoninvestments.com
