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Paying for school

While some parents' biggest worry about sending their kid off to university or college this fall will be how long they should wait before renovating the bedroom into a rec room, others will be wondering how their child is going to manage the financial requirements of post-secondary education.

With a 2004 Statistics Canada survey finding that over half of graduating students are in debt, there's good reason to be proactive and help your child set off in the right direction.

Richard Haggins, Toronto-based manager of education at InCharge Debt Solutions Canada, a non-profit service that operates through Credit Counselling Canada, suggests parents help their kids to avoid ending up in a difficult situation. "A lot of young adults will run back to their parents," he says, noting that today's job market is tougher for new grads than it was generations ago.

For many students, post-secondary school ends up costing more than they anticipated. "I found paying for school very daunting," says Sarah McIntosh, a recent graduate of the University of Western Ontario in London, Ont. "From a year-to-year perspective, you don't think about how it is adding up...but when you finish, it's such a large number."

According to Statistics Canada, the average cost for a year of undergraduate study at a Canadian university in 2010/2011 was $5,138, up four per cent from the previous year. While college fees tend to be lower, education is by no means cheap.

Along with the cost of tuition, there are major living expenses associated with going away to university or college. For example, one year living in a traditional-style, double occupancy dormitory with a medium meal plan at the University of Western Ontario costs $9,545, according to the university's Division of Housing & Ancillary Services website.

Course fees, textbooks and spending money only contribute further, making it likely that a student will need to borrow money. "Student loans are going to be a reality and I don't see that changing," says Haggins. "It's just a function of how expensive [post-secondary education] is."

For students looking to fund their education, the best tactic is to start early, first considering options that don't have to be repaid. Using money from relatives and savings is an obvious place to start, but many students don't tap into other ideal sources, namely grants, bursaries, and scholarships.

(continued on next page)
-- Posted August 24, 2011
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