For most Canadian families, helping kids pay for school is a shared task. Parents may set up an RESP or other savings plan, while their kids may make use of part-time and summer jobs along with scholarships and bursaries to pay for education. Any shortfall may be made up through borrowing (usually student loans). However, the earlier the planning by both students and their parents, the less likely a student will accumulate debt in order to pay for school.
Here are five ways you can help your kids pay for school:
1. Talk to your kids
Include your kids in the post-secondary funding equation. Talk to them about how much you as a parent can contribute to their education, and how much you expect them to fund. This may include setting up an automatic savings plan for them to set aside a portion of their earnings from summer and part-time employment.
2. Help your kids apply for scholarships and bursaries
Scholarships and bursaries are a best option because they don’t have to be repaid and are tax-free. And they aren’t strictly for A+ students – many also look at other non-academic characteristics, such as leadership roles and community involvement. Take advantage of online scholarship search engines to narrow down your search based on your child’s proposed area of study and selected criteria.
- trade unions
- service clubs
- religious affiliations
- cultural organizations
- family connections
3. Open an RESP and take advantage of education grants
B.C. families have the opportunity to access a total of $8,400 in RESP grants per child, while low-income families can access $10,400 per child (including $3,200 that requires no contribution in order to claim it) through the Canada Learning Bond and British Columbia Training and Education Savings Grant. The only catch? You must open an RESP.
4. Create a savings plan for your kids
Your children can also start saving for college or university early. One idea to motivate your kids is to match dollar for dollar whatever they save. In this matching scenario, spending $100 on clothes means they would lose out on $200 for their education fund.
5. Find the right work/school balance
According to a recent report by Vancity, 64% of B.C. post-secondary students work part-time. While this is a great source of saving and spending money, research has shown that too much work can impact a student’s grades. If your child has an eye on scholarships, consider whether it’s a better financial move for them to forgo the extra income waiting tables or making sales on the retail floor in order to focus on studying to get good grades.