Canadian parents agree that a post-secondary education is important for their children and they feel good about helping to pay the cost. However, there appears to be a gap between what parents want to do and what they might be able to afford.

According to the TD Canada Trust Education and Finances Survey, 87% of parents say they plan to pay all or part of the costs of their child’s post-secondary education, but 26% say they have yet to start saving and another 15% have no idea how they will finance it.

Additionally, 10% of parents surveyed say they plan to use either credit cards or their line of credit to pay for their child’s education.

These findings from parents are interesting compared to responses from Canadian post-secondary students, which show that students are active participants in paying for their education. Half of respondents are working this summer to help pay for school, and 66% of those say they will not earn enough money to cover their expenses. Students are relying on student loans or lines of credit (44%) and RESPs (27%) to help them through school. Not surprisingly, two-thirds of students expect to be in debt when they graduate, with 30% projecting they will owe at least $15,000.

“While the long-term benefits of a post-secondary degree are significant, so is the price tag,” says Lawrence Engel, vice president, personal lending, TD Canada Trust.

“If parents have children starting school in September and they need help with the costs, there are options available to help them. Financing tools specifically designed for students, like student lines of credit, will help ensure students can get the help they need while in school without parents incurring the shorter repayment terms and higher interest rates associated with some loans, lines of credit or credit cards.”

What does post-secondary education cost?

A report by TD Economics showed that in 2009, the cost of a four-year undergraduate degree was more than $80,000 for students living away from home. How can parents help their children if they have not saved this significant sum of money for each child?

“Ideally parents should start putting money away for their children’s education when their kids are young but if they haven’t saved, or saved enough, there are flexible, cost-effective options that can help,” says Engel. He suggests parents talk to a professional about the financing solutions available for post-secondary education.

How much are parents contributing?

The TD Canada Trust Education and Finances Survey found that nearly half (48%) of parents say they will pay for most of their child’s education, and one-in-three (29%) parents say they will pay for the essentials like tuition, books and rent, but expect their child to pay for all other expenses. Ten per cent plan to pay for all of their child’s expenses.

How much do parents feel their children should contribute towards their education?

Seventy per cent of parents say that while it is important that their children contribute towards the cost of post-secondary education, they feel good about helping them out too. Twelve per cent of parents say that they feel it is their responsibility to pay for their child’s education and another 12% say it would be a good experience for their children to pay their own way.

Results for the TD Canada Trust Education and Finances Survey were collected through two polls. The first was a national survey of 600 Canadian parents conducted by Environics Research between July 15-19. The second was a national survey of 1,001 adults aged 18-24 who are currently enrolled, plan to be enrolled or were previously enrolled in the past two years in post-secondary education. This data was collected by Environics Research between July 13-23.

IE