When I graduated from high school 21 years ago, university was the undisputed path to higher earnings and professional success. Alternatives such as a gap year, college, trade school, or going straight into the workforce weren’t actively encouraged by my parents or pursued by my peers.
So when my two children were born, in 2021 and 2023, I opened a registered education savings plan (RESP) for each of them, assuming they would get a university education like I did. After all, RESPs are a no-brainer for parents, since any invested income gains are tax-sheltered and the government will match your contributions to the account with up to $500 of free money a year. And RESPs can also be used for expenses related to colleges, trade schools and apprenticeships.
But the world is changing, and I’ve started to think about what role higher education will play in our daughters’ lives. And it’s left me wondering: What is the opportunity cost of spending six figures on university education versus something else? Would I be better off building a “start a business” or “buy a home” fund for them instead?
Maybe by the time our girls graduate high school, they won’t need a university degree to boost their earnings or hiring potential. After all, skills-based hiring – looking at experience or capability, not your degree – is becoming more common across many professions.
In the future, I expect employers will be more open to non-traditional backgrounds, and that minimum educational requirements will be removed for many roles. As an employer, I care more about resourcefulness and skills earned in prior roles when hiring.
There will also be shifting needs in the labour market, thanks to demographic trends and changes in technology. Ontario is trying to address a projected gap in skilled trades professionals, with educators fighting to dispel old stigmas and offering incentives to attract high school students to the trades.
And while it’s tough to predict how artificial intelligence will truly impact the labour market in the next 20 years, it’s clear it will replace some jobs, create new ones and shift human responsibilities, whether white-collar or blue-collar.
Maybe our girls will eschew higher education completely for the now-viable job title of entrepreneur. These days, it’s not just acceptable to take a different path such as starting a business, it’s often celebrated, with billionaires such as Mark Zuckerberg famously succeeding as college dropouts.
My husband and I scrambled to raise roughly $100,000 in funds from friends and family to launch our business. If our parents had given us a cheque for that amount, it would have kept us from relying on our personal credit cards to run our business, from diluting our ownership, and saved us time pitching investors.
As an almost-40-year-old entrepreneur, I can also say it’s much easier to take the risk of starting a business when you have no mortgage, no kids, and very few financial and familial responsibilities. If I had started a business at 19 instead of 32, how would my net worth and my network be different?
Maybe I can help my kids build their wealth through buying a home, not paying for their education. After all, the cost of postsecondary education has never been higher.
Tuition costs vary depending on the school and what they study, but on the low end it’s over six figures for a four-year degree when you factor in tuition and living expenses. That’s hard to reconcile when you can learn to code using an online course platform for a fraction of the cost.
If I took $100,000 and gave that to my kids when they turn 18 to buy a home, it could be the base of building their wealth outside of a traditional 9-to-5 career. It pains me to think about the rent I paid in Ottawa while I went to university and while I worked in Toronto before I saved enough to buy a condo. Did my university degree give me more value than buying a home in 2003 would have?
Whether you’re saving for your kids’ education or not, it’s clear that the job market they’ll enter in the future will be very different from today, so getting a leg up – whether that’s through connections, experience, entrepreneurship, or education – will be crucial.
Ultimately, the biggest gift I can give our girls is choice: the ability to decide on the best path, and the support for a path that doesn’t include postsecondary education. For now, I’ll keep growing our daughters’ education savings funds, but if they decide to instead start a software company like their mom, I’ll be proud, not disappointed.
Erin Bury is the co-founder and chief executive officer of online estate planning platform Willful.co. She lives in rural Ontario with her husband and two young children.