You’ve opened an RESP, you top it up and invest the money – so you feel confident that you’ve got things under control. But figuring out exactly how much your kids’ education will cost is tricky and the reality is that you probably won’t know the final amount until just a few months before the bills start coming in.
Things become clearer as your kids get older, especially when they get to high school and you begin to see what path they might choose. And for those with kids in grade 12, things start to get very real as they evaluate their options.
My son is looking at university programs and I’ve been poking around various postsecondary school websites. Needless to say, there have been a few surprises. The estimate of the costs I had in my head doesn’t align with some of options he’s looking at and I’m starting to try to pin down exactly how much more he may need.
The biggest driver of the cost difference is tuition. Program costs vary, sometimes by a lot. Looking at a random selection of five universities – the University of British Columbia, the University of Waterloo, the University of Toronto, Dalhousie University and Queen’s University – the tuition for an arts program will cost $7,522, on average, for the 2024/25 school year.
But other programs can run a lot more. For example, the average engineering tuition is $12,789 per year and a business program is $10,560 a year. The tuition for the first year for engineering at the University of Waterloo is $18,000 a year while for a business degree at Queen’s University it will run you $16,400.
You also need to look beyond the first year. In some cases, the first year or two of a degree can have different tuition costs than the subsequent years – and usually the tuition is higher in the later years. For example, at the University of British Columbia the first year of tuition for the commerce program is $5,960, but for years two, three and four it’s $8,832. That’s $8,616 more than if you had multiplied the first-year rate by four years when making your cost estimate.
Tuition fees can also be higher for students who live outside of the province in which the university is located. At the University of Waterloo, for example, it will cost an extra $1,000 per year for the computing program for students living outside of Ontario. Many other schools and programs, including schools in Quebec, have similarly higher fees for out-of-province students.
In addition to tuition, there are also incidental and ancillary fees. These fees include things like health and dental plans, transit passes, student services fees and program-specific add-ons. Some of these fees are compulsory and some are optional so it’s important to check if you need them. These extra fees vary between schools and even programs but you can expect to add somewhere around $2,000 a year to the cost.
Many of the university websites have a fee estimator tool that will help you add up all these the expenses. Or you can use your own system, whether that’s a piece of paper or a spreadsheet. Here is an example using the commerce program at Hamilton’s McMaster University, my alma matter.
Looking at variations of these costs, a student doing an arts degree at the university can expect to spend about $13,350 less over four years, while an out-of-province commerce student will need to add about $4,800. Those are significant differences.
If your child is leaving home to study, there are other expenses you will need to tack on to get the most accurate picture possible – things like plane or train tickets for visits home and, of course, spending money.
Sadly, there’s no easy way to know ahead of time what your child’s education will cost. The important thing to note is that the cost of an engineering degree is not the same price as a general arts degree or a business degree. The best parents can do is save as much as they can ahead of time, make a plan with their child for sharing the cost, and refine the estimate as the time gets closer.
Anita Bruinsma is a Toronto-based financial coach and a parent of two teenage boys. You can find her at Clarity Personal Finance.
