Canadian education savings then and now: the rise in popularity of post-secondary education and RESPs

The last 100 years have seen major transformations in what education after high school looks like in Canada. From small student populations and religious influences, strict codes of conduct and systemic barriers to attendance, early Canadian universities and colleges provided limited accessibility and opportunity. But the impacts of the two World Wars, the establishment of our public education system, and taxpayer funding for post-secondary institutions opened up universities and colleges to more young adults across the country.

Over the last century, as more and more students began pursuing post-secondary education in Canada, the ways that families were saving and paying for those tuition fees became a national conversation – discussions and developments that impacted today’s options for attending and funding our kids’ education after high school.

Education back then: highlights of post-secondary options and education savings in the 20th century

Our country’s earliest degree-granting universities were founded as far back as 1663 with the opening of Laval University in Quebec, and followed in the late 1700s and 1800s with a handful of English universities in Ontario and Eastern Canada.

Fairly strict and religiously influenced, these first post-secondary schools were small, with only as many as 100 students per university (Canadian Encyclopedia). With such a small proportion of the population attending university, funding and financial aid were not considered a major social consideration.

But fast-forward to the post-war era of the 1940s, when Canada began to experience a boom in post-secondary education. In response to economic changes, the government recognized the need for a skilled workforce and implemented policies to increase funding for post-secondary institutions.  As a result, attendance in universities rose to 5 percent of the population of young adults aged 18-24.

The 1950s and 60s then saw the baby boomers coming of age, and the number of post-secondary institutions grew to keep pace with demand: the student population in universities doubled twice in this time period and new charters were granted by the government to open more universities and colleges across Canada (Canadian Encyclopedia).

Not surprisingly, with an ever increasing importance placed upon post-secondary education there was a corresponding dramatic increase in the number of Canadian families wishing to send their children to university and college.  The ability for parents to save and pay for tuition became a national issue to solve.

First, financial aid was introduced in Canada in the 1960s in the form of student loans. Then in 1974, the Canadian government introduced Registered Education Savings Plans (RESPs) into federal tax legislation as a dedicated tax-sheltered savings vehicle for post-secondary education – a game-changer for Canadian families.

Education and savings today: the RESP advantage

Today, students have plenty of options for education after high school. With so many universities and colleges across the country, and online and distance-learning programs, cost is often the only barrier to a post-secondary education. Tuition fees vary greatly between programs, colleges and universities, and between the different provinces – with the costs being higher for out-of-province and international students.

According to Universities Canada, tuition costs in Canada currently range anywhere from $3,000 to $8,000 per year for college or university, depending on the province or territory – not including costs for room and board. And according to CST Consultants Inc., it’s predicted that by 2036, the cost of post-secondary tuition in Canada could be as much as $84,000 over four years for a university degree, or $146,000 with room and board factored in.

With these kinds of current and potential future costs of education, the best strategy for parents in Canada is still the RESP. Still the only dedicated savings vehicle for education, RESPs allow families to start early, save money tax-free in the plan, and access those funds when their child needs it after high school. Plus, an RESP also benefits from access to government grants, making it even easier for today’s families to reach their education savings goals.

And while there are many different public and private scholarships, bursaries, loans and grants available today that students can apply for, an RESP continues to be the best choice to help students graduate without the burden of large student loan debts.

Starting an RESP: easy, effective

These days, opening an RESP is easy: most financial institutions can start one for you, including any bank, investment advisor or money management firm. And group RESP companies like CST Consultants Inc. specialize in offering RESP accounts to help investors create their post-education savings goals and plans.

And importantly, RESPs continue to be a flexible option for families. Anyone can open an RESP and contribute to it on behalf of a beneficiary. You can also open an account and contribute only what you can to start growing your education savings. When your student is ready to access those funds for an education after high school, you can use your RESP almost anywhere – in Canada and around the world.

At the end of the day, savings vehicles like RESPs continue to be essential for families in our modern era. Today’s job market requires degrees and specialized skills that come from higher learning, and families continue to be served best by starting early and planning ahead to fund that type of education after high school.

So if you want to get started on an RESP, visit CST website for a step-by-step approach that makes modern education savings easy, effective and safe – something families today can all use a little more of.

Carmen Kinniburgh

Carmen Kinniburgh is a freelance writer and editor exploring topics and ideas about parenting and families, Canadian science and research, health and medicine, as well as travel and lifestyle. Born and raised in Alberta, Carmen has also lived in Southern Ontario and Manitoba, where she worked in professional communications for a university and a national health charity. Currently living in Thunder Bay, Ontario, she gets all her best ideas and insights for Parentwise from her own three delightfully precocious children.

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