Parents to cover half of university costs for kids

Parents plan to cover close to half (42%) of the university or college expenses of their kids, says a new BMO study. They’ll pay for tuition, and for items such as books and living expenses.

Read: Half of post-secondary students go into debt

Students’ remaining balances will be covered by:

• federal and provincial student assistance (18%);
• savings (17%); and
• scholarships (11%).

Also, though fewer than half of parents (46%) want support from family and friends to help finance kids’ schooling, the majority (52%) wish people would offer to contribute to kids’ education savings rather than giving graduation gifts.

Read: Students will need to work to cover costs

That’s mainly because most (79%) are worried about the rising cost of post-secondary education.

“The total, current cost for an undergraduate university degree can exceed $80,000,” says Robert Armstrong, vice president and head of managed solutions at BMO Global Asset Management. The mount is “expected to surpass $140,000 by the time a child born in 2014 is old enough to enrol.”

Read: Boomers worry about outliving savings

As such, two-thirds (66%) of parents have already started RESPs for their children, up from 52% in 2012.

Read: Target creating dorm-outfitting registry

The study also examined parents’ non-financial university concerns of parents. They’re worried about students not:

• getting jobs after graduation (75%);
• maintaining good grades (67%);
• having a good overall experience (63%); and
• staying focused on school (60%).

So “parents have enough to worry about when they send their kids off to school without having to think about how they’re going to pay for it,” says Armstrong.

Read: Help clients’ kids find scholarship money

Regional breakdown of results

Region	% of post-secondary education bill parents are paying	% concerned about rising cost of post-secondary education	% concerned they won’t be able to afford to help	% who have RESPs	% who are concerned about kids’ job prospects
National	42	79	70	66	75
Atlantic	32	86	79	58	86
Quebec	38	79	59	53	47
Ontario	46	79	71	75	85
Prairies	39	75	74	59	85
Alberta	43	76	73	74	79
B.C.	44	81	75	67	83

–

NOTE: Survey results cited in this report are from a Pollara survey commissioned by BMO Global Asset Management. Results were collected via online interviews with 1,000 Canadian parents who have children under the age of 18. The poll was conducted between August 5^th and 8^th, 2014, and the margin of error for a probability sample of 1,000 is ± 3.1%, 19 times out of 20.