Canadian parents want to pay for children's post-secondary education, but can they?

- TD Canada Trust Education and Finances Survey reveals how parents and students are financing school -

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TORONTO, Aug. 16 /CNW/ - Canadian parents agree that a post-secondary education is important for their children and they feel good about helping to pay the cost. However, according to the TD Canada Trust Education and Finances Survey, there appears to be a gap between what parents want to do and what they might be able to afford. While 87% of parents say they plan to pay all or part of the costs of their child's post-secondary education, 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. "Visit your bank and 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 percent plan to pay for all of their child's expenses.

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

Seventy percent 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 percent 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.

How much education do children need to be competitive?

Canadian parents are pragmatic about post-secondary education with 44% saying that practical training at a trade school or a college degree is what their child needs to be competitive in the marketplace. Thirty percent of parents believe their children need an undergraduate degree, 21% say a masters degree is necessary and 5% feel their child needs a doctorate level degree. Not surprisingly, parents with a high school or college education are most likely to conclude their child needs a trade school or college degree and parents with a university degree are most likely to believe the same is needed for their child.

About the TD Canada Trust Education and Finances Survey

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, 2010. 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, 2010.

About TD Bank Financial Group

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in North America by branches and serves more than 18 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks among the world's leading online financial services firms, with more than 6 million online customers. TD Bank Financial Group had CDN$574 billion in assets on April 30, 2010. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.