B.C. kids expected to pitch in to cover the cost of post-secondary education

- B.C. parents are the least likely in the country to feel responsible for the cost of their child's post-secondary education -

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VANCOUVER, July 19, 2011 /CNW/ - If B.C. students think they're getting a free-ride when it comes to the cost of their post-secondary education, they should think again. According to the TD Canada Trust 2011 Education and Finances Survey, B.C. parents are most likely in the country to admit they don't plan on contributing to the costs of their children's post-secondary education (12% versus 4% nationally).

For those parents who do plan on contributing to the costs, the majority plan to pay for most expenses but expect their kids to contribute from earnings from a summer job (50%) or plan to cover essentials like tuition, books and rent but the rest will be up to their child (30%).

"Next to saving for retirement, one of the biggest financial challenges the majority of Canadians will face is saving for their children's education," says Shahz Beig, Associate Vice President, Personal Lending, TD Canada Trust. "For university and college students living away from home, the cost of pursuing an undergraduate degree is approximately $80,000, so it's no surprise B.C. parents aren't planning on incurring the entire cost."

The survey found that six-in-ten B.C. parents with children under age 18 have started saving for their children's post-secondary education, but 22% anticipate that they'll only be able to contribute less than 10% of the cost.

"If your child is heading to university or college this fall and you haven't managed to save enough money, there are financing options available to your child such as government loans, scholarships, bursaries and grants. To assist with any financial shortfall, they may also qualify for a student line of credit from their bank. This is a smart way to ensure students have access to money for things like books, tuition and rent - at a lower interest rate and longer repayment term than a loan or credit cards," says Beig.

Baby's college funds grow in popularity

Interestingly, it's the newest Canadian parents who take home top marks when it comes to saving early for their children's education.

Seven-in-ten parents who have children eligible in 16+ years to attend post-secondary education (71%) have already started saving, compared with 55% of parents whose children are eligible now, 57% who will be eligible in 1-5 years, and 60% who will be eligible in 6-10 years. Nine-in-ten (89%) parents under age 35 started saving for their child's education shortly after their birth, compared with only 60% of parents currently aged 45-54 and 80% of parents aged 35-44.

"It's great to see new parents starting to save earlier for their children's education. Even if you don't have a lot of money to save, be diligent about putting away a little bit with each pay cheque into a Registered Education Savings Plan (RESP) and take advantage of tax deferred growth," says Beig. "And if you haven't managed to save enough when your child is ready for post-secondary study, there are flexible and cost effective options that can help fill the gap, like a student line of credit."

In B.C., the majority of parents with children under age 18 plan to finance their children's post-secondary education with an RESP (62% up from 51% in 2010). Those expecting their child to take out a student loan has increased over last year (29% versus 25%), and only 9% plan on using a student line of credit.

Saving is a team effort

When it comes to saving for their post-secondary education, B.C. parents are counting on their kids to chip in - but not as much as last year. Many expect their children to work to pay for their post-secondary education (35% versus 40% in 2010), secure a scholarship (30% versus 41% in 2010), and get a student loan (29% versus 25% in 2010).

"Opening a student line of credit gets your child involved in contributing to the cost of their education, and it's a good first step to help them establish financial responsibility and build a credit history," says Beig.

For more information and advice on how to pay for school and manage student finances, please visit http://www.tdcanadatrust.com/student/index.jsp

About the TD Canada Trust 2011 Education and Finances Survey

The TD Canada Trust 2011 Education and Finances Survey polled a representative sample of 640 Canadian parents of children aged less than 18 years, including 80 in B.C., through a custom, online survey. The survey was conducted by Environics Research between June 10-20, 2011.

About TD Canada Trust

TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches - most open 8 'til late and many now open Sunday. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.