Children and Post Secondary: Why We Might Not Pay For All Of It

Knowing the financial mess one can end up in from not having a savings plan for post secondary education first hand, hubby and I opened a RESP for our daughter when she was 5 weeks old. I remember the representative going through the projected education costs for when she’s ready to graduate and was blown away. How can universities justify such an insane inflation?

This week a local news story came out about the rising costs of tuition in Canada. Tuition has increased 5% this year alone. Holy Cow.

At this rate, when baby girl is ready for post secondary, in 18 or so years (should she chose university/undergraduate degree), we’re looking at over $12,000/year. That’s assuming she lives at home and hasn’t factored in books or any other added expenses.

Hubby and I have every intention of continuing regular monthly contributions, plus additional savings when she receives money as gifts and such, but we have no intention of stretching ourselves thin financially for her educational savings. When the time comes and have have more money for saving (vs debt payoff) investing as much money as possible into our own retirement savings is more important than throwing additional money into her RESP.

In a perfect world she gets a part time job when she turns 16 and learns the importance of saving for things that she wants, education included, but despite the finical mess I’m in, I have no problems with student loans and (student) lines of credit. Very rarely in life does the opportunity to borrow at such low interest rates come up, and with proper money management and budgeting skills could be a smart move. I truly believe that if there is some financial responsibility in your education it encourages you to work harder. For this reason if our savings isn’t enough to cover her I’m not going to worry about it. By the time she goes off for school she’s guaranteed to have learned good money management skills-a promise I make for her-and can properly manage a little credit in her name.

I have friends who insist on having enough savings for any and all education their child may pursue, even if they chose something like medicine or dentistry.

Just an FYI this year’s tuition costs for these programs:

Dentistry students paid the highest average undergraduate fees at $16,910. Medical students paid an average of $11,891 and pharmacy students paid $10,297.

Read it on Global News: Global Maritimes | Undergrad tuition up five per cent this year, more than triple inflation

At the 5% inflation we’re looking at almost $41,000/year for dentistry in 18 years…Just sayin’.

Maybe I’m a mean mom, or totally alone on this, but if we’re fortunate enough that our child can get through Medical or Dental school, I’m pretty sure they won’t have much problem paying off the degree, that’s for sure.

For those with children, who are saving for their post secondary education? Who is prepared to pay for 100% of it, regardless of academic pursuits?

 

Advertisements

Are Undergraduate Degrees A Way Of The Past?

I recently read a great post over at The Outlier Model about wanting a job in the science field. I started to reply and quickly realized I was writing a book for a reply so decided to do a post about it instead.

First, head on over and read the above blog post, it’s a fantastic post about the realism behind getting a job in the scientific community (biology mainly but applies to chemistry and physics as well).

I have two university degrees, my first being a BSc in Biology. I really can’t say any education is wasted because it’s not but unfortunately good education isn’t free. If I could turn back time I would never, ever, ever, ever go into a ‘basic’ undergraduate program with a declared major. Nor would I ever recommend a high school student pursue such a route. I did very well in high school, graduating with scholarships and on the principal’s lists (top ranked graduates of the high school in Canada) but at the ripe age of 18 I didn’t know what I wanted in life, I thought I knew but I didn’t. I knew I liked, and was good at, science and of course sciences have more job prospects than arts, or so I was told (I don’t really believe this).

I really don’t think most 17-18yr old high school students really know what they want upon graduation. There is such a pressure to graduate high school and immediately pursue post-secondary education but, especially in today’s economy and the rising cost of tuition, I really don’t think it’s the smartest thing to do. I know a lot of parents fear that if their child takes time off between high school and post-secondary that they might not return to academia or that nothing will become of their child. I have to tell you that some of the most successful people I know were the ones who took a year or two off, traveled, worked and really discovered the person they were- outside of the high school walls. Most people don’t come into themselves until after graduation. Are you the person you were in your senior year? Most likely not.

Choosing your lifelong career path in the hype of hormones and emotional turmoil is not the smartest idea.

Taking time off never even had the chance to enter my mind, I was going to university to study biology and be a science rock star. I knew I wouldn’t pursue biology as a full on career (ie doing a PhD of sorts) but I also didn’t really think I would end up in year 3 of 4 in my undergrad and realize I had essentially wasted 3 years of my academic life pursuing a degree with little to no job prospects. High schools do such a good job at sugar coating university for the ‘smart kids’ that they tend to neglect the important information like, there are NO JOBS. Are high school teachers paid commission from the universities or something?

In my 3rd year I knew something had to change. I was about to graduate with 40k debt and the only job prospects paid slightly better than minimum wage. I went through university with my two best friends. We all graduated with our BSc’s and I was the only one to pursue more education. They both work full time for slightly better than minimum wage, one girl working full time and 2 part time jobs to stay afloat.

I guess the ironic part is that I ended up in substantially more debt to get my career but at the end of the day I know I made the right choice. I went back to university and became a Dental Hygienist. I graduated with my choice of job (although the market is a little saturated now but still work available) and making 3 x what I would have I stopped with my BSc. I love my job and so glad I made the choices I did.

When talking to high school students who I know want to go directly to university I tell them to apply into a program that lands you a job even if it’s not something you think you may want to do because like I said before, you really don’t know what you want at 18. Most programs have similar first year foundation classes regardless of the program so if you don’t like the program after your first year you can chose to then apply into something else but you have the security of knowing you will graduate with a degree that will get you a job should you chose to stay. The undergraduate programs I’m mainly talking about would be engineering, nursing or finance, all of which you can apply into from high school (vs. programs that require at least first year prerequisites to get into).

My sister in law was going to apply to do her basic BSc because she was thinking about pharmacy or nutrition as careers but wasn’t sure. I encouraged her to apply into nursing (something she didn’t think she’d like) and if she didn’t like it, apply to the other 2 programs after her first year  because they both require first year pre-reqs which can be satisfied through nursing (1st year bio, chem, math etc.). That conversation took place 7 years ago, she’s now a successful OR nurse and loves it. She has job security with amazing benefits, I’m so glad for her.

I don’t want to sound like I’m bagging on all undergrad programs, on the flip side I know many successful people who have stayed in their fields and done very well but they are few and far between. It sickens me to see such well educated people not be able to use their skills and education. What use to be an honor and necessity for jobs, basic undergraduate degrees are a way of the past I think.

There are still many great university and college programs out there, but try and get into something with more definition and job prospects. Or take time off, figure yourself out and then pursue your career so you don’t end up with a degree for the sake of having a degree and debt because even if your education is paid for, it’s wasted money if you can’t get a job.