Students in Alberta expect to be in debt.
That’s really nothing new. When I went to university 20 years ago, I expected to graduate with a wad of debt.
The difference is, I was facing only a few thousand dollars.
Today’s university students in Alberta expect to graduate $27,000 in debt, according to the BMO Student Survey released Tuesday. The average Canadian student expects to graduate with a $26,297 debt load.
The survey, which compares opinions from 2012 and 2013, also reveals:
- Compared to last year, students are relying less on the ‘Bank of Mom and Dad’ than in 2012, down eight per cent from 52 to 44.
- They are less likely to depend on their own savings (58 per cent versus 62 per cent) and more likely to rely on loans (55 per cent versus 49).
And, of course, students across the country continue to rank financial situation as their No. 1 stressor, even more so than academic success and finding a job post-graduation.
What can we do to alleviate those stressors?
An RESP may not help the students heading to class next month, but parents should be considering setting money aside for their children’s future education.
They may not want to rely on the ‘Bank of Mom and Dad’ but there’s nothing with us taking care of a little business when they’re too young to say no. Right?
An RESP, or Registered Education Savings Plan, is a special savings account that parents set up to pay out funds to their children when they become post-secondary students. The funds are paid out as Educational Assistance Payments (EAPs) when your child is enrolled in a qualifying educational program.
The federal and Alberta provincial government can help out with additional bonds and grants:
- The Canadian Education Savings Grant adds 20 per cent to your annual contribution, up to a maximum of $500 a year for each beneficiary. It increases to $1,000 if there is unused grant room from a previous year and the lifetime limit for the grant is $7,200.
- The Canada Learning Bond adds a grant of up to $2,000 per child to help families of lower incomes.
- The Alberta Centennial Education Savings Plan (ACES)contributes $500 for each child born 2005 and after.
Next week, we’ll give you a rundown on how students and parents can use their tuition and other expenses for to reduce their tax bills in 2014.
Can you help?
We’re here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.
The Canada Revenue Agency has an active Twitter account. If you’re interested in following the account, you can the CRA at@CanRevAgency.