Why you need an Education Plan

It's November and the kids are back at school. Although you may have purchased new clothes and supplies to help them start their academic year, are you prepared for the day when your children actually finish high school?

A recent Statistics Canada survey showed that nearly 90% of Canadians want their children to attend university or college. Unfortunately, the same survey showed that only 40% of parents have actually started setting money aside for post-secondary education. Due to rising tuition fees, you may need to set aside more money than you counted on.

According to Human Resources and Development Canada, a child born today can expect to pay about $85,000 for a four-year undergraduate degree. If your son or daughter wants to enter one of the professions – such as medicine or law – that number could be even higher.

Tuition at Queen's University's medical school has already risen 300% in the past five years to just under $12,000 per year, while the University of Toronto law school plans to increase its yearly fees to $22,000 by 2006.

The good news is that there are specialized savings plans available to help you deal with this coming cash crunch. A registered education savings plan (RESP) could allow you to place up to $42,000 per child in a tax shelter, and also receive an additional $7,200 in grant money from the government!

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