parents helping teenage son pack for college

The majority of Canadian parents with children aged 12 and under underestimate the total average cost of post-secondary education and may be inadequately saving as a result, according to a study commissioned by Mississauga, Ont.-based RESP provider Knowledge First Financial.

The survey discovered that while two-thirds of parents with children aged 12 and under say they’ve anticipated the cost of post-secondary education, 73% are taken by surprise when presented with a calculated cost based on their child’s year of birth.

Parents are underestimating post-secondary tuition fees by up to 27%, and even further up to 49% to 60% when tallying additional costs, such as residence.

The report says that new parents with children born in 2018 can expect to pay $124,956 — including residence — for a four year degree when their kids head off to school in 2036.

“We found that the majority of parents accounted for tuition and textbooks, but missed other costs,” says George Hopkinson, CEO of Knowledge First Financial, in a statement. “Often 16% accounted for visit homes, 37% accounted for residence or accommodation and less than half (42%) accounted for transportation. Once informed of the projected costs of education, 75% of parents said they plan to increase their education savings goals.”

Hopkinson adds that parents may have an RESP for their child, but 55% don’t have a written plan on how to help them reach their savings goals. An advisor can help clients with a planning process, in addition to maximizing grants like the Canadian Education Savings Grant.