Not counting food and accommodation, the annual cost of undergraduate education is all over the map. Bursaries, scholarships and tax implications make figuring out the cost of a graduate education even more complicated.
When I graduated in 1965, students who lived at home in a university town could fund the cost of their education from the earnings of a summer job.
That is not remotely possible today.
However, if we take full advantage of the assistance available from US and Canadian governments and also maximize the impact of compound interest, we can reduce the pain substantially. That means that we need to initiate these plans as soon as possible, that is, as soon as the intended recipients are born.
The 529 plan in the US and it’s Canadian equivalent, the Registered Education Savings Plan (RESP) are tax-advantaged ways of reducing future university costs.
The details vary. Your banker will happily present you with the most useful considerations for your children or grandchildren.
You and they will be glad that you did.
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