Paying for university

I just read an interesting article on Babble by Megan Francis, talking about why she won’t be paying for college for her kids.  I don’t necessarily agree with all of it, but I do with most of it, especially the part about a trade being more valuable.  David is a lead engineer, and makes good money.  The plumber who came out a few weeks ago to fix our little sewage backup problem charged an hourly rate almost 3 times higher.  Yeah.  If I go back to school, it will be to the local polytech trade school, not to the university for grad school.  Because I want a career, see, not another amusingly useless degree.  Don’t get me wrong – I loved university, and the classes I took, and the experiences I had.  It has, however, done nothing material to help my career, and while I’m totally fine with that, I see no point of going back for more paper I can’t translate in to the work force.  A 2 year engineering technician program would be infinity more useful to me than a MA in International Relations, you know?

Anyway.

David and I each paid for university, but we both had help.  His parents, along with his roommate’s parents, bought the boys a condo for the 4 years they were in Calgary, so they ddn’t have to paay rent – *just* utilities and food and books and tuition and rum.  I lived at home, so got free room and board, but still paid for books and tuition and a social life.  I worked summers, of course, and I also had 4 part time jobs.  (Which sounds way harder than it was. I worked catering and concerts at the university, and the special events set up for the city and the botanical gardens.  All were random shifts with unpredictable hours, and I could turn down any I needed to without problems.)   David didn’t work during the year (engineers have to take 6 courses a semester, while the rest of the campus maxes out at 5) but worked every summer.  We both agree that having to work to pay for (some of) school made us work harder and not fuck around.  Also, we’re in Canada.  Tuition to our university was like 25k for the 4 years, I think?  Call it 30k with books.  I couldn’t quite make enough in the summers to cover it, but that’s why I worked year round.  David had to take out a small loan in his 5th year, but it was paid back quickly.

So we want some of that for Jess.  Working to your goals makes you work harder, and be less entitled, and appreciate it more.

But, on the other hand, we want to do something.

So yesterday, I figured it out.  Canada has a nice Registered Education Savings Plan program, and I think it’s kind of great.  We’ve registered for a family plan, so if Jess doesn’t go to any post secondary, future-hypotetical second kid can, or I could even use it.  And even if no one ever can use it, the money can be moved to an RRSP, although minus the grants and the tax on the interest.  Otherwise, the interest isn’t taxed, and the money is only taxed when the student uses it, but kid will probably have a low enough income to not need to pay much in the way of taxes on it.  Also, they can spend the interest, and at the end, you can take the principle back, tax free. So far, so good, right?  Well, it gets better.  This is Canada, where politicians actually back up their claims of “family friendly”.  If you put in $2500 a year, the feds will add $500 a year to the RESP.  Our province matches that the first year, and there are a couple of $100 grants offered throughout the kid’s childhood.  Plus, all families in Canada are eligible for the Universal Child Care Benefit, which comes to $1200 a year. Thankfully, we don’t need that money to cover day to day costs, so we’re saving it up and will stick it in to an RESP every year, which means that we personally only need to save $1300 a year.  If we do this for 17 years, everything else being equal, before interest that’s $51,500, and will only cost us $21,800.  And, let’s be honest, I expect the grandparents, or at least my mother, to give Jess a bit of money at Christmases for this exact purpose.

So that’s our plan.  We’ll not spend the UCCB cheques, and we’ll save $1300 a year (minus whatever comes from the grandparents) and anything else is on her.  That seems fair, right?  Hopefully, because that’s the plan.

 

God, I love this country.

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3 responses to “Paying for university

  1. We have both girls signed up for the RESP too. We were talking about it the other night and could very well have 3 kids in university (or some sort of schooling) at the same time. Yikes! I think it is important to help pay for your education but at the same time we don’t want them to have huge loans at the end either. In my family the motto was “the first degree is free” which is a pretty sweet position to be in. However, I don’t know if we will have the ability to be quite so giving. We’ve always put the Universal Child Care Benefit into the RESP too and try to get family to donate to it instead of buying things we don’t need. The girls (and boy? I have a feeling it’s going to be another girl) will thank us when they are older.

    • If you think of it as some is better than none, it’s all a win, right? And 20 years of interest adds up, and I am sure they’ll be happy in 15 years when it matters.

      A girl baby would make hand me downs a cinch!

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