1. Planning Finances for Post-Secondary Education Prepared by Proliteracy.ca @ProliteracyCa

2. Choosing your career There is no magic formula, but consider: Your passion (love what you do, do what you love) Life style Job market trends Cost and length of studies The job market is becoming incredibly competitive, many jobs require a college or university degree While we do encourage the pursuit of post-secondary education, it is not the only path to a fulfilling career

3. The reality – money matters Post-secondary education has become incredibly expensive Estimated tuition of 4 year academic program at a major university in Toronto* Enrollment Year 20112016 Engineering$38,220$49,560 Business & Public Administration$32,920$41,180 Physical & Life Sciences$26,560$32,940 Education$22,300$25,880 Humanities$21,160$24,620 * Canadian Open Data – Stats Canada

4. The reality – money matters Studying away from home? You need to pay rent! Estimated rent for modest bachelor apartment for 4 academic years at major Canadian cities* Enrollment Year 20112016 Toronto$26,304$30,112 Vancouver$26,944$30,016 Calgary$22,656$28,960 Edmonton$22,816$27,872 * Canadian Open Data – Stats Canada

5. Cost of post-secondary education But wait. It’s more than just tuition, they all add up Tuition Room and board Living expenses School supplies

6. Meet Joe, a grade 12 student with great aspirations Wants to be a civil engineer and design roads for the city Accepted into an engineering program at a major university Starting his first year in September 2016

7. Joe’s tuition for a 4 year program Engineering tuition at major university in Toronto in 2016 for 4 academic years: $50,000 Annual rate of increase of 7%

8. Room and board Rent in the city for 4 academic year is roughly $30,000 On campus residence costs roughly the same Joe decided to live at home!

9. Other Expenses Books Food Transportation Entertainment Roughly $30,000 for 4 academic years

10. Total cost for 4 years of studies Tuition$50,000 Room & Board$0(living at home) Expenses$30,000 Total$80,000

11. Putting it into Perspective Joe’s father has an annual salary of $50,000 After tax income is $41,429 Assuming Joe’s father can save $4,143 or 10% of his income each year $80,000 translates to 19 years of savings

12. Fortunately, many forms of financial assistance are available

13. Start planning early Start with the cheapest form of funding Savings Government Grants Scholarships Family (pledges & trust funds) Wages from part-time / summer jobs When additional funding is required Government loans Student line of credit

14. Savings – it’s your own money, and there are ways to make it grow without risks

15. Savings - RESPs RESP is like a piggy bank, but with perks Government put money into it! It grows on its own if you invest wisely Tax incentives No reason to not open an RESP account $50 monthly contribution over 18 years yields about $15,000* * Assuming 1.5% annual interest & CESG Grant

16. RESP Grants at a glance Grants for all CanadiansGrants based on family income levelGrants for specific provinces Canadian Education Savings Grant (CESG) – Government matches 20% of your annual contribution up to a maximum of $500 Canada Learning Bond (CLB) – Government contributes $500 when opening an RESP account with an additional $100 contribution up to age 15 Additional CESG – another 10% or 20% of annual contribution matching based on family income level British Columbia Training and Education Savings Grant (BCTESG) - Government contributes $1,200 when child turns 6 Saskatchewan Advantage Grant for Education Savings (SAGES) – Additional 10% annual contribution matching up to $250 Quebec Education Savings Incentives (QESI) – Additional 10% annual contribution matching up to $250 per year

17. $50 monthly contribution over 18 years * Assuming 1.5% annual interest & CESG Grant

18. Grants and Scholarships – free money, you just have to look for the right ones and apply

19. Government Grants – outside of RESP Government grants vary by provinces, make sure you understand yours! Ontario offers 30% off tuition (up to certain amount) for most families Grants for low income / middle income families (income category depends on family size, province and family income) Students with dependents Students with disabilities

20. Ontario Student Grant Effective commencing in the 2017 academic year Majority of families with less than $50,000 annual income will receive grants in excess of average tuition Additional financial coverage for families in general

21. Grants & Scholarships Grants and scholarships are not just for student with good grades There are many forms of scholarships not just from the government, but from schools and commercial & non-profit organizations Academic Community involvement Arts Writing Sports Financial need and many more…

22. Funds from family Are there members from you extended family who can make pledges towards your education? You can offer to pay them back when you get a job. Grandparents? Aunts and uncles? Other types of savings? Some families have trust funds specifically for post-secondary education This may not be for everyone, but worth thinking about

23. Part time and summer jobs Many college students work part time or during the summer to help pay for school The money aside, you get on-the-job training and experience that help jump start your career Organizations are incentivized through tax credits to hire college students Smart students are highly productive You have a lot to offer to employers!

24. Loans – Money you borrow and pay back in the future

25. The funny thing about interest Interest $$$ you earn $$$ you pay You Bank RESP Loan

26. Loans Loans are expensive, because you have to pay them back with interest The average university student graduates with $28,000 in student loans* The average Canadian takes 9.5 years to pay back student loans Loans are available from the government (i.e. OSAP) or from financial institutions * Canadian Federation of Students

27. Government Loan vs Commercial Loan Government LoanCommercial Student Line of Credit (Loan) No interest and principal payment during schoolNo principal payment during school 6 month grace period following graduation12 month grace period following graduation Fixed / variable interest rate (Prime rate + x %) Mostly variable interest rate, sometimes more favorable rates (Prime rate + x %) More options to delay paymentLess flexible repayment options

28. Implication of debt Loans don’t just go away All loans come with interest Loans have a maximum pay back period or minimum payments The longer you wait to pay back, the more money you owe

29. Loan of $20,000 You have a student loan balance of $20,000 when you graduate from college Assuming you pay back $2,700 a year 5.0% interest rate The loan will take roughly 10 years to pay back Note that your total payment is $27,000 – that’s how loans work

30. In summary Get a reasonable estimate on how much post-secondary education will cost in your situation Start planning early Start with the cheapest financing options like savings Do your homework and understand what grants and scholarships are available If you need to take out a loan, seek to understand the terms of your loan and determine the impact of debt

31. Where to get help It’s OK to talk about personal finance If you don’t understand, ask! School teachers and counselors Family Friends Online resources

32. Classroom Exercise

33. Go to http://proliteracy.cahttp://proliteracy.ca Click on “Estimate Cost and Start Planning” Create your profile and follow on-screen instructions to see costs related to your own scenario Create an account to learn about financing options like RESP, grants, scholarships and loans

34. Classroom Exercise How do you feel about your personal situation? Discuss ways to reduce costs Discuss ways to finance post-secondary education

35. Disclaimer The materials contained in this presentation do not claim to be or constitute legal or other professional advice and shall not be relied upon as such. We take reasonable measure to ensure the information is current and accurate for its intended use, but we do not warrant the information’s accuracy, completeness or usefulness. The data and estimates provided on this site are for reference purposes and should be consumed based on your discretion and best judgement.