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August 11, 2015

Family Finances: Investments in Education

Stacy Yanchuk Oleksy and Nathan Battams

(Updated November 20, 2017)

Decisions surrounding post-secondary education can have a significant impact on the lives of young adults and their families. A degree or diploma can open doors to employment and the possibility of higher earnings; however, higher education doesn’t come cheap! Tuition fees are increasing at a rate much higher than inflation, and they are compounded by a combination of other student expenses, such as housing, transportation and groceries. For many young Canadians, the short-term pain of post-secondary education costs can seem greater than the long-term gain of having a degree, even with student loan programs in place to support their academic pursuits. Initially – or when students find themselves short on the resources they need to enroll or stay in school – most turn to their families for support, and families adapt in diverse and creative ways to provide this support.

Post-secondary education is a family investment

While post-secondary education is widely seen as a valuable investment, student costs must be well managed to fully realize a return on investment. According to Statistics Canada, the average annual university tuition fee for undergraduate students is nearly $6,600 for the 2017–2018 academic year – that’s nearly three times as much as their parents would have paid in the 1970s. These costs, particularly when combined with other student expenses, add up quickly. The 2015 National Graduates Survey found that half of students in a bachelor’s program finish school indebted, owing an average $26,000 upon graduation. Slightly fewer (43%) college graduates finished school with debt, averaging $15,000 upon completion of their program.

Many students work part- or full-time to generate income to pay expenses, supplement student loans or augment family financial assistance. However, employment can compete with academic commitments, making them more difficult to fulfill. So, many students turn to their families for assistance to help finance their education. The nature and amount of assistance provided is shaped by the family’s financial situation and circumstance, as well as attitudes and beliefs surrounding who is ultimately responsible for post-secondary financing. Some families have the means to cover the entire cost and others provide partial support, while some cannot afford to provide any financial assistance. Each of these scenarios has an impact on the student’s finances, money management strategies and family relationships. By looking at the relationship between educational aspirations and family financial assistance, we can learn about the broader complexity of family finances and the diverse ways families provide support.

Without help from family, a student will likely have to take out student loans or live on easy-to-access student credit to cover the costs. This often happens even when families do provide financial assistance. Some post-secondary education costs can be offset if students work part-time during their studies, but this can be difficult – students have to balance the workload and the pressures of class while managing employment. Sometimes students may extend the duration of their program to leave time so they can work enough to pay for expenses.

Family financial support is common

Some families pay for the full cost of their child’s post-secondary education and related expenses. These costs can be covered by family income or through longer-term savings strategies. According to Statistics Canada, nearly seven in 10 (68%) Canadians aged 17 and older had savings set aside for college or university in 2013.

Registered Education Savings Plans (RESPs) were the most common savings approach for educational pursuits: in 2013, 77% of those with savings had an RESP – up from 69% in 2008. Parental education can shape expectations and saving behaviours for their children’s post-secondary education. Among children whose parents had a high school diploma or less, just over half (52%) had savings set aside, compared to 78% among children whose parents had a university degree. Not surprisingly, family income also plays a big role: in 2013, 44% of children living in households with an annual income of less than $30,000 had parents who were saving compared to 82% of children living in households earning $100,000 or more.

Many families aspire to cover the costs of a child’s post-secondary education, but they are not in a financial position to directly cover the full cost through income transfers or RESPs. Students can help reduce financial pressures through rigorous budgeting, but this can only go so far until it eventually threatens their food or housing security. Parents sometimes offer support by co-signing credit (e.g. loans, lines of credit, credit cards) to help their student cover the costs of schooling. However, this strategy is not without its risks, as the co-signer is responsible for the entire debt if the student fails to make his or her payments, even if the student files for bankruptcy.

Family financial support is complex

Family finances are complex, as are the diverse ways in which families adapt to provide support when access to money is limited. If a student is attending a post-secondary institution near the family home (or the home of another relative), support sometimes takes the form of free room and board throughout the school year, and the student may or may not be left responsible for other costs, such as books, tuition and possibly food. As life and school costs have increased over the past 30 years, so too has the proportion of young Canadians aged 20 to 24 living in the parental home – rising from 42% in 1981 to 59% in 2011.

Students sometimes receive non-financial forms of family support even if they aren’t living in the family home. Many students will do laundry or stick around for family meals when they visit their parents, allowing them to save money while nurturing their family relationships. Parents sometimes bring care packages, furnishings or simply money-saving advice when visiting their children during the school year.

Providing support can affect family finances and family relationships

Parents may be making significant financial sacrifices to help provide financial support – sometimes at the cost of their own aspirations. In a 2013 CIBC survey carried out by Leger Marketing, 33% of parents with children under age 25 reported that they had incurred additional debt as a result of financing their children’s education, and 36% said they would need to delay their own retirement as a result. While most are quite happy to provide this support, it can have an impact on their plans.

Tensions may arise between parents and students if the financial support being provided puts strain on the household. Direct financial support can put additional pressure on the parents’ finances that they might not have previously planned for, which can impact their ability to pursue their own aspirations (such as retiring). When a student continues living in (or returns to) the parental home to help reduce costs, the impact may also be felt in the relationships between those living in the parental home – particularly if this living arrangement had not been planned in advance. Finally, the student may feel a psychological impact, as he or she might feel the weight of expectations regarding academic performance resulting from guilt felt for continuing to rely on parental support.

When parents contribute financially to post-secondary expenses, it may create some pressure on students to meet parents’ expectations with regard to studying, grades and even attendance. Students are accountable not only to themselves and their education, but to their families. This scenario may create tension between family and student by not allowing the student to pursue his or her goals without a feeling of pure independence or to experience the peaks and valleys of adult decision-making.

Family support is priceless

Despite the pressures and financial tension that may arise from supporting the costs of education, families are highly resilient and adaptable problem-solvers, and all parents want their children to succeed. Communication and expectations between parents and students are crucial, as is providing the freedom to let the student learn from managing his or her new academic and financial responsibilities.

Families provide much more than just financial resources for post-secondary education. They provide emotional and social support for the student and encouragement to grow and learn from challenges and mistakes, and they cheer the student on as he or she starts the journey into a meaningful career. That’s something money can’t buy.


Stacy Yanchuk Oleksy is Director of Education and Community Awareness at the Credit Counselling Society. Nathan Battams is a writer and researcher at the Vanier Institute of the Family.



Statistics Canada, “Tuition Fees for Degree Programs, 2017/2018,” The Daily (September 7, 2016), accessed November 20, 2017, .

Nicole M. Fortin, “Rising Tuition and Supply Constraints: Explaining Canada–U.S. Differences in University Enrollment Rates,” Higher Education in Canada (2005), accessed July 21, 2015, .

Statistics Canada, National Graduates Survey, Student Debt from All Sources, by Province and Level of Study (Table 477-0068), accessed July 20, 2015, .

Statistics Canada, “Survey of Approached to Educational Planning, 2013,” The Daily (October 29, 2014), accessed November 20, 2014, .

Statistics Canada, “Living Arrangements of Young Adults Aged 20 to 29,” Census Analytical Products, Statistics Canada catalogue no. 98-312-X-2011003 (September 2012), accessed December 4, 2013, .

CIBC/Leger Marketing, Parents Delaying Retirement, Taking on Debt to Help Kids Pay for Education (August 2013), accessed November 20, 2014, .