Planning Post-Secondary Education Costs

Written by Robin Taub

Thursday, August 27th, 2020

Annual tuition for Canadian students averaged $6,463 in 2019/2020 for an undergraduate degree. Students face additional expenses like housing and meals, fees, textbooks, transportation and entertainment.

Post-secondary education is a significant annual expense that requires careful planning.

To prevent the spread of COVID-19 in Canada, many post-secondary institutions have moved to or are offering distance learning, at least for the first semester of this academic year.

What Are Some of the Financial Implications for Students and their Families?

First-Year Students: Where to Live?

For students who were planning to study out of town, how will things potentially change? To accommodate social distancing, some university residences will be de-densifying rooms and operating below capacity, like at Western University. Meals in dining halls will also be impacted, with no self-serve buffets and more pre-packaged grab-and-go options.

However, "some students are renting apartments instead," according to Lisa Sniderman of Toronto, who has a nephew entering first year and a son going into second year, at Western. Without in-person classes, the academic and social experience will be different. "Many students are opting to stay at home and study online in order to save the money," she adds.

Some students have also opted to defer their acceptance and take a gap year, in the hopes that in-person classes will return a year from now.

Impact on Income

Many students, both new and returning, who count on earning money in order to pay for school, have been unable to work since March due to the COVID-19 induced shutdowns. If they weren't eligible for the Canada Emergency Response Benefit (CERB) or Employment Insurance, they may have been able to claim the Canada Emergency Student Benefit (CESB) of $1,250 each month for four months or the Canada Student Service Grant (CSSG). However, it may not be enough to cover all of their expenses and a thorough review of their budget may be needed.

Many co-op programs, which allow students to alternate school and work terms, are still running. "Many paid internships in engineering between third and fourth year are continuing," according to Jack Lipton, a third-year engineering student at Queen's.

Tuition, Fees and Books

Universities don't appear to be lowering tuition fees, even though all classes are online. Tuition fees are tax deductible, which will provide some tax relief. "Fees are pending though. I don't know if they can charge for recreational facilities and other ancillary fees if they're not offering those services," Sniderman explained. (For more information on both sides of this issue, check out the Planet Money podcast episode entitled College Fails.)

Depending on the program, textbooks are either mandatory, or simply an additional resource, and most schools try to offer both digital and print versions. "However, if I do need to buy a textbook, I usually buy the digital ones as they are far cheaper," says Lipton.

Transportation and Moving

Even with fewer trips to campus, some schools continue to offer discounted bus passes for students. Moving expenses are also tax deductible, if you meet the criteria.

Returning Students: Rent

It's common for students to finalize their off-campus living arrangements in November or December for the following year. This was the case for many students in 2019, who committed to leases which would typically run from May 1, 2020 to April 30, 2021.

"It's a waste of money to pay for an apartment you don't really need, but you're locked into the lease," states Sniderman. If you're in that situation, consider a subletting arrangement if possible.

Needs Versus Wants

As with all spending, think about needs versus wants. In prior years, a home workspace may have been a want if students mostly studied at the library or in study halls. This year, however, it's a need. "I'm buying a bigger desk, a better chair and another monitor," says Lipton. "Everything else I have from last year."

Food and Entertainment

Lipton expects to spend less money overall this year. He thinks he'll spend more on groceries and less on eating out and entertainment. He's even taking a cooking course this summer to improve his skills.

Taking advantage of student discount days at grocery stores, and carpooling to do your shopping, will also help save money. Buying in bulk and sharing is a great way to stretch your budget. Lipton and his three housemates split all groceries evenly "because less food gets wasted and cooking is less expensive than ordering in."

Share now