Month: February 2024

Graduating from high school is an exciting time in a teen’s life—they’re getting ready for prom, getting their first car, and preparing to make some pretty big life decisions. And while your teen may be ready for the next step, their savings may not. 

Whether your kid dreams of going to college, university, or a trade school, post-secondary education is an invaluable learning experience. Getting the schooling they need to take on their future career requires some preparation⁠—both mentally and financially. 

Luckily, there are a number of options available to both you and your teen that can help them pursue the school of their choice. We share some of the ways to pay for post-secondary education, such as using their RESP; applying for scholarships, government grants, and loans; and ways your kids can earn extra money while studying. 

Key takeaways

How much will post-secondary studies cost?

The average price of tuition for the 2022–23 school year in Canada is between $3,852 to $7,437, depending on the program and school. For an undergraduate degree at a Canadian university or a college, the price tag rings in at around $6,800 per year. But there’s more than just tuition to cover when it comes to going to school. There’s also the cost of living in a student residence or off-campus housing, a meal plan or buying groceries, transportation, textbooks, plus the fun stuff, like socializing with new friends. If you’re not sure how it will all add up, a budget calculator can help you and your teen see big-picture costs.

How to pay for post-secondary education in Canada

Here are three ways families can help fund post-secondary education in Canada: 

Use savings 

Maybe your teen has been working part-time or has had summer jobs and now has a decent nest egg in their student bank account. Or maybe you’ve been stashing away their birthday money in a kid’s savings account since they were little. Either way, it’s important to remind your teen that putting aside a little bit every month or year can make a big difference when they have big education goals in mind. Evaluate how much you’ve both put aside to see how much more you need to make your budget work.

RESPs 

One way to give your child a head start is to save for their schooling through an RESP, which allows you to earn interest tax-free on up to $50,000 per beneficiary. (You can also apply for top-ups to your yearly contributions from the Canadian Education Savings Grant [CESG] up to a lifetime max of $7,200.) When your child enrolls part-time or full-time in an eligible post-secondary education program, you can start withdrawing money for expenses related to their education, for things such as tuition, transportation, and books, as determined by your RESP provider.

Scholarships, grants, and bursaries

If you and your teen haven’t saved as much as you’d both hoped, there are scholarships, grants, and bursaries that students can apply for to help cover the difference. The best part about these is that your teen won’t have to pay back the money. Here are a few options:

University and college scholarships 

Your teen may be eligible for entrance scholarships based on merit simply by applying to the university or college of their choice. Even if they’re not eligible, there are many different types of school scholarships available to students Canada-wide, focused on things such as athletic ability, community leadership, or for Indigenous youth. There are many places to search for the best fit for your teen, such as Scholarships Canada.

Private grants 

Some non-profits and businesses offer private grants to students. Some are based on academic interests, financial need, or grades, while others support communities such as Black or Indigenous youth. Some of these may require an essay or proof of community service, but it’s worth the effort—private grants can offer them access to the program they want, and the money won’t need to be paid back.

How the government helps students pay for post-secondary education

The government has a program to help students pay for school: the Canada Student Financial Assistance Program (CSFA Program), which works with the provinces and territories to provide grants and loans. Eligibility varies, but money is available to full- and part-time students, from low- and middle-income families who may have dependents, or who may have permanent disabilities. 

Provincial grants and loans 

The CSFA helps eligible students connect with financial options, such as grants and loans for full-time and part-time students. Each province and territory has its own government loan program. For example, the Ontario Student Assistance Program (OSAP) and British Columbia’s StudentAid BC have grants (which don’t need to be repaid) and student loans (which need to be paid back—with interest—once your kid is done school). You can also use the government’s Student Aid Estimator to figure out how much you could receive.

Canada Student Grant 

The Canada Student Grant is an option for full- or part-time students in financial need who are attending a qualifying program, and who have a family income that is below a certain threshold. Full-time students could receive up to $4,200 per year, depending on their financial need.

Canada Apprentice Loan

If your kid dreams of becoming an industrial electrician or a carpenter, there are lots of avenues to get financial assistance while they learn the tricks of the trade. The Canada Apprentice Loan is available to cover the cost of technical training for $4,000 per training period, for up to five periods. There are caveats, though: their apprenticeship needs to be with a Red Seal Program. If a student meets all the qualifications and is accepted, the loan could also remain interest-free for up to six years.

How financial institutions can help pay for post-secondary education 

If you’re considering borrowing to cover the costs of your teen’s schooling, talk to your bank or financial institution about the available options for both you and your teen.

Student line of credit

A line of credit for students is one way that your teen can borrow the money they need, when they need it, and pay it back when they are done post-secondary school. (Most financial institutions require students to start paying back the principal two years after graduation.) It also allows them the flexibility to use it on the things they need right away—like a new laptop or even a study trip abroad. Just make sure to remind your teen that unlike a student loan from the government that doesn’t accrue interest until they graduate, a student line of credit will have monthly interest payments to keep up with, and the interest rates can change. Plus, they’ll need someone (usually a parent or guardian) to co-sign the loan to guarantee that someone will make the payments if for some reason your teen can’t. 

Bank loan 

Taking out a personal line of credit or bank loan is one way for parents to help pay for their child’s education without affecting their teen’s future financial situation. Plus, it should allow you to access more cash for big tuition payments, quickly. Depending on whether your loan is secured or unsecured, interest rates may vary. There can be additional fees and credit score repercussions, so before you borrow, ensure you can pay it back on the agreed-upon schedule. And don’t let your kids completely off the hook. If you’re taking on a loan for their financial future, they can chip in when they can through part-time work or a summer job.

Home Equity Line of Credit (HELOC) 

A Home Equity Line of Credit (HELOC) is another option for parents who want to cover their kid’s education costs. A HELOC is based on the current value of your home minus your outstanding mortgage balance, so it could be a way to borrow at a lower interest rate. Also, more credit should become available to you again as soon as you pay it off. When borrowing against your home, though, you’ll want to take a good look at your financial situation to make sure it’s the right move, that you’ll be able to pay off the minimum, and how you’ll manage the accumulated debt. 

How students can pay for post-secondary education while attending school

There are other ways for young adults to pay for school and related costs if they need additional cash flow.  

Part-time job

A part-time job can top up your teen’s bank account, provide flexibility around their class schedules, and be a source of valuable work experience. Some schools have opportunities for on-campus employment—just make sure your future student applies far in advance (when they accept a placement is a good time to look), as sometimes the jobs for the coming year open early (and fill up fast). A side hustle is another way to make money. From selling artwork on social media to tutoring in the evenings and/or on weekends, finding a gig that your teen enjoys (and can get paid for) is a great way to pad their bank account. 

Co-op work terms or internships 

Consider a co-op program, where students have a paid work term in an industry in their field. They get hands-on experience alongside an opportunity to network. Internships are another great option. These can take place in summers or during the academic year and may even lead to a future full-time gig. Internships used to have a bad rap for being unpaid (Remember?), but they’re now covered under the Canada Labour Code, so interns will at least be paid minimum wage.

Read more: What teens need to know about getting an internship.

Apprenticeships 

Becoming an apprentice, where your young adult can learn a trade, art, or job under the formal supervision of an experienced professional, is another way to get some paid experience and gain valuable networking contacts. Your provincial or territorial employment office will often have resources for applying for apprenticeship roles.

Signing up for Mydoh is an easy way to help kids and teens learn how to save for school, or manage their money while they’re away from home learning. It’s a great resource for important skills that will help them excel in the real world. 

Download Mydoh and help build the foundation of financial literacy for your kids and teenagers.

Picture six kids—three boys and three girls—standing in a gym. They’re given a simple task: sort coloured balloons into separate hampers. Chaos ensues and at the end of the game (cue fist bumps and high fives), the kids close their eyes and wait for their reward: a cup of candy. 

Only some cups had more candy than others. 

“You got more than me,” quips one girl.

“How come you got that much when we have the same job?” asks another girl.

In the end, the kids share their candy to make it equal. “Because there’s no real difference in what we did,” says one of the boys.  

The point of this video? It gives kids a simple explanation for a not-so-simple issue: the gender pay gap. In this article we cover equal pay, the causes of the gender pay gap, and how to talk to your kids and teens about it. 

What is the gender pay gap? 

When people talk about the gender pay gap (or gender wage gap), they’re referring to the difference in average earnings between men and women. The gap can be measured using different metrics, including average annual earnings, hourly wages, and part-time work. This gap—usually expressed as cents on the dollar that women earn compared to men—helps reflect inequities in our society. Inequities that can last throughout a woman’s life. That’s because the gender pay gap is shown to be one of the main causes of poverty for women. 

Is there equal pay in Canada?

The short answer to whether there is equal pay in Canada is: no.

Currently, women do not receive equal pay. In 2021 part-time and full-time female workers earned 89 cents for every dollar earned by men. And according to 2019 statistics, if you factor in annual wages, salaries, and commissions, that amount is reduced to 71 cents for every $1 a man takes home. While 89 cents compared to $1 doesn’t seem like a big deal, over a woman’s career, that seemingly small difference adds up. 

According to the Organisation for Economic Co-operation and Development (OECD), at 16.1 per cent Canada has the eighth-worst gender pay gap out of 43 countries (Costa Rica takes first place with just 2.6 per cent). And in 2015 the United Nations Human Rights Committee noted concern over Canada’s “persisting inequalities between women and men,” especially the “high level of the pay gap,” which gets worse in Alberta and Nova Scotia.

But the wage gap isn’t just about gender. Discrimination can be a huge factor, and for women of colour, LGBTQ2S+ women, Indigenous women and those with disabilities, the gap is even wider. Compare the annual salary of non racialized men in Canada vs Black women. 

On average, white men earn $56,920 vs $31,900 for Black women. That’s a difference of almost 44%. While the gap isn’t as pronounced between Black and non racialized women in Canada ($31,900 vs $38,247), the racial wage gap still adds up to a huge difference over a lifetime of working. 

What is Equal Pay Day? 

Equal Pay Day is a symbolic day dedicated to raising awareness of the gender pay gap by highlighting that women must work longer than men to earn the same amount.

When is Equal Pay Day in Canada?

This year, Equal Pay Day falls on April 16, 2024. It symbolizes how far into the next year the average woman must work in order to have earned what the average man had earned in the previous year.

What causes the gender pay gap? 

Historically, the wage gap could be explained by the belief that men were the breadwinners and women caregivers. Women had lower levels of education, there were fewer women in the workforce, and those who worked were concentrated in traditionally female (and therefore lower-paying) industries, such as clerical and factory work. 

There were also cultural assumptions that women had better aptitudes or were more suited for menial and repetitive clerical work (Check out this podcast on how that idea still exists. Siri… Alexa. What do they have in common? They’re the modern version of a clerical assistant. And they’re female voices).

Then the 1960s and 1970s saw a world of firsts for women—first female Prime Minister, first woman in space, the first female Supreme Court appointment— and women pursued post-secondary education in droves. This higher education opened doors to professions traditionally dominated by men. 

Human capital (the idea that skills, talent, experience, and knowledge helps a person be productive) could no longer be the reason for the pay gap. And yet while the wage gap narrowed, it hit a plateau and stayed there. 

There is no one reason for the wage gap, but many. According to a recent study from Denmark, the disparity isn’t from being a woman, but from being a mother. Due to cultural norms that childcare is primarily “women’s work,” research shows that it’s more often women who switch to jobs and industries seen as more “family-friendly,” that is, more flexible for parents. This translates into lost opportunities for more hours, promotions and increased wages, commonly known as the “motherhood penalty.” Here’s the rub: the wage gap shrinks substantially for women without children.

Another study from Cornell in the U.S. found that women-dominated occupations and industries (“women’s work,” such as education and social services) pay less than men’s (think engineering, technology and business), despite accounting for similar education and experience. Even women in skilled trades earn about half of what men do, mainly because they are concentrated in lower-paying fields, such as cooking, baking and hairstyling. Then there’s women’s reluctance to negotiate over salaries, raises, or promotions, due to conditioning that it makes them pushy or overbearing.

The wage gap doesn’t only affect adult women; according to a study by Girl Guides of Canada, the wage gap starts much earlier. Girls between 12 and 18 reported earning $3.00 per hour less for full-time summer work than boys. Girls were also clustered in lower-paid “pink ghetto jobs,” such as caring for others (babysitting or eldercare), food and beverage, and retail, while boys dominated the maintenance, gardening or grounds-keeping job sector.

Read more: What is the pink tax? A guide for teens.

How does the gender pay gap affect society? 

The impacts of the pay gap are far-reaching: not only do women have less money to spend and save during their working years, but their lower incomes and intermittent career paths hurt them into retirement. Women typically have access to lower savings and benefits, such as the Canada Pension Plan, as payouts are determined by your contributions over your working life.

This disparity was made worse by the COVID-19 pandemic. According to a report by RBC Economics, by April 2020 an estimated 1.5 million women had lost their jobs and workforce participation dipped to only 55 per cent—the lowest since the mid-1980s. 

The majority of losses happened in hotel, food services and retail—industries dominated by women and less conducive to working from home. In comparison, men in professional, scientific, and technical businesses fared better, where working from home was much easier, or in industries deemed essential, such as construction. 

Women are also more likely to “fall out” of the labour force; by October, almost 21,000 women chose not to return to work, largely because of childcare responsibilities with kids learning from home.

Tips for talking to kids and teens about the wage gap

As the Girl Guides study shows, the wage gap could start as early as adolescence. But even at home, some parents may unconsciously assign chores along gender lines (cleaning or cooking for girls, yard work and home maintenance for boys). Chores are a great way to start teaching kids about gender equality. When assigning tasks, ensure both boys and girls are helping equally and complete tasks inside and outside the home–mowing the lawn for girls, laundry for boys. 

Talking about money is often seen as “taboo,” but pay transparency, or openly sharing details about compensation, can go a long way to help narrow the wage gap. Teaching tweens and teens, especially girls, that asking potential employers about pay rates before accepting a job isn’t unladylike, but a necessity.

Teaching kids (especially girls) to negotiate helps them learn a valuable skill that can significantly affect their income over their lifetime. 

Job hunting is tough, regardless of age, so reminding kids of their value is key. If your tween or teen is thinking about a summer job traditionally dominated by boys (maybe landscaping or a soccer referee), tell her to go for it! Then coach them to ask for an outline of expectations, so they are clear on their duties—and what they’re being paid for.

Girls are a huge part of our future workforce and teaching tweens and teens about the pay gap now helps to build a future where they won’t need an Equal Pay Day.

Download Mydoh and help build the foundation of financial literacy for your kids and teenagers.