New outlook reveals more than $100K cost of 4-year college course likely in 2025
Most major financial goals are not set in stone - buying a home, getting married, even retirement can be delayed if necessary – but parents saving for children’s education have a more rigid timescale.
And when the cost of living is forcing tough spending and saving choices, most Canadian parents who took part in a new survey said they do what parents usually do – put their kids’ needs first.
Almost nine in ten respondents to the Embark research said their expenses rose in 2024 compared to previous years, adding an extra $12,880 to costs, with groceries and household essentials (71%), gas or transportation (53%), housing–including mortgage payments or rent (52%), debt payments (40%), clothing and personal upkeep (27%), cell phone bills (26%) and childcare (21%) most damaging to their savings goals.
That has limited the ability to save with 54% saying they are off-track in this regard and 77% saying saving in general is overwhelming right now.
Almost half said they were not on target in saving for their child(ren)’s education but among those that have been able to save at all 47% had prioritized a college fund over their own goals such as retirement savings (43%) and their mortgage (24%). Two thirds expect to be on track with education savings by the time it’s needed.
That said, seven in ten said saving for education costs is harder right now, 43% have stopped saving for this, and 29% had dipped into education savings to pay other costs.
For overall savings goals, 22% said they were completely off track while 26% were generally on track, 12% were completely on track, and just 3% were saving above their goals. These percentages were similar for education savings.
“Time and time again we see that Canadians find education to be such an important savings priority and something that is key to their child’s future success, even in today’s financial environment,” said Andrew Lo, CEO of Embark. “With the cost of an education exceeding $100,000 in many provinces and going nowhere but up over the next few years, parents are doing all they can to ensure their children can prepare themselves for the real world without having to take on serious debt.”
Embark’s research previously found that 82% of students find the financial realities of a post-secondary education to be overwhelming.
$100K milestone
In 2025, Embark forecasts the average cost of a four-year university education in Canada to reach $101,319 when factoring in tuition, residence, living expenses, textbooks and school supplies; the first time the value has ever crossed the $100,000 mark.
But for new parents, the next 18 years is set to see this cost rise to $137,490, a 38% increase.
“As a country and community, we need to do more to help ensure that future generations have all the help they need to succeed in life,” continued Lo. “The $7,200 that families can get in government grants when saving in an RESP is a great start to help bridge the gap. However, with the cost of one year’s tuition jumping by 23 per cent in the last 10 years, we may need to consider what else can be done, like increasing the RESP’s maximum contribution limit of $50,000, providing further incentives or reducing other common barriers to saving.”
