Wealthy Pay More Than Half of Post-Secondary Costspar Andrew Rickard | August 31 2015 10:40AM
A survey conducted by BMO Private Banking has found that, on average, wealthy parents pay 69% of their children’s post-secondary school costs. Only 12% of all educational and living expenses will come from the child’s own savings, while 6% will come from scholarships and 4% will be contributed by relatives.
The poll of more than 300 Canadians who have at least $1 million in investable assets also revealed that wealthy people were more concerned about whether their children would be able to live comfortably after graduation than they were about the grades they received; 36% of respondents said they were most worried about their children's ability to maintain their standard of living after finishing their studies and 35% said they were concerned about whether they would find a job after graduation, while 27% said they were most anxious about their ability to earn high grades.
The BMO survey also revealed that only 16% of affluent Canadians send their children to private school from kindergarten to grade 12. Of those who do choose to send their children to private school, only 23% said they have had to cut corners in other areas to pay for the tuition. The other 77% say that private school expenses have put minimal strain on their finances.
Asked why they send they send their children to private school (respondents could give more than one answer), 73% of wealthy parents said they wanted to provide their children with a better education, while others wanted to offer their kids a better chance of success at university (49%) or in their career (31%). Another 28% of those surveyed thought private school would help their children form a valuable network.
Parents have eighteen years to plan for university or college expenses, but have much less time to ensure they have a wealth plan that accounts for a child’s private school tuition,” comments Myra Cridland, Head of BMO Private Banking. “It’s a good idea to think about the type of elementary and secondary schooling you’d like your children to receive as early as possible so you can incorporate an education component into your wealth plan and begin earmarking funds towards tuition payments.”