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Going to school is expensive—but so are extracurriculars. This financial guide covers how to pay for school, for both parents and students.
Not all lessons are learned in the classroom—ain’t that the truth. For most Canadian students, going to post-secondary school is not just when they learn about their future career, but it’s also when many get their first credit card and become responsible for rent, groceries and other living expenses. Many also start withdrawing from their registered education savings plan (RESP) and paying tuition—a bill big enough to rival other major purchases such as a car or, eventually, their first home. And, lastly, the start of post-secondary education is also an opportunity for parents to set their (adult) children up for future success with money. And with that in mind, this comprehensive guide includes articles for those going to school and those who are supporting them (including emotionally).
The MoneySense Student Money Guide begins with the early years: How to help children understand the value of money; how to set them up with their first bank accounts; and how to make use of RESPs. Find these topics and more in the sections for parents and guardians.
Then, for kids who are grown and ready for college, university or trade school, we cover applying for student loans, scholarships and bursaries; covering tuition costs; handling housing expenses; withdrawing from an RESP, and more.
MoneySense is an award-winning magazine, helping Canadians navigate money matters since 1999. Our editorial team of trained journalists works closely with leading personal finance experts in Canada. To help you find the best financial products, we compare the offerings of major institutions, including banks, credit unions and card issuers. Learn more about our advertising and trusted partners.
What do you need help with today? Click on one of the topics below to jump to the corresponding section in this guide:
Whether your kids are fast approaching post-secondary school or they’re just graduating from kindergarten, they’ll be better prepped for school as soon as you create a savings plan.
You have a few different options to help support your children financially while they’re attending post-secondary school. The most common savings tool for children’s education is an RESP. This is a tax-deferred savings plan used to fund costs like tuition, books, transportation and other expenses for trade school, college or university.
You can also contribute to a tax-free savings account (TFSA) for a child or grandchild. TFSA withdrawals can be made anytime and used for education, a home down payment or other purposes. If you’ve already maxed out your child’s RESP, you can use a TFSA to save more. Not only does the money inside a TFSA grow tax-free, but there’s no tax when you withdraw. However, there are annual contribution limits.
Preparation and practice are the keys to mastering any skill—including money management. Here we break down, based on age, what to teach the kids in your life (it does take a village, after all).
Knowing the value of a dollar helps set kids up for a better relationship with money. Getting them started with their own bank account helps foster that knowledge. Look for a kids’ bank account with low or no fees, since the last thing you want is for fees to eat up their smaller contributions. If you can find an account that pays interest, even better. Plus, opening an account will help them learn about banking and form good habits long before they head off to university.
A piggy bank used to be the go-to way to teach children the value of saving and the costs of spending. But since fiat currency is becoming an increasingly digital endeavour, teaching methods should adjust to that. We outline six simple strategies for teaching kids about money, including spending, saving, budgeting and earning. The article also offers ideas for families who don’t want to use allowances to encourage kids to do household chores—every member should help out!
An RESP is an investment account geared towards saving for a child’s education. It allows investments inside the account to grow and earn money tax-sheltered, meaning that capital gains, interest and dividend payments won’t be taxed until the funds are withdrawn (and when they are, they’ll be taxed in the hands of the child). A major benefit of this account: The government encourages you to save by kicking in a grant of up to $7,200 over the life of the plan—and potentially more if your family has a low income.
Parents know that no two kids are the same. One kid may be headed off to culinary school while another pursues academia and another goes to an arts college. Different educational paths come with different costs and challenges. Read the advice from a financial planner on how to pay for different types of schooling.
When it’s time to cover the costs of post-secondary tuition, housing and books, you’ll want to know the steps involved in withdrawing from your family RESP. Regardless of who made the contributions—a parent, grandparent, other family member or family friend—the withdrawals are usually taxed based on the student’s income (their marginal tax rate). Typically, a student’s income is so low they will pay little to no tax. That’s the top-level strategy, but there are other planner-approved tips to help you maximize your RESP savings and returns. (More on that below.)
There are many paths to funding your education, aside from your own savings and your parents’ contributions. Look for bursaries, scholarships, grants and provincial loans that may be available to you. Check with your financial aid office.
If you need to fund your post-secondary education but don’t have enough savings, you can use student loans to fully or partially cover costs, depending on your approved amount. Provincial government loans, such as the Ontario Student Assistance Program (OSAP), work in conjunction with federal loan and grant programs to help you pursue the education you want, with a relatively low interest rate. And, as of April 1, 2023, the federal government has eliminated interest for Canada Student Loans and Canada Apprentice Loans under the Canada Student Financial Assistance Program. Here is how to apply for loans and grants for Canadian students.
Even if you have scholarships, other funding or a steady paycheque from part-time work, you may still have a tight budget throughout the academic year. Several strategies can help you save money and take advantage of your student status, including making the most of student discounts and finding cheaper travel and textbook options. Read about money-saving strategies.
If you’re looking to build your credit score while earning school credits (#dadjokes), there’s a selection of no-fee cards with useful perks, like earning cash back on groceries or free tickets at the movies, that can help make student life more fun. We’ve rounded up the best student credit cards in Canada right now.
When budgets are tight, the last thing you want is to be hit with a $20 monthly fee (that’s two burrito dinners!). These low- and no-fee accounts are perfect for students, as they offer useful features, like unlimited transactions, and points on essential purchases like gas. Some even include sign-up promotions that offer cold, hard cash. Read our complete list of the best bank accounts in Canada—and the must-know features of each.
School isn’t cheap. Paying your tuition is the first financial goal, and to do that you will need to have a handle on all your finances. Learn how to save money while still in school, and even earn some extra cash.
If you’re looking to move out or gain some space, consider these things first: Can you afford to live on your own? Find out how to plan for the expected (and unexpected) expenses with this column on the real costs of moving out.
If you can’t afford to pay your student loans right away (it happens!), we’ve outlined other approaches on what to do next—while keeping interest payments low and your credit score intact.
Whether you’ve taken out a Canada Student Loan, a provincial or territorial student loan, a bank loan and/or a line of credit to fund your education, you’ll need to repay that once you’ve finished school. Considering that interest usually starts accumulating once you’ve ended your studies, paying off your loans should be a top priority. We crunched the numbers to figure out the best strategies to pay your tuition and pay off your student loans with the least amount of interest.
You may find, especially when you first start working, everyone wants your business, including robo-advisors (we see you, targeted TikTok ads). Should you use your extra cash flow to invest or to pay off your student loans? Great question, but before you use social media to find out, consider the smart insight in this article from Certified Financial Planner Jason Heath: Should you pay off student debt before investing?
Some lucky students may have leftover money in their RESP. You can leave it there for a while if you think you might pursue additional studies, or if it’s a family RESP and your siblings haven’t finished school. But if you’re planning to close the account read: What to do when you have insufficient or unused RESP funds.
This is an editorially driven article or content package, presented with financial support from an advertiser. The advertiser has no influence on the creation of the content.
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This is a really excellent guide. Thanks for publishing it.
Should have given more emphasis on the Canada Learning Bond that students from low income families and born after Jan. 1,2004 , can apply , retroactively, for $2,000 if the parent(s) had not set up a RESP for their child. Many students from low income families are just not aware that $2,000 , in “free money” is waiting for them by way of a simple application process.
thank you for this very interesting.