Canadian parents are increasingly confronted with the reality of financially supporting their children into adulthood. And according to a new poll, they’re coming to that realization even before their children officially enter the age of majority.
In the Student Debt Survey, a Leger poll of over 1,500 Canadians conducted on behalf of FP Canada, 82% of Canadians with children under 18 years old say they intend to assist their children with post-secondary costs.
Compared to a similar survey conducted in 2017, the results this year show that parents are expecting an even bigger impact on their finances. Forty-eight per cent of parents say that they expect their retirement to be postponed as a result of providing this financial support, as compared to 41% who said the same thing in FP Canada’s 2017 survey. Another 42% said they expect it will prevent them from paying off debt, slightly more than the 40% observed in 2017.
That expectation isn’t so far outside the realm of reality. Two thirds (67%) of Canadians with children older than 18 years old said they’ve helped their children with post-secondary costs. Among those, 20% say it has prevented them from paying off debt; the number is higher in Ontario (26%) and Atlantic Canada (23%). Similarly, 16% of parents who’ve extended such assistance to their children said it has forced a delay in their retirement; the number is even higher among those in Atlantic Canada (23%), Manitoba (19%), and Saskatchewan (19%).
According to FP Canada, part of the problem is a lack of familiarity with opportunities to plan for educational expenses. Just a third of the respondents to the survey said they are familiar with tax credits, grants, and other financial assistance programs associated with post-secondary costs.
“Between tuition, textbooks, housing and meals, post-secondary education comes with a big price tag. It's clear that many Canadians are making major financial sacrifices to help their kids with these costs,” said Kelley Keehn, personal finance expert and Consumer Advocate for FP Canada. She added that a certified financial planner can help Canadians take full advantage of the tax credits and other tools within their reach.
Looking at the debt load borne by the younger generation, around one third (31%) of the parents surveyed said their children graduated or will graduate from college or university with over $10,000 in student debt. Those levels of debt are particularly prevalent among those living in Atlantic Canada (43%) and Alberta (37%).
That burden hanging over many young Canadians’ heads is causing them to put off some major milestones in life. According to FP Canada, 19% of Canadians with adult children said student debt has forced their children to postpone buying a home, while 10% said it has delayed their children from moving out. Adult children in Atlantic Canada were found to have the highest likelihood of having postponed homeownership (25%), while those in Ontario were most likely to have put off moving out (15%).
Canadians with children under 18 are even more pessimistic. More than half said they expect student debt to force their kids to defer buying a home (51%); the percentages were even higher in BC (61%), Alberta (58%), and Ontario (58%). Meanwhile, 42% of all Canadians with children under 18 surveyed said they expect their kids to stay at home longer because of student debt.
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