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The Registered Education Savings Plan (RESP) continues to gain ground as a source of funding post-secondary education for students. In addition, for 70% of the 18- to 24-year-olds who benefited from an RESP, these funds were a decisive incentive, reveals the 2019 Universitas Barometer, conducted in collaboration with the survey firm CROP.
According to data collected in 2017,1 the cost of post-secondary education ranges from $35,518 (two years of CEGEP) to $99,000 (five-year education) for students living away from home. Unsurprisingly, the Universitas Barometer reveals that a majority of young people (69%) are worried about the financial burden of their education. Among the means of financing used by students, the RESP has increased by 6 percentage points over the past three years, from 22% in 2016 to 28% in 2018.
However, while more students tapped into RESP funds to pay for school, they had to rely less on extra financial support from their parents. The Universitas Barometer reveals that ad hoc monetary support from parents is down in 2018 (47%) compared to 2016 (53%).
Students who had the chance to benefit from an RESP state that they were particularly motivated to continue their education thanks to this source of funding: 70% of them identified the RESP as a determining factor in the pursuit of their studies. Since 2016, the RESP’s status as a source of motivation among students has increased significantly, from 62% to 70%.
The RESP opened on their behalf allows young people to focus on their education by alleviating financial strain. “When your child starts post-secondary education, you want them to focus on what really matters: their academic success. The RESP helps reduce the financial strain for students, but also for parents who prepared for this important milestone,” says Marjorie Larouche, senior advisor of communications and public relations at Universitas.
Paradoxically, although the RESP is gaining ground as a source of funding for students, fewer parents in Quebec are saving for post-secondary education. The Universitas Barometer reveals that 35% say they have no education savings at all. In comparing numbers, this percentage was 28% in 2017 and 27% in 2016. For the RESP specifically, this decline translates into a 7-point drop, from 59% in 2016 and 2017 to 52% in 2018.
Parents who aren’t saving are mainly citing lack of financial resources to explain the situation (56%). On the other hand, just over a third of them intend to start saving in the future. “We can be delighted that, among the parents who are saving for education, the RESP remains by far the preferred investment vehicle (79%),” continues Marjorie Larouche. The main incentive for their choice is the grant money paid by the government, which supplements RESP savings by up to $12,800 per child.2
The Universitas Barometer is designed to provide an annual outlook on economic indicators linked to post-secondary education, including the main barriers to and motivating factors for the pursuit of post-secondary education, estimated costs according to young people and their parents, financial planning and support, and back to school expenses. For more information about the Barometer, visit universitas.ca/barometer.
Universitas Barometer 2019: The CROP survey polled 1,030 Quebecers online using a web-based form between November 8 and 26, 2018.
Universitas Barometer 2018: The CROP survey polled 1,032 Quebecers online using a web-based form between November 9 and 17, 2017.
Universitas Barometer 2017: The CROP survey polled 1,000 Quebecers online using a web-based form between October 20 and 28, 2016.