Survey forecasts university costs to exceed $100,000 in 2025 as parents struggle to save
Embark, Canada’s education savings and planning company, revealed that families face significant financial challenges in saving for their children’s education amid rising inflation and living costs.
This 2024, 88 percent of Canadian parents reported higher household expenses, with an average increase of $12,880 compared to previous years.
These rising costs have left many struggling to save, with 54 percent of parents admitting they were “off-track” in their general savings efforts. Nearly half (49 percent) said they were also off-track in saving for their child’s education.
When asked about their overall financial performance in 2024, 22 percent of parents gave themselves an F grade for savings.
Only 5 percent felt they had exceeded their education savings goals, while 14 percent said they were completely on track.
The survey also found that 77 percent of parents considered saving overwhelming in 2024. The most common expenses that limited their ability to save included groceries and household essentials (71 percent), transportation (53 percent), housing (52 percent), and debt payments (40 percent).
Despite these challenges, saving for education remained a top priority for Canadian parents. Among those who managed to save, 47 percent allocated funds to their child’s education savings, compared to 43 percent for retirement and 24 percent for their mortgage.
“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.
However, 43 percent of parents said they stopped saving for their child’s education due to rising costs. Additionally, 29 percent reported dipping into education savings to cover other expenses.
Despite this, 66 percent of respondents remained optimistic, believing they could achieve their education savings goals by the time their child starts post-secondary education.
Embark forecasts the average cost of a four-year university degree in Canada to reach $101,319 in 2025, including tuition, residence, living expenses, textbooks, and supplies. This marks the first time the cost has surpassed $100,000.
By 2042, this cost is expected to rise to $137,490, a 36 percent increase compared to today.
Students in Nova Scotia, New Brunswick, and Ontario are projected to pay the highest costs for a university education in 2025, while those in Newfoundland and Labrador, British Columbia, and Quebec will pay the least.
“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,” said Lo.
Lo offered three key strategies for families to improve their education savings:
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Be consistent: Set up automatic deposits and adjust contributions based on your financial situation. Even $20 a month can grow into significant savings over time.
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Plan ahead: Estimate future education costs and determine your goals using tools like Embark’s digital platform.
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Involve others: Encourage friends and family to contribute to RESPs. Embark’s RESP gifting feature allows loved ones to help build a child’s education savings.
“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,” Lo added.
This insight comes from its annual forecast on the cost of a four-year university degree in Canada and a survey of over 1,000 parents.
