Back to School Week

In some parts of Canada school is already “back in” but in Ottawa, we have another week until school is back in session, and I am enjoying some time off, but for those who may not be up to date with my encyclopedic library of posts, here are a few good ones for your back to school planning this week.

It just all adds up don't it?

It just all adds up don’t it?

When my kids were going to High School I was never very happy with all the hidden costs, little did I know how that was nothing compared to higher eduction:

 I Thought Public School was Free?

I was running low on ideas and asked my wife for a topic for today’s blog and she came up with the cost of our “free” education system. She had been out shopping for back to school supplies (a HUGE industry in itself) and was telling me about all the “bargains” she was going to have to find to pay for all the unwritten educational expenses.

(click here for the many hidden costs in your Public Education)

September is actually a financial mayhem month for those with kids going to school. I am sure one year September will not be like this, and I may even miss it, but not this year.

Wake Me Up When September Ends

Not just a very good song by Green Day, but also an anthem in my personal financial life. September seems to create a “perfect storm” of debt load that appears every year and I think I can give you the list of the things that are the causes:

(to see the list of mayhem click here to read the whole article)

For University Students going back to school:

Advice is Best Served with Water

It is the magical Back to School season so many of my compatriots in the Personal Finance Blog world have taken it upon themselves to pass on sage advice to the future leaders of our world.  The advice given is very good and I wish someone had told me some of this advice before I started off at University, but then again, I most likely wouldn’t have listened (after all I was much smarter back then).

(click here for the rest of this piece of advice all University Students could use)

For more interesting ideas about back to school and RESPs, remember to read my entire RESP Page, which outlines the fun and games I have had setting up, putting money into and then attempting to extricate money from an RESP.


Canadian Students Pay Net Zero Tuition ?

The Higher Education Strategy Associates and specifically Alex Usher feel that Canadian Students (in higher education) have it better than any generation previously according to their publication Canadian Students Pay Net Zero Tuition.

The arithmetic put forward is quite simple:

An interesting little bit of arithmetic (note I do not call in Mathematics), but a little simplistic in some ways as well.

Are We Graduating a Generation of Debtors ?

Are We Graduating a Generation of Debtors ?

Data ignored in this study  are:

  • Accommodation and living expenses, how many students live away from home ? One might argue it is the student’s choice to move away from home to study “abroad” as it were, however many programs are only offered in specific places, and Canada has many Universities, but not one in every town.
  • Books and similar supplies are not really mentioned. Yes, many E-books should be cheaper, but from my small sample they really aren’t (but I do agree they are easier to pack up at the end of a school term).

The student assistance model seems to have a flawed assumption that all the “$10B” is offered to every student, which is really not so.

  1. They mention "...$350 million or so in First Nations’ Band Funding under the Post-Secondary Student Support Program ...", my kids (and a majority of students) have no rights to make claims against this.
  2. Then we have "...universities collectively gave out just over $1.5 billion in scholarships...", again these are not necessarily available to all students, some are Merit based (i.e. marks), some are activity based (athletes, volunteering, etc.,) and some are Academic Area based (e.g. Scholarships specifically for Electrical Engineering students, etc.,)
  3. Grants? "... $350 million for provincial merit grants and tri-council scholarships ..." , again many kids are excluded from those grants because their parents are too affluent, and thus the student is not deserving to receive that grant.

I am not really disputing the numbers, I think the studies are quite comprehensive, but also naive in my opinion. I do like the follow-up article by Mr. Usher Good and Bad Arguments Against Education Tax Credits.

Most of my readers already know my opinions of the sometimes oppressive costs of Post Secondary Education (check out my RESP menu item and scroll down a bit), I think the statement about Net Zero Tuition is hokum, but I do agree Canada tries to make Post Secondary Education less fiscally destructive than in the U.S., but I think Canada can do better. A University Graduate with $50,000 in debt to start paying off the day they graduate is a worrisome concept, in my opinion.

My real opinion is that Post-secondary education should be available to anyone who wants to do it, at no cost, I guess that is my Quebecois roots showing.


The Tuition Circle

Sunday, my wife and I and my two daughters (who are still at University) sat at the kitchen table to tackle the odious task of applying for OSAP grants and paying for tuition for the coming school term.

This whole thing took about 1 and a half hours and at the end of it we had to:

This is not very cheap

This is not very cheap

  • Reference the school(s) web site(s) to find the fees that need to be paid (and evidently library fines too). At the end of it, we actually had to check on 3 different University sites (one of my daughters is taking a course that includes courses from two different schools). This was just to get Tuition, if you have a child in residence you may have to check in different parts of the web site to find all the fees.
  • Have copies of mine and my wife’s latest tax forms for the OSAP application.
  • Know how much your children have made this year as income.
  • Balances of any RESPs that you have set up for your kids
  • Have all the printers for all 3 computers you are using because you are going to be printing out forms for the OSAP application (no kidding my kids didn’t have the house printer set up).
  • A pen to sign all the forms for your kids.
  • The OSAP forms then have to be dropped off at school in some fashion or another, and if this is the first time your child is applying, they will either need a cheque or something form the bank for where the Grant/Loan will be put (or you can say have the money go directly to the school which cuts out this part of the fun and games)

At the end of this I had to pay the tuition but even that isn’t as easy as you think because one school allows me to pay with my Credit Card (hey I get PC Points from that so I am happy), however two of the other schools only allow me to pay on line with my bank, and in that case I need to know when the Tuition is due, because I am only going to pay that on the day it is due.

All in all, an interesting way to spend a Sunday afternoon. Oh and we haven’t looked at books and such either.


December is Here, think End of Year

I really should have been a sportscaster, I love that kind of cheap rhyming stuff.

With the year coming to an end, you need to think about a few tax related issues like:

  1. Quarterly tax payment if you are in that tax situation (I know a surprising number of folk who make tax payments quarterly).

    The Circle of Savings in Canada

  2. Make an RESP contributions if you can, nicer than a sweater for your kids and it will pay off nicely in the future. Check the CRA link on how much CESG you might get from the contribution as well (oh and if you have put $50K in there, you have maxed out).
  3. Make an RDSP payment to max out your contributions if you have a disabled loved one as well (remember you can also transfer from an RESP to an RDSP, so figure out which one you should put your money into).
  4. Make an RRSP payment, the sooner it’s in there, the sooner it starts to grow, and you escape all the broohaha and tom-foolery of RRSP season.
  5. How about your TFSA? Have you maxed out your inputs there? Sooner it’s in there, the sooner it starts growing tax-free, do that now.

You really have no excuse to say, “I have nothing to do financially in January”, now do you? Any other end of year financial fun I am missing?


RESP: The End Game

For my regular readers you have read along with the epic saga of the RESPs that I had opened, used, and depleted for my oldest daughter (and the journey continues for my other two daughters). At the end of this post I will include a link to many of these posts (or you could search my site for RESP as well). This drama would make Shakespeare or Homer proud, with its twists and turns, rules, forms and frustrations, however for my oldest daughter her Post Secondary Odyssey is complete (for now).

During her 4 year journey, she applied for Student Grants along the way (and actually received a few), however, the system (in Ontario) is such that you cannot receive OSAP (no not the Ontario Stereo Assistance Program) Grants without taking the Loans as well. I argued a few times with different disembodied voices on the phone (who used a tone which suggested I was either insane, a crackpot or just plain uniformed) that this was the case, if your daughter deserves a Grant she must also take the Student Loan as well. I would equate that to Homer’s Medusa in terms of dramatic silliness.

Every year after first year, each student who received a loan, receives a letter from the National Student Loans Service Centre saying, “It’s time to pay back your loans! (unless you went back to school, then you can ignore this letter)”. Each year we dutifully ignored that letter, until this year, and now the letter includes a plethora of forms on how to set up paying back your student loans.

Luckily with my daughter we actually put her loan money aside, to pay off the loan as soon as it became due, so I (or my wife more likely) dutifully started reading through the forms to figure out how to do this exact thing (i.e. make a lump sum payment to pay off the loan). This is not as easy as  you think. It seems easy to do, after you have made your first “installment” (where installment is a direct withdrawal from an account you have nominated, complete with a monthly interest charge accrued in that as well).

Here is where I now stand, I am attempting to have my daughter pay off her loan, without actually paying any interest charges, however, it is not clear how to do this. There is a question into the NSLSC folks asking that exact question, and after investigating on the TD Bill Paying portion of my on-line banking NSLSC is actually there to make payments too, so I am hoping, we can simply make this lump sum payment directly onto the loan, and thus it is all over and dealt with.

Am I confident this will be the case? No, my guess is my daughter will end up paying at least 1 month in interest charges while the system answers questions or gives confusing answers that foil our attempt to not pay interest, but hope does spring eternal.

Anybody else have any luck with all of this?

Some older RESP Posts from the Past:

There are others simply search for RESP on my search block and you will see them.


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