RESP : What does $350 Look like ?

Continuing on with my discussions about the relative cost of school and such, I have found another interesting example for all of those parents out there that are wondering, “Should I start saving for my child’s post-secondary education ?”. I have already scratch this topic a little with, So That is What $50,000 looks Like, but read on, it will be entertaining.

University Costs for RESP

Those Two Books Cost $350.00
(the computer is not included in that price)

First, a question: What does $350 look like at University (or to a parent of a child who is at College/University) ? Look at the picture on the right hand side of this, those two books. Those two books represent $350 or so in costs (the computer on top of the books is a lot more).

Big deal, says you? Yes, maybe that isn’t that expensive, except those two books are for only 1 course, and in some programs like Engineering or Computer Science there can be many courses with many very high-priced texts. A good number to remember is typically programs have at least 5 courses per term, with two terms a year and a four-year program, you have about 40 course sections that could have some expensive books to buy (or even more interesting expensive lab fees).

More numbers for thought would be that the Basic CESG (grant for your RESP) for a year is $500 (if you have max’ed out your deposits to your child’s RESP), so these two books pretty much almost ate that whole grant.

Do you still think an RESP is something that can wait for when your child gets older?

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University Cost How Much ?

Back in 2005, long before my oldest was going to start University I wrote University is Going to Cost How Much? Outlining from an article from the University of Waterloo, possible University costs over the four years of my daughters’ careers, little did I know how much was missed by me. This Throwback Thursday I will reexamine the naive view I had of the costs that were going to face me (financially), and hopefully help those still wondering how much this might cost, when their children go to a post secondary school.

Surprisingly the numbers quoted by the University of Waterloo Web Page aren’t really that out of whack (at the time):

  • A student in the Co-Op program living on campus would pay $10K-12K
  • Living Off-campus they’d pay $7K-$8K
  • If they lived at home $4K-6K

Now remember this was about 9 years ago, and the numbers quoted are for a 4 month stint (so the real annual numbers are doubled).

Graduates Moving

Doesn’t Look Expensive, does it?

The interesting extra costs that I learned about (the hard way) are:

  • Computing device of some kind, be it a tablet, laptop, desktop or all of them, is going to cost you and you had better make sure you have a reliable I.T. set up (all 3 of my daughters had their laptops blow up during final exams). You will more likely than not have to replace those devices after about 2 years. That is about a $400-$2000 cost (every two  years, not including any I.T. issues, like hard drive failures and the like).
  • Trips home, if the kids are not living at home, they will want to come home, and depending on how far away they live this cost could add up to more than $1000 per 4 month term. Yes, we can all say, “They should just stay there for Thanksgiving!”, and other hard-line statements, but until you have lived the life, careful about your comments.
  • Fees and such are an interesting add-on that most universities charge. Some you can try to get refunds on (if your Health insurance covers your kids, then don’t pay for the University’s Health insurance as well), however there are many “activity fees” that are non-refundable as well, so watch out for those they can add up.
  • Living off campus can be cheaper, unless you have to furnish that apartment, and supply plates, pots, pans, etc., as well. A one time cost, but still not an expense to forget about (yes used furniture places are great for this to save money). Other incidental costs like Internet Access and heating bills add up as well, figure out a monthly budget with your kids so they learn how to live within their means.

If your child is looking at a Co-Op program, talk with them about the importance of learning to be self-sustaining, and how proud they might feel paying for all of their education themselves, they might fall for that ploy too.

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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.

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Tax Fun: Moving Costs for Students

Today (April 30th) is usually the last day of the lease for students, especially those about to graduate.

The trick most landlords get students to do is to sign their lease so that they must pay for the summer months if they want the rental for the next school year (and except in a few University towns, there is little chance of subletting those rentals), thus their lease usually ends on April 30th.

The one thing for those graduating students to remember is that if they are moving out of their University living quarters and are moving to a new city to get a job, that is a moving expense, that is deductible (unless  your employer reimburses you for it, then it also becomes income too).

Graduates Moving

Graduates Moving Costs

What does the CRA say exactly about this?

Who can claim moving expenses?

If you have moved and established a new home to work or to run a business at a new location, you can claim eligible moving expenses.

You can also claim moving expenses if you moved to take courses as a student in full-time attendance enrolled in a post-secondary program at a university, college, or other educational institution.

To qualify, your new home must be at least 40 kilometres (by the shortest usual public route) closer to your new place of work or school. Complete Part 2 of Form T1-M to determine if you meet the distance requirement to claim your moving expenses. If the result on line 3 is less than 40 kilometres, you do not qualify to claim your moving expenses.

You must complete a separate Form T1-M for each eligible move and enter on line 219 of your return, the total of all amounts from line 23 in Part 4 of each form.

Can you claim this every year if you move back home and then back to school? I don’t think so, however, if you graduate from one school and then start at a new school (in a different city) that might be a very different story.

Oh and your taxes are due very soon as well!

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Long Distance Laptop Repair

Last week my youngest daughter called to say that her laptop computer was in distress, and was not working, due to the batter being dead, and the charging unit unable to charge it. This continues the family tradition of:

By the end of the 2nd University year, all laptops will crash or become  unusable at a time when an important assignment must  be completed, which results in the purchase of a replacement computer either immediately, or shortly after that time.

I kid you not, that is exactly what has happened to all 3 of my daughters. The first two laptops were HP (I wrote about my oldest daughters problems in Student Computer Safety) and this last one is a Dell, all three have had issues with the charging unit, the system overheating and/or hard disk crashes (i.e. the dreaded BSOD (Blue Screen of Death). The problem is that portable computing is now “table stakes” for most University Students (unfortunately), so (for now) a laptop computer is a necessary (expensive) evil.

Old Laptop

A Rehabilitated formerly dead Laptop from the “Big Cajun Man Laptop Graveyard”

I ended up having to buy another Dell Laptop to send my daughter back to school with, and after some judicious “Dad’s I.T.” wizardry, I was able to extract all the important data from the laptop’s hard drive.

I am now left with a “dead” laptop however Costco is now “fixing” the broken computer (thanks to their Concierge warranty which doubles the normal 1 year warranty for most computers), but the methodology to make the “fix” happen is quite puzzling (to me). I had to call someone, who took down all the details of what transpired (and verified I had in fact bought this PC at Costco). Once it was determined that the computer needed fixing (which seemed obvious to me, but I had to convince the person at the other end of the phone that), the young lady said the PC would be serviced and I would receive a Box very soon.

The Box arrived, shipped via Purolator to the house (naturally left at the front door, without ringing the door bell). This magical Box, was padded with styrofoam, but it had tear aways so that the computer fit in it properly. The box also included a whole bunch of documentation for me to fill in, and finally it included a pre-paid packing label (for Purolator) to put on the box.

I filled in all forms, my wife made sure the computer fit in the box, and we included all the requested documentation(that we could find). We taped the Box shut, put the shipping label on it, and took it to the Purolator drop off site, and away it went. It is now whisking off to a repair place in Toronto, that will hopefully fix the computer, and then ship it back to me (presumably by Purolator).

My only question is, how can this be cost effective?!? I suppose it must be, or Costco wouldn’t do it this way (they seem to be a very smart retailing firm), but it leaves me scratching my head (and hoping to see a Purolator truck showing up at the house soon). Other retailers follow this model, so it must be that they have very cheap rates with the courier companies, and a well negotiated support contract with whoever is fixing the computers.

Assuming the machine can be fixed I now have a 3rd lap top to add to the “Big Cajun Laptop Graveyard”.  I  point out that this piece was actually written on one of those formerly derelict computers (picture above).

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