Warning: the following article contains material that may be disturbing to some readers who have kids under age 17 and have not thought about the cost of university.\n A university degree is pretty well a must-have, given the state of the job market for young people today. But many students and their parents find it increasingly difficult to pay for one. That does not surprise me in the least, given that my son has just completed year three of a four-year degree at a major university in Ontario.\n So what is it going to cost you?\n Let’s start with tuition. According to a September 2013 Statistics Canada report on university tuition fees, on average undergraduate students in Canada paid $5,772 in tuition in 2013/2014. That’s up 3.3% from 2012/2013, when it was $5,586.\n Depending on the province, the amount could vary considerably from that (see amounts below). And that figure is just for tuition. There are many more costs to consider. \n First, there are compulsory fees that vary from institution to institution. These include fees for athletics, health services, student associations, etc. According to Statistics Canada, these additional fees averaged $817 in 2013/2014.\n Assuming your son or daughter doesn’t want to live at home, there will also be room and board costs.\n Most kids live in residence the first year. I’m looking at a rate chart from the residence admissions office of an Ontario university and the cost of a room ranges from $6,180 to $8,670. Meal plans can be anywhere from $1,900 to $2,480. Additional expenses might include books, computers and software. And of course kids will socialize, which costs money too.\n In senior years, they may want to move out of residence into a house, which may reduce costs somewhat. But you’ll have other expenses such as moving costs, furniture, stuff for the kitchen, etc., and you’ll usually have to pay rent for 12 months even though the place will be used for only eight.\n Let’s add up a low-cost example. Tuition, $5,700; additional compulsory fees, $800; residence, $6,200; meals, $1,900; and other costs, $1,400. That totals $16,000.\n Depending where your teen attends university, the cost could be $16,000, but at the high end it could reach $20,000 or more per year. That’s $64,000 to $80,000 over four years.\n The most common method of financing university is the registered education savings plan (RESP), which is popular because of the Canada education savings grant (CESG). Since 2007 there has been no annual limit for RESP contributions, but the lifetime limit on contributions to all RESPs for a beneficiary is $50,000.\n The basic CESG amount for each qualifying beneficiary is 20% of the annual contributions to all eligible RESPs for a beneficiary to a maximum annual CESG grant of $500 ($1,000 if there is unused grant room from a previous year) and a lifetime limit of $7,200. Annual contributions of $2,500 yield the maximum annual grant, so most people don’t exceed it.\n According to Kurt Rosentreter, a financial adviser with Manulife Securities, most people don’t accumulate nearly enough for their child’s university, even with the CESG. The three main reasons are inflation, poor investment returns and high fees.\n Saving $2,500 a year for 16 years — from birth to university entrance — including the CESG, would yield $47,200. An average annual rate of return of 3.45% after fees would be required to build an RESP to $64,000. Many people, however, are not getting such a return.\n Another key issue is inflation. If you started now, assuming inflation of only 2% per year, the minimum amount of $64,000 would have escalated to $87,800 by the time junior finishes high school.\n So what can be done? Get your children in on the discussion. Stress the importance of good high school marks that may lead to scholarships. Have them find summer jobs to help with costs and have them control their discretionary spending.\n University may be the best four years of their lives, and with some planning it doesn’t have to be the worst four of yours.\n \n \n David Trahair, CPA, CA, is a financial writer, speaker and author of five books on personal financial issues (his website is http://www.trahair.com).