With September just around the corner, parents and students are getting set for the new school year. On this episode of Ratehub’s Canadian personal finance podcast, Real Money Talk, Tyler and current student Ben Dinsdale, sit down with Suzanne Tyson of Higher Ed Points.
Suzanne founded Higher Ed Points, allowing parents and friends of a post-secondary student to put reward points towards tuition and student loans. She believes that higher education is a right, and her organization works to make it accessible to everyone. We chat about ways of financing education, tips for making that bill easier, and how the current scholarship system can improve.
Not enough ways of financing education
Suzanne started Higher Ed Points seven years ago after spending time working in the scholarship world. She realized that although there was a lot of money out there, many students could not access it. Although funding was available to those with the fewest resources and the highest achieving students, many others often got left behind. She named this group the ‘middle 60’.
“10-20% of students are always going to get into that finalist pool (of scholarships) for merit-based marks, community service, sports awards, etc…. And then 10-20% of students are eligible for enough funding from the government and merit-based awards to cover their cost. So that’s about 40%…. so the middle 60% are the ones that never quite have enough money.”
This motivated her to start a program accessible to all, including that middle 60, and Higher Ed Points was born. The program allows parents, friends, and family to donate their unused loyalty points to a student attending post-secondary. Those points can cover some of the cost of Tuition, as well as pay down student loans.
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Covering the increasing cost of higher education
When Suzanne did her MBA, tuition for the program was $3,500. That same MBA program at Western University costs $88,000. Inflation is real and it's harder to finance your education.
Tuition cost for a general arts hasn’t increased as dramatically, but footing the bill has gotten more complicated. Sure, the price of financing secondary education has increased, but it’s the other costs that are really hitting students.
“Tuition, depending on your program, only makes up 30% of the cost of a year of schooling. You’ve got food, you’ve got rent and meal plans, and transportation. All that’s more expensive than it was on those days.” Throw in the cost of a laptop and wifi, and that bill gets even more extensive.
Suzanne’s top tip for students is to sit down and map out all their costs.
“I know I’ve got to have this much money to cover (food, rent, Tuition), but then it’s everything else. You’re going to be getting extra snacks, you’re going to be getting cleaning supplies, you’re going to be socializing, and a lot of students forget laundry.” Mapping out these costs and having a backup emergency plan for unexpected expenses will help relieve a lot of stress.
Contacting your school’s financial aid office is also a great idea. Most offices have an application that students can submit once a year.
Suzanne says: “that 20 minutes you spend filling out that application is going to have you automatically considered for other sources of funding.” It’s a must for all students.
Below are some of the different ways your can go about financing your secondary education at college or university.
Ways of financing education
- Personal savings
- Support from family
- Money from a TFSA
- Entrance awards
- Government financial aid & student loans
- Working while at school
- Student loans/students line of credit
- Gap year
- Co-op program
The problem with the current scholarship model for financing school
The current scholarship model is not perfect, but Suzanne says, “any money that helps a student pay for education is good money.” Yet, Suzanne wants to see more scholarships going to the middle 60% and large financial donors direct their money to student aid offices rather than creating one significant scholarship.
“I would love to see corporations and individual donors stop with the Canadian citizen [requirements], high marks, high athletic achievement awards, and put money really in the hands of people who know the students that need the help.”
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Should you take a gap year?
COVID-19 will significantly affect student’s lives at post-secondary, but it may actually help their wallets. The federal government is doubling the amount of grant funding they offer to students, and companies and organizations have remained committed to the scholarships they offer.
The pandemic is also causing more students to think about taking a gap year. Still, many have concerns about what they’re going to do during that time. Suzanne says resources like Can Gap will help answer that question and says: “do it if it works for you. Do it if you can do something meaningful and purposeful.”
Make sure to check out Higher Ed Points and Suzanne’s educational website WaysToPayForSchool.com.