How Can I Pay Off My Student Loans Faster?

Recent statistics on the state of Canadian student debt are not painting a petty picture.

College graduates are left with more than $20,000 in the red, according to Statistics Canada, and it’s impacting the country’s financial stability overall.

In 2017, the government found that 70 percent of jobs now require employees to have a degree, another reason why obtaining a post-secondary education is so important.

Many millennial have to take unpaid internships or accept low-paying starting positions after graduation, pushing their college debt further down the ladder of priorities.

The reality of student debt should have parents wanting to plan for their children’s education even before they are out of diapers.

Here are some simple steps to follow in order to stay ahead of the game

Start saving now

It is never too early to set money aside for your child’s education, but the sooner the better.  Though the benefits of saving early are significant, there’s still value in starting now, even if your child is in high school.

Set a goal

In other words, find out roughly how much you’re going to need.  Research the cost of different institutions and look into their various programs and matching tuition. Estimate the cost of inflation and assume tuition will increase each year.

Invest in Registered Education Savings Plans (RESPs)

One of the best ways to set a solid financial foundation for your child is by setting up a Registered Education Savings Plan or RESP through organizations like Children’s Education Funds Inc. (CEFI). Companies like CEFI are experienced in matching families with the right type of RESP that fits their investment needs.

Set aside money for the extras

It’s safe to assume your student will need to provide a rent check for housing, although living at home while attending school can save money. Even then, the student will have to factor in costs associated with commuting and parking, not to mention the money needed for books, school supplies and electronics such as a computer or laptop.

By being financially conscientious now, your child will be able to look beyond their monthly student loan payments and toward a future that is brighter than the debt that will inevitably follow the next generation of Canadians.