The cost of a four-year university degree in Canada will likely surpass $101,000 for a baby born this year, and that's for a student living at home, according to a TD Bank report released Thursday.
For a student living away, an average university degree will cost $137,013, nearly double the cost today, said Craig Alexander, the bank's deputy chief economist who wrote the report.
Despite the daunting figure, Alexander said a degree is still "one of the best investments you can make."
Annual average tuition fees alone could be as high as $16,000 by 2027 although that varies widely from province to province, said Alexander. Living expenses for a student residing away are projected to be $76,650 over four years, versus $37,063 for those staying at home. So there are considerable savings to be had by attending a home-town university.
At the same time, if a university is renowned in a certain field, there are career advantages to degrees in that field from that university, said Alexander.
Weighing all those considerations are what parents will have to do when they consider how much money to put aside for their baby's education, he said.
Actually, if numbers were the only thing taken into account, Alexander said he would offer this advice: Get a degree in engineering or biomechanics or something in business. Don't get a degree in philosophy.
Or consider this, he said. Don't even go to university. Get a college degree instead.
"On a purely arithmetic basis, the rate of return on a college education is better than the rate of return for a university education. And that's mostly because college degrees don't take so many years to complete."
But, he asked, are you going to get the kind of job you want. A philosophy degree may launch your dream career.
Ultimately, he concluded, whether today's baby goes to college or university, stays at home or lives in residence, the cost of a higher education is going to be frighteningly expensive and his best advice is for parents to start saving immediately.
Parents who want to foot the entire bill of a child living away from home must save more than $200 a month starting the month the baby is born.
"If that seems excessive, instead aim to save for the academic fees only," he said. Those could be covered by about $100 a month.
And if that still seems excessive, put aside $50 a month.
"The key is to start saving and to save early," said Alexander.