Nova Scotia

Students' finances not always clear to parents: RBC poll

Parents with children in university may not be fully aware of their financial situation, according to a new survey commissioned by the Royal Bank of Canada.
It could cost $85,000 to send a youngster away to university for four years. ((iStock))

Parents with children in university may not be fully aware of their financial situation, according to a new survey commissioned by the Royal Bank of Canada. 

The survey, conducted by Ipsos Reid, polled 1,180 students from across Canada aged 17 to 24, as well as 971 parents.

Fifty-five percent of students who responded to the survey said they sometimes didn't disclose all of their spending to their parents. Meanwhile 33 per cent of the parents thought this was the case.

According the poll, 90 per cent of the parents reported to knowing approximately how much debt their child has. By contrast, 78 per cent of the students surveyed disagree with that claim. 

"I don't think it's surprising that there is some discrepancy between parents' perceptions of how students are managing their finances, such as, you know, how much debt their child has," said Melissa Jarman, the director of student banking for RBC. 

The poll found more discrepancies between parents' knowledge of their children's finances versus what their children reported. Including how much parents think they know about their child's financial situation and the financial reality the university-aged child is living. 

It's a discrepancy that can cause a lot of anxiety in university students, said Jarman, but something that can be helped by better communication between parents and their children as they enter university, and before each university year. 

"Putting together a budget is the ideal way to accomplish that so they see all the costs associated with school, both the hard costs and discretionary and know all the sources of income coming in," said Jarman.

"If they do that collaboratively then they're both going to be on the same page and have a realistic view of what is available and if the student needs to source ... more income for the coming year."

Tuition rates at issue says CFS

For the Canadian Federation of Students, the problem is more complex. 

"The real problem isn't miscommunication amongst families. The real problem is high tuition fees, high student fees and high levels of student debt," said Anna Dubinski of the federation's Nova Scotia chapter.

"We're paying more tuition fees than our parents ever did, we're taking on more student debt than our parents ever did, we're entering into a job market with some of the highest rates of youth unemployment that we've ever seen. So I think the report really highlights this shift that happens and identifies ... a need for change and a more accessible system."

That change, for Dubinski, "is reducing tuition fees and forgiving debt."

According to the poll, the estimated margin of error would have been plus or minus three percentage points, 19 times out of 20 if the results were not weighted, but the error may be a little bit different due to weighting to ensure the demographics of those polled were similar to those of the actual Canadian student population.