Do Students Need Credit Cards?

The following is from the Financial Post:

Thirty years ago, it was unthinkable that a bank would give a credit card to an 18-year-old with no income. Graduating students were sometimes able to get credit cards but they usually had $500 spending limits – not $5,000. Today, students can fill out application forms that are practically pre-approved.  Moreover, many credit card companies market their products to freshmen during university orientation weeks by offering them gifts – such as sweatshirts – if they apply for cards.

Middle- and upper-class students living at home and working part time are especially prone to developing what the industry calls “premature affluence”.  Since they usually don’t have to pay for their living expenses, most of their income is used for discretionary purposes. This often leads to developing a taste for luxuries such as expensive coffee and clothing.

But when these young people move out to attend school, they suddenly find that their income barely covers their basic expenses – let alone luxuries.

They don’t want to start living like a pauper, but their income barely covers the necessities of life. But they have credit cards and they can put luxuries on the credit cards and then make the minimum payments. They are able to go out and they are able to enjoy things.

The minimum payment system as “a big trap” that encourages consumers to hold on to debt to create profit for credit card companies.

 Read the full Financial Post Article here

In my son’s case he didn’t even make it on campus. We went to our local bank to change his youth account to a regular account and left with a credit card that “came with the account.”

Parents you know your child’s money personality and therefore, you, not a bank, should determine if your 18 year old is mature enough for a credit card.

How Important is the Reputation of a University?

The following is an article from Wilfrid Laurier University’s student newspaper lamenting the fact that the 2011 incoming average for arts majors has decreased to 73% and the worry that the university’s reputation will suffer. Comparable universities have an average in the low 80s.

Wilfrid Laurier Student Newspaper Article

My analysis of publicly available information from the Ontario University Application Centre show that Wilfrid Laurier’s applications increased this year by 2.5%. They had 3.1% more students choosing them as their first choice, a whopping 6.8% selected Laurier as a second choice and for a further 1.9% Laurier was a third or lower option.

So what’s the problem? Well according to the Ontario University Application Centre data, the confirmations or acceptances decreased by 2.5%. Therefore, the net effect was 5% less acceptances than the previous year. This fact likely led to members of the admissions team digging deeper into to the applicant pool to meet their enrolment targets.

The problem with this strategy is that Wilfrid Laurier’s reputation will suffer not only for this year and 2012 but in the distant future. Furthermore, although the averages were significantly higher for a few other degrees, all programs will probably be held to the same negative standard. It truly becomes a vicious cycle and it will take a Herculean effort to turn this trend around.

Although this article focused on one university, I’m sure there are others in similar situations. But so far, they are not airing their dirty laundry in public.

When you consider your university choices pay attention to the university’s reputation because it can affect your employability; especially when the negative reputation is as a result of lower admission standards. No one wants to go to “last chance university.”

But I do, however, want to stress that you want to go to the best university that will accept you. Your options will vary if you have a 95%, or an 80% or a 73% average. Choose wisely! But more importantly, get the highest possible marks in Grade 12.

What to Study at University?

I know that it can be daunting with over 1,000 undergraduate programs to choose from. Remember, however, if you are still undecided or confused, you really don’t have to make a decision right now. In your first year in university, you can always take courses you’re interested in and then you will be in a better position to make a degree/program/major decision in your second year. You’re not likely to lose any of the credits you take in the first year since most universities will allow you to take courses outside your major or specialization.  

Here are 4 databases to search for a university program. They all have the same information, but it's displayed differently.  Start clicking! Good luck!

Association of Canadian Universities

Canadian Universities Net

School Finder

Campus Starter

What Grades do you Need for University?

To be competitive, you should aim to get at least an 80% average in Grade 12. But there are some programs and universities where you’ll need a higher average. Likewise, you can get into some universities and programs with as low as a 60% average.

But be careful, the pool of the current year’s applicants determines the admission cut-off, so aim to be comfortably above the average.

There is a correlation between the reputation of the university and the minimum Grade 12 averages. The higher the reputation, the higher the average.

Here’s a comprehensive list of average entering grades for Canadian Universities. It’s important to note that this is the average, not the minimum. Furthermore, some competitive programs will have higher averages than the university’s average.

Province	University	Average Entering Grade
Alberta	University of Alberta	85.7%
Alberta	Alberta College of Art & Design	60%
Alberta	Athbasca University	NA
Alberta	Brandon University	79.1%
Alberta	University of Calgary	82.2%
Alberta	University of Lethbridge	80.2%
Alberta	Mount Royal University	80.8%
British Columbia	University of Brtish Columbia	87.6%
British Columbia	Emily Carr University of Art & Design	75%
British Columbia	University of the Fraser Valley	79%
British Columbia	Kwantlen Polytechnic University	60%
British Columbia	University of Northern British Columbia	85.2%
British Columbia	Royal Roads University	NA
British Columbia	Simon Fraser University	85%
British Columbia	Thompson Rivers University	78.8%
British Columbia	Vancouver Island University	78.1%
British Columbia	University of Victoria	83.6%
Manitoba	University of Manitoba	86.6%
Manitoba	University of Winnipeg	80%
New Brunswich	Universite de Moncton	65%
New Brunswich	Mount Allison University	85.9%
New Brunswich	University of New Brunswick	83.6%
New Brunswich	St. Thomas University	83.8%
Newfoundland	Memorial University of Newfoundland	79.9%
Nova Scotia	Acadia University	84.9%
Nova Scotia	Cape Breton University	84.5%
Nova Scotia	Dalhousie University	86.4%
Nova Scotia	University of King's College	70%
Nova Scotia	Mount Saint Vincent University	84.2%
Nova Scotia	Nova Scotia Agricultural College	80.1%
Nova Scotia	NSCAD	70%
Nova Scotia	Universite Sainte-Anne	73.7%
Nova Scotia	St. Francis Xavier University	83.5%
Nova Scotia	Saint Mary's University	79.4%
Ontario	Algoma University	78.4%
Ontario	Brock University	80%
Ontario	Carleton University	80.5%
Ontario	University of Guelph	80.9%
Ontario	Lakehead University	78.2%
Ontario	Laurentian University	78.8%
Ontario	McMaster University	84.9%
Ontario	Nipissing University	80.7%
Ontario	OCAD University	80.4%
Ontario	University of Ontario Institute of Technology	77.2%
Ontario	University of Ottawa	81.6%
Ontario	Queen's University	87.3%
Ontario	Royal Military College of Canada	83.5%
Ontario	Ryerson University	80.8%
Ontario	University of Toronto	84%
Ontario	Trent University	78.1%
Ontario	University of Waterloo	86.8%
Ontario	University of Western Ontario	86.4%
Ontario	Wilfrid Laurier University	81.6%
Ontario	University of Windsor	79.1%
Ontario	York University	81%
Prince Edward Island	University of Prince Edward Island	84.5%
Quebec	Bishop's University	84.2%
Quebec	Concordia University	65%
Quebec	Universite Laval	NA
Quebec	McGill University	89.5%
Quebec	Universite de Montreal	87.9%
Quebec	Universite du Quebec	NA
Quebec	Universite de Sherbrooke	86.9%
Saskatchewan	University of Regina	85%
Saskatchewan	University of Saskatchewan	87.9%

Will Your University Degree Pay Off?

According to a Globe and Mail article, 18.5% of university graduates earn less than half of the country’s median income of $37,002 – the highest proportion of any OECD country, and a phenomenon experts struggle to explain.

Meanwhile, data from the federal Department of Finance show that while fields such as business, engineering and mathematics have returned 12 to 17% a year on education’s rising up-front costs, rates for disciplines in the humanities and social sciences could be as low as 4 to 6%.

Torben Drewes, a professor of economics at Trent University, believes returns on university degrees will continue to rise overall, but acknowledges students cannot bank on earning an “average” wage.

Read the full story here

Given the alternative of just high school, I would still recommend that you embark on post-secondary education. I know my 18 year old would be relaxing on my couch playing video games with intermittent texting if he were not at university right now.

It's not a guarantee, but it's still worth doing a university degree.

Getting the Most from a University Fair

We are about to begin the education fair season where a number of universities will be coming to a location near you.  Look to the list on your right for the dates of over 80 education fairs.

Attending a university fair is #4 on my list of top 12 things to do in Grade 12.

It’s a great opportunity to communicate with and get information from a number of universities in one location. This will also help you to narrow your choices. I caution you, however, don’t make decisions based on the personality (or lack thereof) of the representative you speak to.

Here’s how to get the best out of these fairs:

1.      Know which universities will participate

2.      Do your preliminary research of each university from their website (see list of websites on your left)

3.      Make a list of each university and your questions (that wasn’t on the website or you need further clarification). Yes, you’ll bring a small note pad and pen with you.

4.      Get a new email address that both student and parent will have access to. This allows all to receive and read emails from the universities you’re interested in.

5.      Dress comfortably, you may be there longer than you anticipate

6.      For the larger fairs, once you enter review the floor plan and start your trek around the room

7.      If current students or alumni are available, do make a point to ask about their experience. But the reality is – their experience was positive that’s why they are there. So try to ask more specific questions, for example, “what other universities they applied to and why they chose this one?” or “if they could change one thing what would that be?” or “what’s their personal highlight?” Also, ask if there is anyone specifically from the program you wish to apply to.

8.      Make a note of the answers to your questions (you’ll forget or get confused later on at home).

9.      Get the business card of any university representative you meet. Send them a quick note to thank them for their help a day or two later. This contact can be invaluable in the coming months.

10.  Use your new email address to sign up to get further information from your short list of universities.

Good luck!

Different Return on Investment for Different University Programs

You have seen several reports that conclude a return on your investment in higher education. Now new research has showed the impact of higher education on wages in certain jobs. First, it confirms that individuals with post-high school education almost always earn more than those with just high school. Secondly, “education remains an important factor in determining annual income or hourly wage, but the detail offered by these insights shows some of the potentially complicating factors,” the study says, adding that the results support the general expectation that more education and experience equals higher income.”
Read more in the Globe & Mail


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Have You Started to Save for University?

A recent survey by TD Canada Trust found that a staggering 45% of parents who have children eligible to start post-secondary education this fall have not started to save. A third of the parent surveyed say they'll only be able to cover less than 10 per cent of the cost. Another TD survey suggests that 58% of post-secondary students feel anxious or stressed when they think about how they're going to finance their education.

Remember that tuition has increased 8% in 2 years and according to a 2010 Statistics Canada report, the average student owes over $18,800. TD states the total cost of school for students living away from home at $80,000.

"If tuition fees and other compulsory fees are adjusted for inflation, Ontario students have witnessed a 244 per cent real tuition fee increase between 1990 and 2011," said the report entitled Under Pressure: The impact of rising tuition fees on Ontario families.

Full Newspaper Story Here

Should you Pick a Small University?

Here’s another report of how students are suffering from poor undergraduate education. Again, we read that the quality of undergraduate education is suffering because of a focus on research. Vice-president Academic of the University of Prince Edward Island, Jim Randall said that doesn't mean undergraduate education is deteriorating. He believes the report is mainly concerned with larger universities.

So is a smaller university a better option? Or more specifically one that is less research oriented and more focused on undergraduate education. One of the advantages of Maclean’s ranking is that there is a separate category for primarily undergraduate universities so you can easily narrow your choices down given this study.

Maybe good things really do come in small packages!

Read the CBC article here.

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Undergraduate Programs the New High Schools?

In Canada, as in the U.S., undergraduate programs have become the new high schools. Elementary and high schools simply have to do more to lay essential educational groundwork.

Once respected classical disciplines such as English, philosophy and history have become so specialized, they often serve no other purpose than to perpetuate the niche specializations of individual professors.

Read more: http://www.thestarphoenix.com/Lament+demise+humanities/5433691/story.html#ixzz1Ycyo48wQ

Unfortunately, I don't see any solution to this issue. As stated more and more faculty members are getting their PhDs in very narrow subject areas and will never be in a position to teach a broad undergraduate course.

Furthermore, will these poorly uneducated students ever learn the basics and thus be able to teach it if they continue in academia? Probably not, unless there is truly a committment to change undergraduate education.

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Women Reaping Higher Return on Investment in University Degree

Canadians with a university degree earn, on average, about 40% more than workers with only high school diplomas. However, this wage premium varies greatly depending on sex and age. Young men with degrees realize much smaller earnings advantages over other young men with lower levels of qualifications than highly education young women do over their less-educated peers.

Are the men aware of this variance? Could this explain why there are more women doing undergraduate degrees?

At University of Toronto, Canada's largest university, the male to female ratio is 44 to 56. Similiar ratios can be found at most Canadian universities. The notable exceptions are: Carleton University and Saint Mary's University both with a 50 to 50 ratio. The Royal Military College has a 78 to 22 male to female ratio (perhaps as expected) and the University of Ontario Institute of Technology reported a 59 to 41 ratio. Another outlier is Mount St. Vincent in Nova Scotia with a 22 to 78 ratio.

In a few years will universities attempt to admit a more gender-balanced incoming class? Only time will tell!

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Financing your University Education

Last week the university tuition fee report was released by Statistics Canada and as expected tuition fees have increased. There was an overall increase of 4.3% in tuition in 2011 following a similar increase in 2010. By comparison, inflation was only 2.7% between July 2010 and July 2011. Will tuition continue to increase at a similar rate? If you or your child will start university in 2012, here’s what you might expect to pay for a four year degree:

·       2012      $5581

·       2013      $5804

·       2014      $6036

·       2015      $6277

Note, however, there are provincial differences. Ontario and New Brunswick have the highest tuition; while Quebec and Newfoundland & Labrador have the lowest. Also, Quebec and Nova Scotia charge higher tuition for out of province students. A third consideration is that some programs, like Bachelor of Commerce and Bachelor of Business Administration degrees have higher tuition than other undergraduate degrees at the same university.

Remember that tuition is only one part of university expenses. You need to include:

·       Textbooks (approximately $1500-2000 per year)

·       Transportation (daily transportation/parking cost if living off campus and/or trips home if off campus)

·       Residence (roughly $5000).Dormitory fees are not correlated to the real estate market the university is located in. Living off campus is sometimes a cheaper option, but I don’t recommend it in first year.

·       Meals (don’t assume that your child who is living at home won’t need money for meals on campus). Meal plans are not what you expect. It’s essentially money that’s deposited upfront that the student can then use at all the various eateries on campus (who sell food at regular prices) and in some cases at local restaurants. It would be helpful if you can and are willing to cook. Note today’s other post about the increase number of Food Banks on college and universities campuses.

·       Entertainment expenses ($1000) but depends on some your entertainment preferences. There are lots of free and cheap fun options on campus.

·       Miscellaneous expenses. My son paid $300 for intramural hockey and $70 for his residence social fee.

I would recommend that you estimate at least $9,500 per year for a student living at home and approximately $17,000 each year for one living on campus or away from home.

So how does one finance a post-secondary education? The most obvious options are:

·       Personal resources from your years of savings. Don’t worry if you haven’t started yet, it’s never too late and every bit helps. Monetary birthday and Christmas gifts from family would be helpful; gently get the word out.

·       Provincial and Canada student loans (see websites to your right). You may be able to get an estimate of the value of the loan you qualify for, if any.

·       Student Line of credit with a bank (see websites on your right). Shop around and read the fine print.

·       Scholarships – Many are offered without an application and are sometimes offered simply as a result of achieving a minimum high school average.  There are also a number which you must submit an application. Do take the time to research the various types of scholarships available, often the number of applications is lower than you expect so apply even if you think that you don’t have a chance. Pay attention to the wording of the scholarship. Some are only offered in first year, while others are renewal automatically or with some conditions. This becomes important when comparing offers from different universities. Your best friend should be the university financial aid officer.

·       Bursaries are usually offered based on financial needs not on academic merit. Generally, you will have to demonstrate financial need by applying for a provincial student loan. Sometimes the application forms are a bit daunting but it’s worth it if you need additional funds. Many students who qualify don’t apply, so often there’s more money than demand.  Again, your best friend is your university’s financial aid officer.

·       Work Study Programs. These programs offer jobs on campus for a certain number of hours to students who have unmet financial needs.  Again, financial need is usually based on your provincial loan application. Many of these jobs are not filled do should consider applying.

·       Be creative; think outside the box of other ways to finance your education. My son had a garage sale and sold items on craigslist and Kijiji.

In summary, a university education is a sound investment in your future. While you need to focus on the cost, you’ll likely need multiple sources of funding to cover the cost. Financial help is available you just need to find and apply for it!

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Location, Location, Location

Some university students living in residence are about to spent their third weekend on campus and some parents are approaching weekend number 3 without their son or daughter at home.

My son is at a university four hours from home and during the research process I wish I knew then what I know now.

Here’s what I know now:

·        Distance is important
During the university research, I felt that away from home is away from home. Distance was less important. I now feel differently. An 8 hour return trip requires more premeditation than a 2 hour drive. My skewed sample of friends show that it’s a lot easy for parents to make to quick, spontaneous trip to campus when the missing-you pain is too great.

·        Nothing replaces in person communication
I believed there were so many fast, free, cheap, efficient ways to communicate (i.e., cell phone, text messaging, BBM, Skype, email, facebook, twitter, etc.) that as a parent there may even be more communication than having a teenager at home. My experience may not be typical, but if you have a student who made a great transition to university finding time to communicate with the parents is not a priority. So much for the BlackBerry upgrade!

·        Nothing can prepare you for this
I could not have been more prepared and I knew I was going to miss him terribly, but it’s much, much harder that words can describe. The drive home after we helped him move in residence was filled with buckets of silent tears.

On the positive side we will see him next weekend! Countdown officially begins today!

Is University in your Future?

Most parents I know really do want their children to go to university and if you’re looking for evidence to support your dream for your child here’s a summary of recently published data:

·       TD economists Craig Alexander and Shahrzad Mobasher Fard College report that 10% is the average rate of return on an undergraduate degree. The range is from 11 – 14%. Furthermore, investment in education remains the single best investment that a person can make.

·       Statistics Canada and the 2006 Census report that university graduates are more employable and spend less time unemployed when they lose their jobs.

·       Organization for Economic Co-Operation and Development (OECD) found more than 80 per cent of university and college graduates between the ages of 25 and 64 are employed, compared to a little more than 50 per cent of high school graduates.

·       The Council of Ontario Universities state that two out of three new jobs require postsecondary education and from 2004 to 2010, employment growth for university graduates outpaced all other levels of education.

·       The Council of Ontario Universities also reported that 93% of Ontario university students find jobs within six months of graduation, but 85% of those employed full-time two years after graduation say their job is related to their education.

·       Ontario university graduates also earn more than twice as much annually (53%) as high school graduates, an average of $1.6 million more over the course of their careers according to the Council of Ontario Universities.

As a high school student reading this I hope you don’t need additional unbiased opinions on the value of a university education.

The underlying assumption of all of these reports is that the students are covering all of their university education (now or repaying loans later). However, as a parent who just paid her son’s first year tuition I’m still waiting for the data which shows the parents’ return on their investment! But I guess my reward is that I’m doing my best to ensure that he will be a contributing member of society.