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Financing your Children’s Future

This is an important week for all those Ontario students in Grade 12 – the week of final exams and high school graduations.   For parents, it can be quite a surprise to realize your child is an almost fully formed adult who is going to be moving out in a few months.   This can be an even more difficult emotional change for separated parents who often have a closer and more interdependent relationship with their children.  Your mission as a separated parent is to support your child’s growing independence and focus on your pride in their successful transition to adulthood.   Don’t ruin this adventure for your kids by making them worry about leaving you behind.

One of the challenges parents face is how to fund a university education.  Separated parents (unlike married parents) have a legal obligation to contribute to costs such as tuition, residence, books.   In order to maximize your child’s success at school and minimize your out-of-pocket costs, take the time to plan how these costs will be covered now, so it’s not a crisis in the fall.

Do not forget to consider all sources of potential funding for school.  First, review the suggested budget that the university or college provides to give you an idea of the total cost of the program.

Second, ensure your child applies to OSAP.  OSAP grants are a great source of funding as they do not have to be paid back.  Loans may also be a good option, but high income parents  should not use loans to reduce their own contribution costs.

Third, consider scholarships and bursaries – perhaps your employer or the university has supplemental financial support. 

Fourth, review your RESP savings.   If you have a joint RESP account with your ex, these are considered the child’s property.   In order to draw from the RESP your child will need to obtain a Financial Statement from their school to submit to the school. There may be some room in the RESP grant matching program for one last contribution, which are available to age 18.

Fifth, consider how much is reasonable for your child to contribute, considering their income from part time or summer jobs or gifts from family members.   Adult children are required to make a reasonable contribution to their post-secondary expenses.

Having determined the estimated cost and all the sources of funding available BEFORE parents contribute, you will arrive at the estimated annual amount parents will need to contribute. Your Separation Agreement or Court Order may specify exactly how to deal with these post-secondary expenses.   Usually expenses are shared proportionate to income (meaning if you make $100,000 and your ex makes $50,000, you are paying 2/3 and they are paying 1/3).  

Start making these financial arrangements now so that funding is in place for the start of the school year in September when the first semester tuition and residence fees are due

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