A practical, step-by-step guide to building an education fund that covers tuition, living costs, and everything in between.
Post-secondary education in Canada costs anywhere from $20,000 for a two-year college diploma to $100,000+ for four years of university including living expenses. Starting early and using the right accounts makes the goal achievable for most Canadian families. Here's exactly how to do it.
| Program Type | Annual Tuition | With Living Costs | 4-Year Total (approx.) |
|---|---|---|---|
| College diploma (2-year) | $3,000–$5,000 | $18,000–$25,000/yr | $36,000–$50,000 |
| University (living at home) | $6,000–$100 | $12,000–$18,000/yr | $48,000–$72,000 |
| University (living away) | $6,000–$100 | $25,000–$35,000/yr | $100,000–$140,000 |
| Professional program (law, med) | $15,000–$30,000 | $35,000–$50,000/yr | $140,000–$200,000+ |
Costs are 2025 estimates and will increase with inflation (historically ~3–4%/year for tuition). A child born today faces 18 years of tuition inflation before starting school.
The Registered Education Savings Plan is the foundation of every education savings strategy. Open one in the first few months after birth. You'll need:
You can open an RESP at any major bank, credit union, or discount brokerage. For the best investment flexibility and lowest fees, consider Questrade or Wealthsimple.
The Canada Education Savings Grant (CESG) pays 20% on the first $2,500 contributed each year — a free $500 annually, up to $7,200 lifetime per child. This is the best guaranteed return available in Canada. Set up automatic monthly contributions of $208/month to hit the $2,500 annual target seamlessly.
Inside a self-directed RESP, invest based on your child's age:
How much will you have if you start at birth and contribute $2,500/year?
| Years of Contributions | Total Contributed | CESG Received | Projected Value at 6% Return |
|---|---|---|---|
| 10 years (start at birth) | $25,000 | $5,000 | ~$46,000 |
| 14 years (start at birth) | $35,000 | $7,000 | ~$73,000 |
| 18 years (start at birth) | $45,000 | $7,200 | ~$110,000 |
6% assumed annual return. Actual returns will vary. Values are illustrative — GICs in later years produce lower returns but protect capital.
If $2,500/year isn't enough — particularly if you're targeting a professional degree or out-of-province university — supplement with a TFSA. A parent saving an additional $3,000–$5,000/year in a TFSA alongside the RESP can accumulate another $60,000–$100,000 over 18 years. The TFSA is tax-free and flexible — if your child chooses not to attend school, you keep the money with no penalty.
RESP funds can pay for any expense related to qualifying post-secondary education:
The student can withdraw up to $8,000 in Educational Assistance Payments (EAPs — the grant and growth portion) in the first 13 weeks of full-time enrollment. After 13 weeks, there's no annual EAP limit. The contributions can be withdrawn at any time with no limit.
When your child withdraws from the RESP:
If your child receives a scholarship that reduces their education costs, the RESP can still be used for other expenses. If they receive a full scholarship and don't need the RESP funds, you can withdraw your contributions tax-free and roll the growth into your RRSP (if you have contribution room) to avoid the 20% penalty tax.
Canadian families save $200-$360/year by switching to KOHO's no-fee account. That's money that could go into your child's RESP instead. Use code 45ET55JSYA for a bonus when you sign up.
Get KOHO Free — Use Code 45ET55JSYASaving for your child's education in Canada is straightforward when you use the right tools. Open an RESP at birth, contribute $2,500/year to capture the maximum CESG, invest in low-cost ETFs suited to your time horizon, and supplement with a TFSA for bigger goals. Starting early, staying consistent, and letting compound growth work for 18 years produces a fund that can cover most or all of a Canadian university education — without student debt.