University Fees: A Known Cost on a Known Date

A child is born, and a date arrives with them. Eighteen years later, give or take, there is a first tuition instalment, a residence deposit, and a list of costs that nobody itemised in advance.

Almost nothing else a household pays for announces itself that far ahead. A roof fails without notice. A job ends without notice. A vehicle is replaced at some point nobody can name. Tuition is the rare cost whose size and whose month are both visible from a great distance.

This page describes what that changes, what each of the available containers actually does, and which question belongs to somebody else. It recommends nothing to any household and makes no judgement about anybody's circumstances.

Canadian Wealth Creation Centre Inc. is a life insurance practice, and what follows is education about mechanisms rather than advice. A parent reading it is assumed to be perfectly capable of drawing their own conclusion once the mechanisms are on the table.

The one large cost whose amount and date are both known

The date is the easier half. It can be written down on the day a child starts school, it does not move by more than a year in either direction, and no household has ever been surprised by the arrival of a child's eighteenth birthday.

The amount is knowable within a range. Institutions publish what they charge, provinces differ, programmes differ, and the direction those figures have moved over the last two decades is a matter of public record rather than of opinion.

The larger number is frequently not the tuition. Housing, food, transport and the equipment a programme requires often exceed the fees themselves, particularly where a student has to live away from home, and a household that has budgeted only for tuition has budgeted for part of the problem.

None of that requires a forecast. It requires reading what is published now and accepting that it will be higher later, which is a different intellectual activity from predicting a market.

What a known date changes

A known date makes time the cheapest input available. Anything that compounds, in either direction, has more years to work with the earlier it starts, and starting is the only part of that a household controls completely.

It also makes the alternative visible. A cost met with credit on the day it arrives is a cost paid twice: once for the thing itself and again for the years of interest afterwards, which is the ordinary shape of opportunity cost in a household, and it is visible in advance only because the date was.

It allows a household to choose the instrument rather than accept one. A family with fifteen years of notice has more options open than one with fifteen months, and the narrowing happens quietly rather than announcing itself.

And it makes doing nothing a decision. Not a criticism, and not an argument for any particular product. Simply a description of what a long warning is: an option that expires slowly whether or not anybody looks at it.

The two rates in the same household

A household frequently holds savings and debt at the same time. Money set aside for a child's education sits in one account while a line of credit or a card balance runs in another, and the two are examined separately because they arrive on separate statements.

The rates on those two arrangements are usually very different. A reachable savings arrangement pays modestly, often less than the rate at which prices rise, while consumer credit and a home equity line are priced considerably above that.

Nobody set out to arrange it that way. The savings were begun for a good reason, the borrowing happened for a different reason in a different year, and no single moment presented the two as one decision.

Setting them side by side is uncomfortable and it is the honest exercise. Twelve months of statements, the interest column totalled on one side and the credited amount on the other, both belonging to the same household in the same year.

What follows from that comparison is not this page's to say. It depends on liquidity, on what the borrowing is secured against and on what else is happening in the household, and the family's accountant is the person who can see all three.

The registered education savings plan, described

It is a container with rules attached, not an investment. What is held inside it is a separate decision from whether to open one, and the two are constantly discussed as though they were the same question.

Contributions attract a federal grant. That is the feature no ordinary savings arrangement offers, and it is the reason the plan appears in every serious discussion of education funding in Canada, including this one.

Growth inside the plan is not taxed while it remains there. The plan accumulates without an annual tax event, which is a mechanical property of the registration rather than a claim about performance.

Withdrawals for a student are taxed in the student's hands. The grant and the growth are attributed to the student rather than to the parent, and a student's income is usually low, which is generally the point of the design.

The grant is tied to contributions and to a child's age. Room accrues over time and a late start cannot recover all of what an early one would have had, which is a structural feature rather than a penalty.

And there are specific rules where a child does not pursue eligible education. Contributions generally return to the subscriber, grant money returns to the government, and the accumulated growth is handled under its own conditions. Those rules are worth reading in the current government material before a plan is opened.

What the plan does not do

It does not protect against a parent's death. A plan holds what has been put into it. It does not continue funding itself if the income that was funding it stops, and that is a different problem answered by a different instrument.

It does not make the money reachable for any purpose. The plan is built for educational costs, the conditions on getting money out reflect that, and a household treating it as general savings has misunderstood what the registration was created to do.

It does not decide what is held inside it. That is an investment question, this practice is not licensed to answer investment questions, and a licensed investment adviser is the person who is.

And it does not cover the whole cost for most families. Which is why the question of where the remainder comes from is usually the real question, and it is rarely the one being discussed.

The other containers a family may already hold

A tax free savings account shelters growth on money already taxed. It is flexible, it is not tied to education, and using it for a child's fees is a decision about purpose rather than about registration.

A registered retirement savings plan defers tax on the way in. It is built for a different date entirely, and drawing on it early has consequences that belong to an accountant rather than to a website.

A non-registered account has no rules and no shelter. It is the plainest container available and it is taxed as it goes, which is a genuine cost and also a kind of simplicity, since nothing about it can be got wrong by accident and nothing in it is locked to a purpose.

Each of these does a different thing, and none of them is ranked here against the others. Describing the containers is useful. Ordering them without seeing a household's return, its debts and its horizon would be recitation dressed as advice.

The ordering question, and why this page will not answer it

Which container to fill, and in what sequence, is not answered on this site. Not out of timidity, and not because the answer is unknowable. Because the answer depends on facts about a particular family that no page has access to.

This practice does not recommend maximising a registered account ahead of a policy. It does not recommend the reverse either. Both of those are ordering recommendations and both require the household's own figures.

The facts that would settle it are ordinary and specific. A household's marginal position, what it already owes and at what rate, how many children there are, how many years remain, what protection is in place, and what the parents intend to do about their own retirement.

The person holding those facts is the family's accountant. With the actual numbers, the actual notices of assessment and no commission attached to the outcome, which is a materially better position than any page or any meeting with somebody paid on a transaction.

What the figures are, and why none of them is printed here

No amount, limit, rate or grant figure appears on this page. That is deliberate rather than an oversight, and the reasoning is worth setting out plainly rather than leaving as a gap the reader has to notice and interpret for themselves.

Education savings carries grants, limits and age conditions that are amended. Governments change them, and a number typed onto a website expires in silence while nothing on the page says so.

A stale number on a page a family relies on is worse than no number at all. It has the appearance of knowledge, it is read years after it was written, and the family has no way of telling the difference.

So the mechanism is here and the figures are not. The current ones come from the Canada Revenue Agency, from the government material on education savings, or from the family's own accountant, all of which are maintained and none of which is this page.

Infinite Financial Sovereignty®, and whose idea it was

The underlying idea belongs to somebody else and is set out in his own writing. The method Nelson Nash named The Infinite Banking Concept® is a mark of Infinite Banking Concepts, LLC, and neither Canadian Wealth Creation Centre Inc. nor Jose Salloum is affiliated with that organisation or endorsed by it.

Infinite Financial Sovereignty® is this practice's own registered mark, naming a narrower discipline carried out over a lifetime: that a household with repeating capital needs might hold the capital itself rather than remain a permanent customer for somebody else's.

In practice it means capital held inside a participating whole life contract issued by a federally regulated insurer. The contract accumulates a contractual value, and when capital is needed an advance is taken against it on the terms the contract sets.

It is a modest claim and it should be read as one. Nothing about it is free or fast, the insurer charges interest on an advance, and the description above is a mechanism rather than a proposal about anybody's children.

What a participating contract does, and what it does not

It pays an amount on a death, and that is its first function. A parent who dies while children are young leaves an education cost with no income behind it, which is the plainest connection between this subject and this product.

Most household protection needs are temporary. They last until a mortgage is discharged and children are independent, which is exactly what term insurance is built for, at a fraction of the cost per dollar of protection.

A contractual value accumulates, slowly and least at the start. The costs fall heaviest in the early years, so what is available early is materially less than what has been paid in, and the mechanics of that sit under cash value.

An advance may be taken against that value on the terms the contract sets. The insurer charges interest on it, an advance is a disposition for tax purposes, and amounts above the adjusted cost basis can become taxable in particular circumstances.

And it is not an investment. An honest comparison on rate of return goes against it, it is not a way of paying less tax this year, and a contract surrendered early returns less than was paid into it, permanently.

What stands behind the contract

The obligations of the issuing insurer, and nothing else. They depend on that insurer's continued financial strength and they are not backed by any government, which is a materially different position from a deposit at a chartered bank.

Assuris protects Canadian policyholders within its published limits where a life insurer fails. That is meaningful protection, it is not deposit insurance, and the difference is worth understanding before a long commitment rather than after one.

Dividends are not guaranteed. They are declared annually at the discretion of the insurer's board according to the experience of the participating account, and past dividend performance does not indicate future results.

Who this does not suit

A household whose protection is incomplete. Where the income the family depends on is uninsured, or the disability definition in the workplace booklet has never been read, the larger risk is uncovered while a smaller one is optimised.

A household carrying expensive debt. Clearing a high rate balance is a certain result and certainty is worth a great deal against anything projected. Saying so costs this practice business, and it is said anyway.

A household whose child begins university within a few years. The early years of a contract are the expensive ones, there is no time for that to change, and an early exit is a permanent loss rather than a delay.

A household whose premium would depend on a good year. A commitment measured in decades has to survive the ordinary years, and one that only works in the strong ones will eventually fail.

And a household that has not read the current government material on education savings. That material is free, it is written plainly, and reading it before any meeting changes the quality of every meeting that follows.

Things worth doing that cost nothing

Find out what the destination actually costs today. Fees, housing, food and equipment, taken from what the institutions themselves publish rather than from recollection, and with the living costs treated as seriously as the tuition, because they are frequently the larger of the two.

Read the current government material on education savings. It is more accurate than any summary of it, including this one, and it is where the amounts and the age rules actually live.

Add up what the household pays in interest across everything. Twelve months of statements, the interest column alone, mortgage and vehicles and cards and any line of credit. The documents are already in the house.

Put the ordering question to the family's accountant with the real figures. Not to a website, not to a forum, and not to a page written by somebody paid a commission when a contract is issued.

All four cost nothing and earn nobody anything, which is worth knowing about the order in which suggestions are usually made.

Who you are dealing with

IBC Financial is the education platform and trade name of Canadian Wealth Creation Centre Inc. Every client relationship, every piece of advice and every insurance product comes through Canadian Wealth Creation Centre Inc. and its duly certified representatives.

Everything here is written by somebody paid a commission by an insurer when a contract is issued, stated at the foot of every page on this site, and a reason to check the arithmetic rather than to accept it.

The order household decisions usually run in is set out in family finance, and the mechanism of the contract itself is described in how a participating policy works. Where the money for those fees arrives instead as a single sum from an estate or a sale, that situation is described under an inheritance or a business sale.