January 29, 2004  
Volume 97, Issue 66  

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University brings great return rate

By Sarvenaz Kermanshahi
Gazette Staff

Economists at TD Canada Trust have good news for starving students who expect to continue starving after completing their studies. In fact, the experts claim the benefits of a university degree extend beyond debt and financial worry.

“The most obvious benefit of a post secondary education, and the one that most people pursue, is that they can expect to earn more,” said Eric Lascelles, an economist at the bank.

According to a recent study by TD Canada Trust, the rate of return on a university degree (after tax and inflation) is roughly 12 to 20 per cent. In addition, Lascelles stated a university educated person can expect to earn 61 per cent more than his or her high school-educated counterpart.

Certain fields of study, such as the sciences, were shown to have a higher rate of return than the social sciences or humanities. “[Science related] fields are directly applicable to a job and technical jobs, in general, offer higher earnings,” Lascelles stated. However, he said even students with below average earning jobs indicated a high level of satisfaction with their degree.

Lascelles also addressed the financial difficulties many students face: “The main challenge is that all the costs are up front and the benefits accrue down the road. This is why it is so important for Canada to have financial aid policies so that students can overcome the cost hurdles.”

“I don’t think anybody would deny that the benefits of post-secondary education outweigh the costs,” said Dave Ford, University Students’ Council VP-education. “The problem is that when you have tuition costs as high as $18,000, there is sticker shock,” he said.

The study was scoffed at by the Canadian Federation of Students. “[The study] is a shameless sales brochure for TD Bank,” said Joel Duff, CFS Ontario chairperson. “They are trying to fear monger people into buying TD products by assuming that fees aren’t a big deal and that they will continually be on the rise,” he stated.

“[Registered Education Savings Plans] will never be a solution to the access problem because not everyone can afford to save,” Duff said, stating decreasing the up front cost is key to ensuring that students have access to education regardless of their financial background.



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