Post-secondary education is now the second-largest expense a person will make in their lifetime – second only to buying a home. According to Statistics Canada for 2019/2020 the average price tag for an undergraduate degree per year was $6,463 a year for domestic students and $29,714 for international students. This means over a four-year degree, total tuition costs would be $25,852 and $118,856 respectively. It’s no wonder the average debt of college graduates is over $26,000. The numbers are comparable to our American neighbours.
Post-Secondary Is Getting More Expensive
Post-secondary is getting more and more expensive every year, doubling since the 1980s. On average tuition increases by 3% per year. This doesn’t sound like much, but in a decade that means nearly a 30% increase and a 60% increase by the time it takes to raise a newborn. In Canada, one of the primary reasons tuition is going up is because provincial grants have fallen since the 1990s when provincial governments were funding three-quarters of the cost of pursuing a university degree. They now fund about half of a university’s funding while the cost of Canadian tuition has nearly tripled in inflation-adjusted terms.
Regardless of the reasons why tuition is going up every year, it’s still going up.
But is there a better way to attend university while saving money?
Yes. And it’s by implementing the 2+2 method.
The 2+2 Method
The 2+2 method is when you go to a smaller university or community college for your first two years and then transfer to the university you want to graduate from for the last two years. Benefits include lower tuition costs, the opportunity to improve your transcripts from high school, lower living costs, and the opportunity to figure out what you want to do, saving you time and money in the process.
1) Lower Tuition Costs
The overall cost of education of community college is a lot less than the big-name universities. For example, at Douglas College in Coquitlam, B.C., where I spent my first year, tuition for 2020/2021 starts at $3,234 per year compared to $5,506.80 for the University of British Columbia assuming a full course load and not including other fees.
$2,272.80 savings per year x 2 years = $4,545.60 savings
If you invest that $4,545.60 into the stock market it’ll be worth $79,325 in 30 years! Want to know what to invest in?
If you live in Canada you can check out these resources to compare tuition across the various college and universities:
If you live in the U.S this table can help visualize the costs. Note that these are averages and each school has different prices.
Source: College Board
2) Lower Living Costs
Tuition is not the only expense you will need to consider when going to university, especially if your dream university is located out of state or province, or if the commute is just too far. If you decide to live on campus or on your own you will have to pay for living expenses including food and room and board.
Attending a local community college will save you thousands in living costs by living at home. While I missed out on living on campus, I saved a lot of money and was able to graduate with no student debt, mostly because I lived at home.
For example, to live on campus at the University of Alberta where I graduated from, a residence and meal plan is $12,400 per year! This is for a single room with a private washroom for eight months with a 7-day meal plan. If you average it out that’s $1,550 per month for food and rent.
I lived with my family for my first year at Douglas College and spent my second year at Grant MacEwan Community College (now MacEwan University) in Edmonton, Alberta, again living with family so I managed to save another $12,400 per year living at home.
If you were to save that $24,800 ($12,400 per year) in the stock market it would be worth nearly $500,000 in 30 years.
Is this enough to retire on? See my post How Much Money Do You Need to Retire?
3) Gives You The Opportunity To Improve Your Transcript
If your high school grades were not high enough to qualify for scholarships, going to a community college will give you a second chance to get your grades up to qualify. So not only is the tuition cost less than a four-year university, you will have the ability to get scholarships too.
4) Allows You To Figure Out What You Want To Do
For many students they only realize what they don’t want to do after a couple of years in university, paying high tuition fees during the process. That’s a lot of money and time down the drain. At least with a community college, you can keep the costs down while you figure out what classes you like and what you ultimately want to do for your career. If you decide to switch your major it’s more affordable to do so.
I have a lot of friends that switched from sciences to business, or from economics to psychology, and going to a community college helped them with that decision.
The beautiful thing about this strategy is that your first two years will mostly consist of the same set of classes if you choose wisely and allows you to get your basic classes out of the way at a far lower cost.
Things to Be Mindful Of
If you’re planning to implement the 2+2 method and have a university in mind where you want to transfer to, you will want to:
- Check to see if your credits will transfer before you enroll. The last thing you want is to take a class only to not have the credits transfer over to the university. Transfer credit is evaluated for directly equivalent courses. If the course(s) you took are not directly equivalent then you may still get credits towards your electives.
- Check to see what the GPA requirement is to transfer. Each university has its GPA requirements. You will want to make sure you exceed this because meeting the minimum has its risks.
- Have a backup plan in case you don’t get accepted to your university of choice. While each university has its GPA minimums that does not mean that you will be automatically accepted. In this case have a backup university you would like to attend if you don’t get into your top choice.
- Lack of campus life. If you’re looking for the dorm room frat party lifestyle, going to a community college is not for you. I would describe it more like a larger high school in terms of the overall vibe.
- Less networking opportunities. They say it’s not what you know but who you know. Starting at a community college will give you a disadvantage in networking when you do transfer to a university. Everyone at university would have known each other for two years so it’s important to get heavily involved in student clubs and activities when you do transfer. The people you meet will hopefully help you in your future getting jobs and could be a future business partner. You have lost time to make up for!
Each university has its requirements so it’s important to know what they are before deciding to go down the community college route. For example, there may be a time limitation on when the course would be considered for transfer equivalency and a limit to how many credits you can transfer.
To help you with this I would advise booking an appointment with an academic advisor at the university you are thinking of applying to.
If saving money is your focus, then a community college will save you A LOT of money especially if you can live at home by utilizing the 2+2 method. However, I did find it hard to make connections at first when I did transfer to a university. Everyone already knew each other so I had to put in the effort to build my network in half the time. I forced myself to go to every social event, got involved in student clubs, and attended several conferences and competitions. While that was all fine and good a part of me also wished I could have experienced the dorm life. But the grass isn’t always greener. I graduated with zero student debt AND with the savings I was able to invest I am now on track to have nearly $600,000 saved for retirement in 30 years.
Legal Disclaimer: The views expressed by Mr. Dumont on Money Sensei are solely his and not intended as investment advice nor a guarantee of any financial return. Mr. Dumont is not an investment or tax professional, so the information contained on the blog is not a substitute for professional advice. The contents of this blog are accurate to the best of his knowledge at the time of posting, but rules and laws are ever-changing. Please do your research to confirm that you have the current information.