Weighing the payoffs of post-pandemic return to school

What you loved and cared about in your work pre-pandemic or throughout might be a lot different now, because your priorities may have shifted. So, too, have the needs of many businesses.

Whether you’re thinking about going back to school to find a new, stronger purpose for your life and work, or your skills just aren’t cutting it in the highly digital economy that’s taken a stronger foothold in the wake of COVID-19, going back to school can be a terrific long-term investment.

Here’s how to tell if going back to school could be a good option for you, and how to pay for it.

Indicators you’re ready to hit the books

Have you wanted to do something different for a while now and are crystal clear about what that new profession is? Is your current work changing, but your skills don’t match what’s needed for the future? Are you wanting to change industries, but need to upgrade your certifications to break in? Do you want to earn a lot more money, but have hit a salary ceiling due to your current level of education? Are you out of work and can’t find new work because your skills and training don’t match up to your peers? In all of these cases, going back to school may make sense.

If you’re not clear about the benefits of returning to school as an adult, but are just curious about upgrading your education, consider chatting with a career coach before applying for any programs. Returning to school is too important a financial, personal and professional decision not to be 100 per cent sure it’s the right move for your life.

Consider using the Lifelong Learning Plan

The Lifelong Learning Plan (LLP) allows you to withdraw up to $20,000 from your RRSPs to finance training or education for you, your spouse, or your common-law partner. Your annual withdrawal limit is $10,000. You’ll have 10 years to repay the funds back into your RRSP and once they’re replenished, you can participate in the plan again, as it is unlimited lifetime participation.

The best part of this strategy is that you won’t get slapped with a tax penalty for the withdrawal, whereas if you withdraw money from your RRSP before retirement to pay for a car or clear off debt, the withdrawal is considered income in the year you received the funds. You’ll end up paying hefty taxes.

Scholarships

There are millions of scholarship dollars available for mature students who take the time to apply for these funds. In fact, more than $10 million of all scholarship money in Canada goes unclaimed every year according to a 2020 Yconic statement, because students of all ages don’t bother applying. Having been the recipient of scholarships that covered more than 30 per cent of my educational costs between post-secondary and graduate school, I definitely think spending time scanning for awards applicable to your area of study and geography is totally worth the effort.

A great place to start are scholarship aggregator databases like Scholarships Canada, Yconic and Scholarship Partners Canada. You can also check in with your employer to see if they have scholarships or reimbursement programs for your tuition expenses. And Google searching for smaller local scholarships will reveal further awards you can apply for.

I know from firsthand experience the application process can be much easier than it’s perceived to be. But, it does take time. So, start early with applying.

Student lines of credit

Canada’s major financial institutions offer student lines of credit with preferential interest rates. This option is debt that you must pay interest on, but it offers the flexibility of taking out the money you need at exactly the right time. Typically, you’ll then have to start repaying the principal balance within six months of graduation.

Student loans

Always, traditional federal and provincial student loans are available for you to apply for. There are grants and repayment assistance options for students, too, which can ease the financial burden of paying for school.

Pay as you go

If you plan to continue working, even part-time, while returning to school, you might be able to save up to pay for tuition and books as those fees come due. To ensure you have enough, use a budget to determine what you can afford to set aside each month into your savings account, which is made much easier with automatic transfers. Even if this won’t be quite enough money to pay for everything, it certainly does offset the costs, and prevents unnecessary debts.

Pay with savings or ask family

If you’ve got the cash already set aside, bravo. Ensure you’re earning some interest on your savings account while the money is sitting there. Or, you may consider asking your family to support you through a no-strings attached gift, or a loan.

In almost all cases, returning to school as an adult has a strong payoff; better income potential, increased pride and happiness in your work. But, it’s a big investment of your time and money. So, make sure you’re totally ready to go all-in on this next phase of your life.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.