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A packed class of 800 first year psychology students listen to a lecture at the University of Western Ontario in London, Ontario September 14, 2006. Photo by Yvonne Berg/Globe and Mail

Yvonne Bert/Yvonne Bert/THE GLOBE AND MAIL

Many Canadian families are struggling to find a balance between paying down debt, squirrelling away money for retirement and saving for their child's education.

So a recent report that projected that by 2027 the cost of a university degree will top $100,000 likely sparked some serious sticker shock among new parents.

In 18 years, when a baby born today goes to university to start an undergraduate degree, the total cost of a four-year program for a student living away from home will be $137,013, according to a Toronto-Dominion Bank Financial Group report. The bill for students still bunking with their parents will be a slightly-less-shocking $101,426.

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"For most parents, saving for a child's post-secondary education is going to interrupt saving for retirement," said TD deputy chief economist Craig Alexander, who crunched the numbers behind the forecast.

Read more about how to save for your child's higher education on Monday's personal finance Globe Investor website.

Sara Kinnear, a senior tax and estate planning specialist with Investors Group in Winnipeg, provided these tips:

1 Contribute to a Registered Education Savings Plan and take advantage of the Canada Education Savings Grant. If your child is a Canadian resident 17 or younger in the year, then the first $2,500 of RESP contributions will be eligible for $500 of CESG. The CESG is paid into your child's RESP and grows with your contributions on a tax-deferred basis until your child begins post-secondary education. Don't have the immediate cash to make an RESP contribution? Use the income-tax refund you received when you made your RRSP contribution.

2 Contribute additional savings to your Tax Free Savings Account. Your investments will grow tax-free and withdrawals are also tax-free, making TFSAs a flexible savings plan. If your child is 18 or older, they can contribute to their own TFSA.

3 Take advantage of the Canada Learning Bond. If your child was born in 2004 or later, and you are receiving the National Child Benefit Supplement to the Canada Child Tax Benefit, then your child is eligible for the Canada Learning Bond, which can be paid directly to an RESP for your child. (Most families earning $37,885 or less meet the income test for the CLB.) The CLB is worth $500 in the first year of eligibility, and $100 per year for up to 15 years, for a total of $2,000. You do not need to contribute anything to an RESP to receive the CLB, just open an RESP and apply for the CLB.

4 Encourage your child to contribute to his or her own education. If your child has an after-school or summer job, some of those earnings can be earmarked for future education costs. Ensure your child files an annual tax return with respect to that employment income, so the Canada Revenue Agency can keep track of your child's RRSP contribution room.

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5 Research scholarships and bursaries. As your child gets older, he or she will have a better idea as to the kind of post-secondary education he or she will want to pursue. Different schools and programs, as well as certain community organizations, offer scholarships and bursaries. Best of all, most scholarships are now received tax-free.

Roma Luciw is a writer and web editor of the personal finance site. Please send any comments and story ideas to

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