College Versus Trade School: Which One Is Better For You from a Financial Perspective.

As students when we evaluate our post-secondary options, deciding between college and trade school may have important financial consequences.

Both paths offer distinct benefits, and understanding the associated costs and earning potential is crucial for making a well-informed decision about education and future careers. In this article, I will help you come closer to making a solid decision regarding your Post-Secondary education options!

Education Costs

The cost of education in Canada can vary greatly between University or College and trade school. A typical four-year college degree requires a significant financial investment. In 2023, Statistics Canada reported that domestic students at public universities paid an average of $6,834 annually for undergraduate tuition, with programs such as engineering or medicine being more expensive. Additional expenses like textbooks, housing, and fees further increase the overall cost.

In contrast, trade school is generally much more affordable. Programs for skilled trades like plumbing, electrical work, or welding typically range from $2,000 to $15,000, depending on the program’s duration and location. Trade programs are shorter—usually six months to two years—resulting in lower educational costs and less time spent in school.

Earning Potential and Job Security

Although College and University graduates typically enjoy higher earning potential, trade school graduates can also find high-paying jobs, particularly in sectors with strong demand. According to Canada’s Job Bank, university graduates generally earn more over the course of their careers, with those aged 25 to 34 making a median annual income of around $50,000 in 2021.

However, skilled trades offer attractive financial prospects and better job security in many cases, given the steady demand for skilled labor. For example, electricians, plumbers, and welders can earn competitive wages without needing a four-year degree. Job Bank Canada reports that electricians earn a median salary of about $68,000, while plumbers make approximately $63,000!

Job stability is another factor to consider. The skilled trades in Canada continue to experience strong demand, with many older workers retiring and opening up the doors for younger workers. This creates enhanced job security for trade school graduates, especially for those willing to move to regions with labor shortages.

Student Debt

One of the biggest financial challenges facing Canadian college graduates is student debt. The Canadian University Survey Consortium estimates that the average student graduates with roughly $28,000 in debt. Depending on the location and program, it can take years to pay off these loans, affecting graduates' ability to save, purchase homes, or invest.

On the other hand, trade school graduates generally have less debt because of the lower tuition costs and shorter program duration. Many trade school students are able to fund their education through savings, part-time jobs, or government grants, which reduces the need for loans. This allows trade school graduates to enter the workforce with little or no debt, giving them a financial advantage over many College and University graduates.

Entry into the Workforce

A major financial benefit of trade school is that graduates can enter the workforce more quickly. Since trade programs typically last between one and two years, students can begin earning and gaining experience much earlier than their peers in college programs, who usually take four or more years to complete their degrees.

Starting their careers sooner allows trade school graduates to begin saving and building financial stability at a younger age. Although they may initially earn less than college graduates, this early start can contribute to long-term financial growth.

Remember that when deciding between College or University and trade school, we must consider various financial factors. While college degrees tend to lead to higher lifetime earnings, trade schools provide a faster, more affordable route to stable, well-paying careers.

With lower debt and an earlier workforce entry, trade schools may appeal to students seeking to minimize financial risk. Ultimately, the decision depends on your individual career goals, financial circumstances, and future aspirations.

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