Educational Grants and Contributions from the Government of Canada
As costs keep going up and educational requirements for jobs become more demanding many parents are wondering how best to help their children pay for college and university. This worry starts as early as welcoming that first new baby into the home. And it’s also the best time to begin saving and planning for the financial costs involved. The second best time to start is NOW, whether your child is in JK, Grade 8 or already in secondary school. Your bank or financial advisor can help you set up a variety of savings plans. MAJOR HINTS: Make sure the plan you choose accommodates the Canada Learning Bond and the Canada Education Savings Grant (read on for more information) and look for a plan that charges no fees. It can be hard in today’s economic climate to find those extra dollars to save. But, there is a source of $$$ available that does NOT come out of your family paycheque(s), meaning every family can put away at least some funds for future education and training costs.
The Government of Canada has programs in place to assist families in saving for post-secondary education and training. All you need to do to take advantage is obtain a social insurance number for your child and open a Registered Education Savings Plan (RESP) account. You’re thinking there has to be a catch right? Only one, the money MUST be used for college, university, apprenticeship or trade school; if not you will need to pay back the amounts the government contributed to your child’s RESP. However, an RESP can remain open for 36 years so your child has lots of time to make educational decisions. You will NOT lose the portion you have contributed to the RESP, so you have absolutely nothing to lose by taking advantage of these opportunities. These programs will not cover the entire cost of post-secondary education and training but every bit certainly helps.
The Canada Learning Bond:
$500.00 is available to all families who receive the National Child Benefit Supplement (NCBS). And the government will continue to deposit $100.00 per year into your child’s RESP every year your family qualifies for the NCBS until your child reaches the age of 15, or until the maximum government contribution of $2,000.00 is reached. The first Canada Learning Bond (CLB) payment can also include $25.00 toward set-up fees if you do not choose a no-fee RESP.
The Canada Education Savings Grant:
The basic Canada Education Savings Grant (CESG) is a program where the Government of Canada adds 20 cents for every $1.00 you contribute to a maximum of $500.00 (on your contributions of up to $2,500.00) to your child’s RESP annually. Not in a position to make contributions right now? You can “catch up” in future years, right up until the end of the year in which your child turns 17 provided you have met the minimum contribution amounts before your child turned 15. This program is available to all families regardless of income level, i.e. no maximum or minimum income levels to qualify for eligibility – you simply need to make a request for the grant provided your child is a Canadian resident and an RESP has been opened.
The Additional Canada Education Savings Grant:
The Additional Canada Education Savings Grant (A-CESG) tops up the CESG for low and middle income families by adding another 10-20% onto the first $500 contributed to the child’s RESP annually. Currently, assuming a $500.00 contribution on the part of the family, those whose net family income falls at or below $43,561.00 would receive an additional grant of $100.00 (20% of $500.00). A family net income of $87,123.00 would be eligible for an additional grant of $50.00 (10% of $500.00) according to the Government of Canada’s CanLearn website, link provided below.
There are a number of good sources for more detailed information on these programs, including links to help you find an RESP provider who accommodates the CLB, the CESG and the A-CESG. Spending a little bit of time perusing these sites and doing your research can really help when making plans to save for that education: