The cost of post-secondary education (PSE) can seem daunting to many families. And with the cost of education continuing to rise each year, families are looking for ways to make the expense more manageable. Global RESP Corporation offers its clients a choice of two scholarship plans that provide more innovative planning and fee options:
In addition to the Registered Education Savings Plan (RESP), which can help you save up to $50,000 per child for their post-secondary education, a great way to help defer some of the costs is through government grants and bursaries. Here’s a look at some of the options available to students:
When you open an RESP, the recipient automatically becomes eligible for government grants that get added to your contributions, helping the plan grow. These government grants can increase your RESP investment by over 30%. Another benefit of the government grants is that they grow on a tax-deferred basis until they are withdrawn to help pay for the child’s post-secondary education.
Regardless of family income, the Canadian Education Savings Grant (CESG) is available to everyone with an RESP. Through the CESG, the Canadian government will match 20% of all RESP contributions, which is up to $500.00 annually and a lifetime maximum of $7,200. Through the Additional CESG, the Canadian government provides further grant money for those who come from low-income and middle-income families. This grant money is in addition to any money they receive through the basic CESG.
In addition to CESG money from the Canadian government, when you open an RESP the beneficiary may also qualify for provincial grants depending on where you live.
For example, through the Quebec Education Savings Incentive (QESI), annual RESP contributions of up to $2,500 are eligible for a tax credit of 10% for a maximum of $250.00. Low-income families are eligible for a 5% to 10% increase ($25.00 to $50.00) on the first $500.00 contributed annually to the RESP. The lifetime maximum you can qualify for through the QESI is $3,600.
If you live in British Columbia, you can take advantage of the British Columbia Training and Education Savings Grant (BCTESG). The B.C. government will contribute a one-time grant of $1,200 to eligible children.
Through the Saskatchewan Advantage Grant for Education Savings (SAGES), the Saskatchewan government matches up to 10% of annual RESP contributions, up to a maximum of $250.00 per year to a maximum contribution of $4,500.
The Canada Learning Bond (CLB) is $500.00 offered by the Government of Canada designed to help your child start savings for their post-secondary education. The money is deposited directly into the child’s RESP account.
On top of that, the recipient could get an additional $100.00 annually until they turn 15. That means your child could receive a maximum of $2,000 through the Canada Learning Bond program.
To be eligible for the CLB, the child’s family must receive the National Child Benefit Supplement. Plus, the child must have been born after December 31, 2013, have a birth certificate and Social Security Number, have an RESP in their name, and must reside in Canada.
The Canada Child Benefit (CCB) is a tax-free benefit made to eligible families to help them with the cost of raising children under the age of 18. The CBB is calculated based on the family’s net income and age of the child.
Based on an annual net income of $30,000 or less, a family will receive the maximum amount of $533.00 per month or $6,400 annually if they have a child under the age of six. If they have children between the ages of 6 and 17, they are eligible to receive up to around $450.00 per month or $5,400 per year.
If your family has a net income of $60,000 and a child under the age of six, you are eligible to receive approximately $358.00 per month ($4,300 annually) as part of the CBB. If the child is between 6 and 17, they are eligible to receive up to $275.00 per month, or $3,300 annually. Putting this extra money toward a RESP is an excellent way to take advantage of government grants and boost your RESP savings.
If you’re interested in opening an RESP account and learning more about Canadian Scholarship Plans, contact an experienced Dealing Representative at Global RESP Corporation (GRESP) today. In addition to providing flexibility and a wide range of investment opportunities, GRESP also has one of the lowest administrative fees in the market and no minimum plan contributions.
To learn more about opening an RESP and about scholarship, grant and bursary options, talk to a Global RESP Corporation sales representative in your area. Or fill out a form and a Global RESP Corporation sales representative will contact you.
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