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Accessing Postsecondary Education for All Families

Accessing Postsecondary Education for All Families

May 5, 2020

As technology rapidly changes, young people hoping to enter the workforce over the next two decades will likely need to develop skills gained through higher education. At the same time, children born in 2020 can expect to pay up to $70,000 overall for a four-year university program. Education can be a great equalizer, but for many modest-income families, prioritizing saving for education can be a challenge. There are some initiatives available that can help you get started today, to motivate your child to continue their education after high school.  
Canada Learning Bond
Eligible families with children born in 2004 or after can apply for the Canada Learning Bond (CLB), which is a program created by the government of Canada to help low-income families save for their children’s education. The government deposits an initial $500 into an RESP in the first year and then adds $100 per year, up to $2,000 per child. Personal contributions are not required to receive CLB and, once you have applied, CLB will be deposited into your RESP automatically for every year you qualified.
Canada Education Savings Grant
Families who can afford to add additional funds into their children’s RESPs can also take advantage of the Canada Education Savings Grant (CESG). The CESG matches 20% of the first $2,500 contributed to an RESP, to a maximum of up to $500 per year per child. Depending on your family net income, the Additional CESG can add another 10-20% to your child’s RESP.
Quebec residents can also receive the Quebec Education Savings Incentive. This refundable tax credit program provides 10% on the first $2,500 contributed to an RESP. Like the CESG, families can quality to receive an extra 5-10%.
Children in British Columbia are also eligible to receive $1,200 between the ages of six and nine. Like the CLB, no RESP contributions are required to receive this provincial incentive.
Canada Child Benefit
 Many families choose to use a portion of other government programs, such as the Canada Child Benefit, towards their education savings. Thanks to government grants and tax-differed growth, even small RESP contributions will make a big difference to your child.
RESPs are ideal savings tools because any interest earned in these types of savings remains tax-free until the funds are accessed by a student to cover their post-secondary education costs. Since students tend to have lower incomes when they’re attending college or university, taxes are likely to be minimal (if any) on the interest portion of withdrawn funds.
Federal Grants and Bursaries
Once students are ready to head to post-secondary school, there are grants and bursaries available that can help lower-income families pay tuition costs and other fees. The Canadian government offers various grants and loans for which students are automatically assessed when they apply for student aid in their province. Depending on their family’s income, students may receive grants of up to $3,000 per year from the federal government.
Provincial Grants
Provincial governments also offer other grants that top up the federal offering. For example, British Columbia’s government recently announced its BC Access Grant that will give British Columbia students up to $4,000 per year to help cover the costs of their education. Students enrolling in a full-time, four-year university program could receive up to $3,000 in federal grants that are plus up to an additional $1,000 per year through the Access Grant.
Post-secondary education is more important than ever before for young people who want to be competitive in the workforce of the future. By accessing incentives like the CLB, and CESG through an RESP when possible, parents can give their children a head start when the time comes for them to head to college or university. These, along with the provincial and federal grants, can make higher education more affordable while providing further opportunities to students from lower-income families to pursue their dreams.
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