College-ready with RESP – Every parent of a teenager is aware of the cost of college. As we raise our children and supply them with the basic requirements to allow them to grow into well-balanced, healthy, and socially acceptable people, it becomes harder to save for their college funds.
Canadian citizens are offered several first-rate programs to allow parents to save for their children’s education. The savings programs are tax-free (with some exceptions.) Further, the government will deposit money into your accounts to help them grow. So, let’s take a look at the first easy tool that you should become acquainted with.
College-ready with RESP
RESP stands for Registered Education Savings Plan. Anyone can walk into a bank or credit union and open an RESP account in the name of a student. You can be their parents, grandparents, or even neighbors. The Canadian government deposits money into your child’s account up to a certain percentage. The amount of money they deposit depends upon the amount of money the family earns. The program they use is called the Canadian Education Savings Grant or CESG. It is important to note, there is an RESP calculator that will allow you to understand where you stand with the funding for education. However, there are many loans, grants, and bond programs that can be used. If you are living in the Ontario area, the RESP program is the same and the Student Grants Ontario is the same program.
There is a very large and impressive list of educational facilities that your student can choose from and use his RESP funds. These facilities also accept Canadian learning bonds, Canadian education savings grants, student loans, and bank loans. There are experts to help the student maximize the funding that is available. If they decide that college is not for them, they can use the appropriate funding and engage as an apprentice. If this does not work out, the funds can be transferred to the account of another student as long as the maximum has not already been reached. Even if the child is a grandchild, niece or nephew or a neighbor you care about, you can help someone reach their goals. However, if the student just wants some time off to think things out, they can wait to make a decision. They do not have to decide right away. The money can stay in the account for 36 years from the day it was opened. If the money is withdrawn from the account and not used for educational purposes, there is a 20% penalty, (plus any taxes owed.)
Where to begin
We have given you some solid and basic information about the college funding that is available to citizens of Canada. We have briefly explained that there is free money waiting for your children, and if your family is young, the government understands and will base the “help” on your income. But, there is so much more.
To give you all the information you need, this article would need to be a book. There are tax laws and rules. There are situations where the money saved for a college that is going untouched can be deposited into a family savings plan. There are penalties if you do not follow the rules. Therefore, you need to have a full grasp of what the rules are. If your college student has to work while going to school, how will that affect the money being drawn from the account? The bottom line is this. You need to educate yourself. CST Spark is an expert in this field. You can schedule a free consultation.
It is programs like these that have made Canada in the top 5 countries when it comes to extended education. The dedication and financial support Canada affords its citizens allows them the freedom to get the education the future they want. That is how we measure true success – college-ready with RESP .