Government grants boost child's education savings Iqaluit NU
Government grants boost child's education savings
(NC)-Saving early for your child's post-secondary education is more important than ever as tuition fees and related expenses continue to rise. According to Statistics Canada, university tuition fees have increased at an annual average rate of 4.3 per cent over the last decade.
Fortunately, families can access several government grants through a Registered Education Savings Plan (RESP), to help offset these rising costs and give their child a strong foundation for a bright future.
An RESP is an education savings plan registered under the Federal Income Tax Act that helps families save for post-secondary education. Income earned on contributions grows in a tax-shelter until a child is ready to attend college, university or trade school.
Government help includes the Canada Education Savings Grant (CESG), which adds 20 per cent of all contributions made to a maximum grant of $500 per year per child. Some families may also be eligible for an additional 10 or 20 per cent on the first $500 contributed each year, depending on their income.
Modest-income families can also benefit from the Canada Learning Bond (CLB), which provides a $500 bond for children who are born after 2003 and are eligible for the National Child Benefit (NCB) supplement - generally families with incomes under $35,000. These children will also qualify for annual $100 CLB installments until age 15 as long as their family is entitled to the NCB supplement.
"Even if families can't make regular contributions, the government grants earn interest through an RESP until their child starts college or university," said Peter Lewis, Vice President, Canadian Scholarship Trust Foundation. "Over the years we've seen that saving for a child's education, regardless of the amount, increases their likelihood of going on to higher education."
Provincially based education savings bonds and tax credits are also available to help boost education savings. Talk to your local RESP provider today to find out what options are available for your family.
More information on this topic is available online at www.educateyourchildren.ca or call toll-free 1-877-333-7377.