Household budgets will soon be feeling the effects of the annual back-to-school spending season, but there is some relief in sight for further education or training after the kids finish high school.
The B.C. Training and Education Savings Program (BCTESP), which became available on Aug. 14, will provide $1,200 to eligible children for post-secondary education or training programs.
Although the program was announced earlier in the year, the application process is now open for B.C. parents with children between the ages of six and nine.
“Even if your children are just beginning their school life, you need to start planning on how to finance their post-secondary education or training aspirations,” said Rob Oleksyn, an investment expert with First West Credit Union’s Valley First division. “The BCTESP is just one several grants available that will really help jumpstart education savings.”
In addition to $1,200 from the BCTESP, the Canada Education Savings Grant (CESG) will match 20 per cent of yearly contributions up to a maximum of $2,500. Eligible children could receive as much as $7,200 in CESG by the time they graduate high school. The Canada Learning Bond is another program which provides eligible children with $500 for their RESP right away with an additional $100 each year until the age of 15.
“There are a several options when setting up an RESP and a variety of grants available so talking things through with an expert will ensure that you get the right plan for your situation and don’t miss out on any available government funds,” said Oleksyn.
Anyone applying for the BCTESP, CESG or Canada Learning Bond will first need to set up a registered education savings plan (RESP) naming their child as the beneficiary. Both spouses may contribute to the RESP, but unlike an RRSP, contributions are not tax deductible.
In addition, any government grants or growth from investment of RESP funds is deemed to be income when withdrawn by the beneficiary. Although these sources are taxable, students are typically in low tax brackets when withdrawing the funds.