Education Savings Take Kids One Step Closer to their Dreams
November 17, 2015
"I grew up knowing that my parents were saving for my education in an RESP with Kaleido," says Vincent Laurion, now a shipping supervisor for a Quebec-based company, "this gift was priceless. I plan on having children of my own someday, and I too, will open an RESP with Kaleido to allow them the opportunity to pursue the career of their choice", concludes Vincent Laurion.
A Plan for the Future
The RESP is a very advantageous financial product given the generous grants offered to boost contributions.1 These grants, as well as the income generated by these and by the contributions constitute the amounts paid in the form of educational assistance payments (EAPs) to RESP beneficiaries pursuing eligible studies.
Most parents who invest in an RESP to offer their children the opportunity to pursue their dreams, as was the case for Léonie Pilote, and RESP beneficiary with Kaleido: "The EAPs I received gave me the means to pursue my studies at one of the best schools in the world and in a field I'm passionate about. This money eased the burden of financial stress and allowed me to focus on my education."
Educational Assistance Payments
EAPs, formerly known as scholarships, are funds from an RESP used to cover the various expenses of a post-secondary education. Contrary to a popular misconception, the money from an RESP isn't only for University studies. Quite the contrary, EAPs can be paid for a very wide range of educational programs, such as those offered in community colleges, private colleges, technical schools, vocational/trade schools, CEGEP, distance learning programs... and the list goes on.
EAPs can be used to cover just about any type of education-related expense, from tuition fees to groceries. These can even be used to ensure transportation to and from school: "The school I wanted to go to was outside my home town, so I used my educational assistance payments to buy a reliable car and cover gas expenses," explains Samuel Roberge, who is currently pursuing industrial mechanic training in Windsor, Ontario.
And so, this week is dedicated to encouraging Canadian families to invest in post-secondary education through RESPs. Early planning for a child's education is very important because holding and building savings over the long-term plays a role in strengthening his or her educational aspirations. It's also a critical factor in helping young people find a good job to become active participates in their community.
1. CESG: The Canada Education Savings Grant rate is 20% to 40% based on adjusted family net income. The maximum CESG limits are set by the federal government. The annual limit is set at $600 and the lifetime limit is set at $7,200 per beneficiary. CLB: The Canada Learning Bond is offered for children born after December 31, 2003, for whom families receive the National Child Benefit Supplement (NCBS). Certain conditions apply; for more information, please contact one of our authorized representatives or refer to the Prospectus.