Deadline looms for RESP grants

(December 10, 2004) No matter how well-informed your clients may be, it never hurts to remind them of pending deadlines — especially in December. In a survey conducted for Heritage Education Funds, Decima found only 15% of parents realized the RESP contribution deadline is December 31.

Unlike the RRSP deadline, which allows for contributions within the first 60 days of the new year, RESP contributions must be made within the calendar year to qualify for the federal grant. Now may be the best time to remind clients with RESPs to make their contribution.

“With this year’s contribution deadline just weeks away, it’s critical that Canadians learn more about the Canada Education Savings Grant (CESG) program — which can help millions more parents save for their child’s post-secondary education,” said Kevin Connolly, president and CEO of Heritage Education Funds.

The survey found 63% of parents with children under the age of 17 knew about the CESG program, which offers federal grants of up to $400 for each eligible child per year, to a maximum of $7,200 per plan. But just 44% of survey respondents said they had opened an RESP for their child.

“While post-secondary education is anything but free, the federal government rewards those who use RESPs with free, tax-sheltered money,” says Connolly. “It’s a policy that’s good for parents, good for children and good for Canada.”

Some estimates place the cost of a university education at rising to over $100,000 by 2018.

“Since 1990, post-secondary education has risen at a rate of 8.1 per cent annually, and parents need to save now to offer their children the chance to pursue education beyond high school,” Connolly said. “RESPs give them the chance to do so without carrying huge debt loads.”

While an RESP contribution might not be on any child’s wish list, Heritage suggests it makes a great gift, which can be paired with a “symbolic present that underlines the importance of education,” such as a piggy bank, a trendy school bag or backpack, or the latest lunch box.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com