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New RESP initiative supports early investing in post-secondary education
A new provincial RESP initiative is encouraging families to invest early in their children’s post-secondary education.
As part of the B.C. Families Early Years Strategy, any B.C. resident with an RESP for a child born on or after January 1, 2007, may apply for a one-time grant of $1,200 between the child’s sixth and seventh birthday.
Don McRae, the B.C. Minister of Education, paid a visit to the East Kootenay Community Credit Union branch in Fernie this afternoon to fill local parents in on how the program works.
“There’s a whole bunch of opportunities here,” he remarked. “Parents can contribute, the B.C. government contributes, and when our sons and daughters turn 18, they have not only the opportunity to go to university, post-secondary, trade school, whatever, they also have the opportunity to have money ready. And as a parent, I just want one thing for my children - I want opportunity.”
McRae went on to explain that the federal government will also match 20 per cent of the savings, up to $400 each year.
The initiative is called the B.C. Training and Education Savings Program, and is a modified version of the Children’s Education Fund (CEF), a program created in 2007. The CEF had set aside $1,000 for each child born on or after Jan. 1, 2007. That money, as well as the earnings accrued, would have been paid out once the child enrolled in a post-secondary institution in B.C.
McRae said the hope is that the new program will prompt more parents to take advantage of RESPs.
“One of the things that saddened me is that only 52 per cent of families actually sign up for an RESP,” he remarked. “There’s lots of reasons why, but we know 100 per cent of parents should. It costs them nothing and it’s an opportunity for the $1,200 from the government to go right into that child’s account, and that starts the base of savings.”
Kootenay East MLA and Minister of Community, Sport and Cultural Development Bill Bennett was in attendance and added, “Fernie and Elkford and Sparwood have lots of young families nowadays. Just with interest on the $1,200 it’s going to be a nice way to start their first year of whatever sort of training they decide to take up.”
Bennett introduced Jikke Gyorki, an expecting Fernie mother who has already set up an RESP for her three-year-old son and plans to set up another for her second child.
“I had to pay my own way through school and so if I can alleviate some of that burden from my kids when they get into wanting to go to university or college, I’m all the more for it,” shared Gyorki. “It is easy to set up, it’s simple, and you can contribute however much you want into the program, whether it’s $25, $50 a month, or as much as you want.
“It will be there collecting interest throughout, it’s non-taxable, and now with getting some extra funding from the provincial side of the government besides the federal side of the government, it’s a win-win for parents as far as I’m concerned.”
The approximately $286-million the CEF has accumulated since 2007 will be carried over to fund the new RESP program.